Skip to navigation

Email walt@lehmannplc.com, or call (651) 789-0550

Legal protection for creative professionals, cultural institutions, and non-profits

Fundraising through friend groups

“I have no trouble with my enemies. I can take care of my enemies in a fight. But my friends, my goddamned friends, they’re the ones who keep me walking the floor at night!” - Woodrow Wilson.

Here we will consider the use of affiliated entities — commonly referred to as: friends groups, associations, foundations or advisory councils — to provide financial support to non-profit and governmental organizations.

Many non-profit and governmental organizations have relationships with tax-exempt organizations whose principal or, in some cases, sole purpose (either directly or indirectly) is to provide financial support to the principal organization. While these groups can be a vital fundraising resource for the principal organization, in practice their effectiveness is often quite limited.

The relationship between friends groups and the organizations with which they are affiliated is fraught with potential problems which, if not properly managed, can be counterproductive and, in extreme cases, can even be harmful to the principal organization. To be effective, friends groups must be structured and managed in a way that allows them to establish and maintain effective partnerships with the principal organization.

What are friends for?

Friends groups are a familiar part of many non-profit organizations. Friends groups have a long tradition as part of certain educational and cultural institutions, including private colleges and universities, and museums. Harvard University, for example, has established friend groups for each of its intercollegiate sports teams. The groups provide funding for travel, recruiting, and other specific needs of their affiliated team.

Increasingly, friends groups are also encountered in connection with governmental and quasi-governmental organizations, including public universities, state historical organizations, park and recreational management agencies, and libraries. Friends groups typically provide financial and, in some cases, programmatic support (usually in the form of volunteers and in connection with special events) to a single principal organization or its subsidiaries.

Why non-profits build friends groups

While both non-profit and governmental organizations are increasingly relying on friends groups for financial support, the motivation for entering into these relationships is quite different. Private non-profit organizations typically use friends groups as one method of enhancing the organization’s ongoing development efforts. By creating opportunities for greater participation and broader support from constituent groups, friends groups can be an effective way to create opportunities for fundraising and for the cultivation of major donors.

For this reason, friends groups in private non-profit organizations often have a specific programmatic focus. For example, a museum friends group may,

  • host special donor recognition events,
  • raise money for specific purposes such as purchasing items for the collection,
  • subsidize a newsletter,
  • organize exhibit previews,
  • provide volunteers for certain events and programs,
  • or administer a museum shop.

This support is provided in exchange for a range of benefits — invitations to social events, private previews of exhibitions, concessions, publication, and other special events and activities. In some cases, membership in a friends group is a perk derived from a certain level of giving to the non-profit organization. The Metropolitan Museum of Art, for example, does both — it offers membership at a friends level, and also maintains a friends group which organizes lectures and other programs.

Why other organizations build friends groups

In contrast to non-profit friends groups, the use of friends groups by governmental and quasi-governmental organizations is primarily structural. For these organizations, friends groups provide a mechanism for overcoming some of the limitations faced by governmental and quasi-governmental organizations. Faced with declining state and federal support, governmental and quasi-governmental organizations in particular have been forced to look to non-traditional sources of support.

In “The Institutionally Related Foundation” Royster C. Hedgepeth explains that public universities originally began establishing affiliated non-profit organizations for a variety of practical reasons, such as being able to take advantage of marketplace opportunities without having to wait on the state appropriations process, and to preserve the separation between state treasuries and private gifts. For these organizations, using friends groups was a way to avoid bureaucratic procedures and governmentally imposed restrictions.

According to Hedgepeth, the roles of friends groups in governmental and quasi-governmental organizations have changed dramatically. “In many cases, the institutionally related foundation has become analogous to the private university’s development office.” While there is no prohibition against making charitable donations to public institutions, friends groups allow publicly supported organizations two principal advantages. They allow public institutions to:

  1. segregate funds which would otherwise end up in general treasury accounts, and
  2. apply for grants and take advantage of other opportunities offered only to charitable organizations.

Today many governmental and quasi-governmental organizations have established friends groups. Most public colleges and universities have friends groups. Most state-run historical organizations have instituted friends groups. Some of these groups support state historical functions on a statewide level, while others help to facilitate support for particular state-owned museums and historical sites. The Friends of Libraries U.S.A. provides resources for establishing public library friends groups. The Library of Congress alone has seven friends groups, each aligned with a separate division.

