You would at least think twice before putting money into the firm, and you would probably maintain some level of oversight or control over that investment once it was made. There's good reason why many corporations and foundations demand to know what percentage of directors on a given board contribute to a charity before making a grant. Board members managing their own contributions in addition to those of the public will often be more deliberate in their financial and planning decisions. The internal standards for accountability are often higher when board members' own money is at stake. A recent survey of 100 nonprofits was conducted for the Community Foundation of Riverside County, California.
Donors are often surprised if they even ask to find out how few directors contribute at all.
The size of the contribution is almost irrelevant. A financial contribution is a tangible sign of a director's faith in the organization, its mission, its leadership and its direction. Before making your philanthropic investment, inquire about the board's donation track record. Then decide if you would trust them to manage your money. Renata J. Rafferty is a charitable giving consultant and author.