Giving More Than Money. 2015 Wells Fargo/BoardSource study of nonprofit board leadership. Wells Fargo Philanthropic Services endeavors to help nonprofit boards and board members gain the most from board member engagement. To this end, Wells Fargo collaborated with BoardSource, a renowned organization supporting nonprofit governance and board leadership, to conduct an in-depth research study among nonprofit board members. The goal of the research was to better understand nonprofit board members overall board experience, including their motivation for joining a nonprofit board, the benefits they derive from that membership, and their satisfaction with their board service. In this white paper 1 Executive summary. 2 Key findings. 2 Reasons for board involvement. 3 Contributions to boards. 4 Attitudes toward board service. 5 Board diversity. 6 Board orientation programs. 7 Gender differences. 8 Board member profile. 9 Background and methodology.
Giving More Than Money. 2015 Wells Fargo/BoardSource study of nonprofit board leadership. Executive summary. Most board members join a board for altruistic reasons. They are committed to the organization and its cause and have a sincere desire to give back and make a difference. In ranking their contributions to the organization in terms of time, talent and financial support, board members rank their talent or skills most highly, followed by time, then money. Overall, board members are satisfied with their board service. They are highly engaged and would recommend serving on the board to others. Board members who are very satisfied are, not surprisingly, most valuable to the nonprofit organization they serve. They contribute more fully to the organization and are more likely to communicate the mission of the organization, build consensus, recruit new members, donate money and provide leadership. An obvious implication for nonprofit organizations is that it s important to find ways to make sure that their board members are very satisfied. An important determinant of board member satisfaction is the onboarding process. Nearly half of board members felt their nonprofit did not have a strong orientation process. As a result, many did not fully understand what was expected of them with respect to understanding the organization s mission, their responsibilities and financial commitment. Because highly satisfied board members tend to contribute more overall to the organization, it s important for nonprofits to make sure they have a strong orientation program. Board members place a high value on board membership diversity, but most are not satisfied with the current level of diversity on their boards. This belief is consistent with the actual composition of the boards they serve on where nearly eight-in-ten are white. Men and women are more alike than different in their board service. The top reason both choose to join a board is they are interested in the organization s cause. Also, both men and women tend to serve on boards where their respective gender represents the majority. Women, however, are slightly more likely to join boards for social, professional development or networking reasons. Women are also more likely to value diversity among board members and are less satisfied with the diversity of their board than men. Board member satisfaction Because highly satisfied board members tend to contribute more overall to the organization, it s important for nonprofits to make sure they have a strong orientation program. Base for all charts: total respondents=1,472. Giving More Than Money 1
Key findings. Reasons for board involvement. While many reasons were given for joining a nonprofit board, the most frequently mentioned reasons included the belief that their skills would be helpful to the organization (92 percent), interest in the cause (87 percent), the desire to make a difference (81 percent), and personal commitment to the mission of the organization (79 percent) (Chart 1). When asked to name the most important reason why they serve on a board, a deep personal commitment to the mission of the organization was overwhelmingly the top answer (40 percent) followed by an interest in the cause of the organization (15 percent) (Chart 2). 92 % I believed my skills could be helpful. Most frequent reason for joining the board Chart 1. Reasons for Joining Board (Aided) I believed my skills could be helpful I was interested in the cause of the organization I wanted to make a difference I have a deep personal commitment to the mission of the organization Being on this board allows me to give back I got involved because someone I know asked me to do something Being on this board supports my professional development I donated money Membership on this board is a good credential for me I wanted to expand my business network I wanted to expand my social network I had time and was looking for something to do The company I work for encouraged my participation Other 92 % 87 % 81 % 79 % 79 % 46 % 39 % 29 % 28 % 19 % 15 % 15 % 13 % 5 % 40 % I have a deep personal commitment to the mission of the organization. Most important reason for joining the board Chart 2. The Most Important Reason for Joining Board (Aided) I have a deep personal commitment to the mission of the organization I was interested in the cause of the organization I believed my skills could be helpful I wanted to make a difference I got involved because someone asked me to do something Being on this board allows me to give back Being on this board supports my professional development The company I work for encouraged my participation Membership on this board is a good credential for me Other 40 % 15 % 13 % 9 % 8 % 8 % 3 % 1 % 1 % 1 % Generally, board members tend to have a connection to the nonprofit prior to joining the board. Nearly three-quarters (72 percent) were involved with the organization in some capacity before becoming a board member. Only a quarter (28 percent) had no prior involvement with the organization before becoming a board member. 2 Giving More Than Money