A growing number of federal and state parks and recreation organizations have also instituted programs to encourage the development of friends groups. The U.S. Fish and Wildlife Service has established a program which encourages the creation of friends groups. The USFWS describes a “Refuge Support (Friends) Group” as “a grassroots organization formed by citizens who have a shared vision to support their local National Wildlife Refuge or other Service facility.” These groups are diverse, with each focusing on the needs of their local refuge or other Service site. According to the USFWS, these groups “join with Service personnel in a partnership that seeks to accomplish mutually defined goals.”

The National Park Service has established a similar program. According to the NPS website, “during the past 20 years more than 100 Park Friends Groups have been created to assist parks in supporting needed park programs and projects that have been beyond the reach of appropriated dollars.” NPS Park Friends Groups support a wide range of park activities through fundraising, membership programs, “friend raising,” and advocacy. The NPS website contains information on setting up a friends group, as well as information on maintaining effective relationships between NPS parks and friends groups.

When there's trouble with friends

Whether established as an extension of a non-profit organization’s fundraising and development efforts, or by a governmental or quasi-governmental organization as an externalized development office, managing friends groups presents a unique set of management challenges. These challenges may be the greatest in the governmental and quasi-governmental organization, where friends groups represent a conflict between non-profit and governmental cultures and where concerns about bureaucratic control are most prevalent.

The relationship between primary organizations and associated friends groups is often contentious. The problems encountered by organizations with their friends groups fall into two main categories:

  1. those which involve organizational structure, and
  2. those which involve personal relationships.

The role that a given friends group plays vis-à-vis the principal organization and the effectiveness of that role has a lot to do with the organizational structure of the two entities and how they interrelate. Often this structure is the result of historical accident. In governmental and quasi-governmental organizations in particular, the organizational structure may reflect the history of the organization and the way in which the friends groups are expected to meet the financial needs of the principal organization. In some cases, this organizational structure and the relationships it creates may actually make it more difficult or even impossible for the friends group to function as an effective development arm for the principal organization.

Hedgepeth has identified three elements which need to be examined to understand the structural relationship of a friends group to its principal organization:

  1. the range of development-related functions for which the friends group is responsible;
  2. the scope of the friends group’s service within the organization; and
  3. the degree of integration in the priorities of the friends group and the principal organization.

The range represents the degree of autonomy of the friends group — ranging from extreme control to complete independence. Friends groups which operate with a high degree of oversight from their principal organization may be more integrated into the principal organization’s development process, but this integration comes at the cost of autonomy. At this extreme, the friends group may function simply as a repository for an organization’s funds, with no active role in generating those funds. While this may seem satisfactory to the principal organization, it can seriously limit the friends group’s effectiveness. A high degree of oversight and control can affect the friends group’s ability to attract quality board members, prevent friends board members from exercising their fiduciary duties to the friends group, and even jeopardize the friends group’s tax-exempt status. On the other hand, a high degree of independence may result in the friends group pursuing a mission unrelated to that of the principal organization. Too much independence can result in animosity, distrust and a lack of communication between the friends group and the principal organization. At either extreme in the range, the relationship between principal organizations and their friends groups risks becoming dysfunctional.

The scope of the friends group has to do with its relationship within the larger organization. In some organizations, the friends group serves the entire organization, while in other cases the friends group may only serve a component part of the organization. Friends groups which serve the entire organization can achieve economies of scale but may lack the ability to understand and respond to the specific needs of particular departments within the organization. In organizations with multiple friends groups, there may be a danger of provincialism — individual friends groups may compete for resources and work at cross-purposes. Where an organization has multiple friends groups, balancing the interests and needs of component parts of the organization with the greater needs of the organization as a whole can be difficult.

Integration involves the degree to which the missions of the principal organization and the friends group are aligned. Friends groups with a high degree of autonomy risk becoming disconnected from the principal organization’s mission and programming. However, a high degree of control by the principal organization over the operations of the friends group does not necessarily mean that the missions of the two organizations are integrated. Integration requires a mutually shared strategic vision. Friends groups that are well integrated are more successful at pursuing the principal organization’s development agenda. The effectiveness of a friends group in providing financial support to a principal organization depends upon balancing autonomy and control, coordination of efforts, and a clear understanding of and support for the principal organization’s mission.

