In these tough economic times, many non-profit organizations face the same challenge: an increasing demand for their services, with decreasing availability of funds. Non-profit organizations are poised to tackle some of the world’s more important challenges, but it will take even more money to help them grow and accomplish their missions. That’s why fundraising, an always important operation, is perhaps more critical now than ever before.

In a recent conversation, it became clear that many non-profits underestimate the importance of board governance in their fundraising operations. The relationship between board governance and fundraising goes two ways: board oversight and participation in fundraising, and acknowledging the strength of a board’s governance practices when seeking funds.

Board members in non-profit organizations have an obligation to get involved in fundraising activities to ensure the financial health and long-term viability of the organization. From making calls and arranging meetings, to setting up events and volunteering, their efforts and participation are vital. At the same time, the board of directors has an obligation to closely monitor and oversee fundraising operations to ensure that the organization is compliant and appropriate in its actions. A committee structure is often a very effective way for certain board members to become very familiar with all fundraising activities, while offering insight and guidance for improved success. The committee members can provide excellent suggestions that help diversify and enhance the development efforts of the organization. This is a responsibility that board members should not and cannot take lightly – it is vital to the long-term viability of the organization.

Additionally, development professionals need to appreciate and recognize good board governance as they seek to raise money. As demand for funds increases while availability of those funds decreases, funders are putting more and more pressure on organizations to demonstrate their competitive advantages. Non-profits should take this opportunity to acknowledge and tout the good governance, ethics, and accountability policies and procedures they have in place. A potential donor would likely be more inclined to fund an organization that can demonstrate strong board governance over an organization that has lax or nonexistent practices.

So, as non-profits go forth to solve some of the world’s most critical challenges, they have an opportunity to maximize the strength of the board of directors through good policies and procedures. Then, they can take advantage of the wealth of resources that the board can bring to the table, and tout the fact that they have a board with the policies and procedures necessary to ensure fiscal health and responsibility. That’s one powerful competitive advantage.