Contributions to boards. Consistent with their reasons for joining a board, board members say their most important contribution is their skills. When board members were asked to rank what they contribute to the nonprofits they support in terms of time, talent, and financial support, they rank their skills or talent as nearly half (47 percent) of their contribution, followed by time then money (Chart 3). When evaluating their contributions to the boards they serve on, board members feel they provide leadership (78 percent) and strategy (74 percent) to the nonprofits. Additionally, they say they are key to getting things done (65 percent) (Chart 4). Chart 4. Contributions to Board Providing leadership Developing strategy Getting things done Attending meetings and events Working on committees Communicating the mission Donating money Building consensus Using my network to help the organization Raising money Recruiting new board members Recruiting new members Other On average, board members spend approximately 15 hours per month on board-related activities, including attending and preparing for board meetings, committee work, communicating with staff, and fundraising. 78 % 74 % 65 % 65 % 60 % 58 % 40 % 39 % 37 % 33 % 33 % 23 % 7 % Chart 3. Allocation Across Talent, Time, and Financial Time 35 % Board members donated a median of $1,000 to their organizations and $4,000 to nonprofits overall in 2014. Financial 18 % Time Philanthropic activities that require time but no unusual skill set Talent 47 % Talent What you add to the organization because of your unique skill set or expertise Financial The money you contribute to the organization Implications. In recruiting board members, nonprofit boards can identify candidates who provide skills the board needs and who will feel they are making a valuable contribution with their skills and experience. Giving More Than Money 3
Attitudes toward board service. Overall, board members are satisfied, highly engaged, and very likely to recommend serving on the organization s board to others. Not surprisingly, board member satisfaction is correlated with successful board member engagement. Board members who are fully satisfied (defined as those who said they were very satisfied as board members) are highly engaged (90 percent) and very likely (86 percent) to recommend becoming a board member to others. Additionally, those who described themselves as fully satisfied contribute more in key ways, including communicating the mission, building consensus, recruiting new members, donating money, and providing leadership, compared to those who are not fully satisfied (Chart 5). Chart 5. Contributions to Board: Fully Satisfied vs. Not Fully Satisfied Gap Fully satisfied members = 748 Not fully satisfied members = 724 Û Arrows signify statistically significant differences at the 95% confidence level. Communicating the mission Building consensus Recruiting new organization members Recruiting new board members Donating money Providing leadership Getting things done Using my network to help the organization Raising money Developing strategy Working on committees Attending meetings and events Û66 % 49 % +17 Û45 % 33 % +12 Û29 % 17 % +12 Û39 % 28 % +11 Û46 % 35 % +11 Û83 % 73 % +10 Û69 % 60 % +9 Û42 % 33 % +9 Û37 % 28 % +9 Û79 % 70 % +9 Û63 % 57 % +6 67 % 64 % +3 As an additional measure of board satisfaction, six in ten board members either don t plan to leave their boards or will do so only because their term has ended. Board members have served on their current board for an average of 3.9 years and plan on serving an additional 2.9 years. Implications. Having fully satisfied board members has a number of significant positive implications for nonprofit organizations. Those nonprofit organizations that are successful in attracting and retaining fully satisfied board members are likely to find them highly engaged, willing to act as ambassadors for the mission, making larger financial contributions, building consensus, and recruiting new board members. 4 Giving More Than Money
Board diversity. Having a diverse board is ranked as highly important by board members (Chart 6). However, their level of satisfaction with the current level of diversity suggests there s room for improvement. Chart 6. Board Diversity It is very important to have a diverse board Strongly agree Somewhat agree Neither agree nor disagree Disagree 63% 30% 5% 2% Satisfaction with board s diversity 17% 37% 19% 27% Very satisfied Somewhat satisfied Neither satisfied nor dissatisfied Dissatisfied 79 % Average percent of white members comprising their board According to surveyed board members The data shows a disconnect between desired board diversity and actual board composition. Surveyed board members indicated that the boards on which they serve are not very diverse, on average comprised of 79 percent white members. Implications. Nonprofit organizations have an opportunity to increase board member satisfaction by making an effort to pay attention to and increase board member diversity. Giving More Than Money 5
Board orientation programs. Chart 7. Assessment of Board Orientation Program Disagree that board has strong orientation program Agree that board has strong orientation program Nearly half of board members surveyed think that their board does not have a strong orientation program (Chart 7). Board orientation is very important because many board members often do not understand what is expected of them when joining a board. This is especially true with respect to financial support. Only half (52 percent) fully understood the financial commitment expected of board members (Chart 8). Chart 8. Understanding When Joining Board The organization s mission 75% 22% 2% 1% 46 % 36 % Your board duties and responsibilities 53% 39% 7% 1% 18 % The financial commitment expected of board members 52% 27% 11% 10% Neutral Understood completely Understood a little Did not understand at all Not sure/not applicable Implications. Because having fully satisfied board members is highly correlated with their level of commitment and financial support of the organization, it is important that board members understand what is expected of them. This is especially important with regards to fundraising where many nonprofits rely on board members to support staff in their fundraising efforts. Nonprofits should consider reviewing their orientation and onboarding process, and seek feedback from current board members to improve the process, if necessary. 6 Giving More Than Money
Gender differences. While both men and women overwhelmingly join boards as a way to support the cause of the organization, women are slightly more likely to also include social, professional development or networking reasons for joining (Chart 9). Chart 9. Reasons for Joining Board I was interested in the cause of the organization Being on this board supports my professional development Membership on this board is a good credential for me I wanted to expand my social network Û90 % 85 % 35 % Û42 % 24 % Û29 % 12 % Û16 % Men Women Both men and women tend to serve on boards where their respective gender represents the majority (i.e., women tend to serve on boards where women are the majority and men tend to do the same). Women are more likely to value diversity among board members and are less satisfied with the diversity of their board than men (Chart 10). Men serve on boards with larger operating budgets (median of $1.1 million vs. $600,000 for women) Chart 10. Board Diversity Percent who strongly agree It is very important to have a diverse board 57 % Û66 % Percent very or somewhat satisfied with The board s diversity Û58 % 51 % Men Women Implications. Nonprofits can work with board members networks, particularly those of women who are interested in increasing diversity on the board, to find more diverse candidates for new member openings. Giving More Than Money 7
Board member profile. Board members are predominately white, married, in their late fifties and serve on two boards (Chart 11). Chart 11. Board Member Profile Men Women Total Median # of years served on nonprofit boards 15 13 14 Median # of boards served on 2 2 2 Average age 59 55 57 Ethnicity White/Caucasian 86 % 86 % 86 % Other 12 % 12 % 12 % Education College graduate or less 35 % 38 % 37 % Post graduate 65 % 62 % 63 % Marital Status Married/living with partner 89 % 74 % 79 % Not married/not living with partner 10 % 23 % 19 % Have children 81 % 71 % 74 % Median household income $123,600 $112,900 $116,000 Note: Some sections may not add to 100 percent because some respondents chose not to answer. 8 Giving More Than Money
Background and methodology. About the survey. On behalf of Wells Fargo Wealth Management s Philanthropic Services group, BoardSource emailed invitations to 100,000 nonprofit leaders. The survey itself was a 15 minute online survey conducted by Koski Research, an independent research firm. A total of 1,472 nonprofit board members completed the survey between November 7 25, 2014. Wells Fargo & Company (Twitter@ WellsFargo). Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 266,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune s 2015 rankings of America s largest corporations. Wells Fargo s vision is to satisfy all our customers financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories. (3/31/2015) Wells Fargo Private Bank. Wells Fargo Private Bank, the fourth largest wealth management provider in the United States (Barron s 2014), offers a full range of financial services and products to help individuals and families build, manage, preserve and transfer their wealth. The Private Bank services clients across North America and internationally with more than $205 billion in assets under management. (3/31/2015) Wells Fargo Philanthropic Services. With over $20 billion in assets under management, Wells Fargo Philanthropic Services helps enable organizations to grow and manage entrusted resources by providing a thorough understanding of the needs, objectives, organizational characteristics and regulatory requirements of charitable institutions and their donors. The Philanthropic Services mission is to serve nonprofit organizations through an integrated offering of investment management, fiduciary administration, governance advice, compliance, tax and reporting services. (3/31/2015) BoardSource. BoardSource is a renowned organization supporting nonprofit governance and board leadership and serves as the national voice for inspired and effective board service. It provides leadership and support to a growing network of more than 100,000 nonprofit leaders, and offers an extensive range of tools and resources to increase board effectiveness and strengthen organizational impact. Koski Research. Koski Research excels in creating customized research solutions that answer their clients most complex business questions. Answers to these questions spark customer engagement, result in national media coverage and drive business growth. Koski Research s clients include Fortune 1000 companies. Results from research for their clients have been published in the largest media outlets in the world. Giving More Than Money 9
Disclosures. Wells Fargo Wealth Management provides products and services through Wells Fargo Bank, N.A. and its various affiliates and subsidiaries. This information is for educational and illustrative purposes only and should not be used or construed as financial advice, an offer to sell, a solicitation, an offer to buy, or a recommendation for any security. The information and opinions in this report were prepared by Wells Fargo Wealth Management. Information and opinions have been obtained or derived from sources we consider reliable, but we cannot guarantee their accuracy or completeness. Opinions represent Wells Fargo Wealth Management s opinion as of the date of this report and are for general information purposes only. Wells Fargo Wealth Management does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report. Wells Fargo and its affiliates do not provide legal advice. Please consult your legal and tax advisors to determine how this information may apply to your own situation. 2015 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. NMLSR ID 399801 TPB01806 (201504068 06/15)