Organizational structure is at the heart of most difficulties with friends groups. The biggest problems often arise from the isolation of the development function assigned to the friends group from the principal organization’s programmatic and administrative role. Friends groups are often expected to exercise development functions while being routinely excluded from involvement in programming and organizational management. As a result, they are often unable to fulfill their development function and to exercise the level of stewardship that Hank Rosso has indicated is essential to effective fundraising. Friends groups are also sometimes inappropriately used as ways to “off-load” the principal organization’s systemic problems. In some situations, the isolation of the development function in friends groups is the result of the principal organization’s board’s unwillingness to face their own fundraising obligations. Even in benign situations, the presence of a friends group may reduce incentives for a principal organization’s board to actively engage in fundraising themselves.

Maintaining positive personal relationships is central to the success of friends groups. The importance of both internal and external relationships cannot be understated. Friends groups are usually volunteer organizations while the principal organization is likely managed by professional staff. Particularly in governmental and quasi-governmental organizations, the cultural differences between the people who make up the principal organization and the friends group can be substantial. Paid staff must understand and appreciate the motivations of volunteers. A lack of appreciation for nonprofit board fiduciary obligations and the motivations of volunteer board members can damage the relationship between friends groups and their principal organizations.

Friends groups are often representatives of the community in which the principal organization works. The members of friends groups often have special relationships in the philanthropic community. While these relationships can be valuable to the principal organization, care must be taken not to place excessive demands on those relationships or the principal organization will risk damaging its relationship with the members of friends groups.

Tom Costello, a principal of the consulting firm Cultural Resource Management Group, has been involved with a variety of friends groups through the years including the Kennedy Center’s Camelot Circle, the St. Louis Art Museum Foundation, and the Friends of Historic Springfield Massachusetts. Costello explains that the problems that arise between organizations and their friends groups are not unlike those encountered by an organization’s executive director in dealing with his or her board. He says he has heard many executive directors say that “it would be a lot easier if I did not have to work with a board.” Such wishful thinking ignores the positive role that boards and friends groups can play in an organization’s development. “There will always be politics of various kinds,” says Costello. “The key is to give a lot of leeway but set up constraints.” Successful relationships between organizations and their friends groups involve “working together, not working at odds,” according to Costello. It helps if the two organizations respect each other’s independent organizational needs but share a common mission and vision.

Case studies: A tale of two friends

In most states, historical functions are administered through quasi-governmental organizations. These organizations typically rely on friends groups to provide financial and volunteer support. In some states, friends groups are organized at specific state-run sites or museums. In others, one or more friends groups provide support for the historical organization at a statewide level. The following two case studies involving state historical organizations and their affiliated friends groups illustrate some of the difficulties encountered with friends groups. These two case studies provide contrasting approaches to these problems. In Pennsylvania, the state historical organization has imposed a “command and control” approach to the relationship with their historic site friends groups. In Michigan, the statewide friends group has taken steps to “decouple” itself from the Michigan History Center and to assert its own independent identity.

Friends of Pennsylvania Historical and Museum Commission

The Pennsylvania Historical and Museum Commission (PHMC) is an independent state commission which oversees the Commonwealth’s principal state historical functions, including a state archives, historic preservation office, and managing a state museum and 24 historical sites throughout the state.

PHMC has had a long tradition of collaboration with non-profit organizations and with friends groups. PHMC has a centralized statewide nonprofit affiliate — the Pennsylvania Heritage Society — which offers memberships, publishes a history magazine, and operates a bookstore. In addition, beginning in 1985 the PHMC established formal friends groups (called “Associates”) at each of its museums and historical sites. Previously ad hoc groups were affiliated with certain individual sites. According to Donna Williams, head of PHMC’s Bureau of Museums and Sites until 2007, some of those ad hoc groups competed with each other and with the PHMC for resources.

Today each friends group is organized as a separate 501(c)(3) tax-exempt charitable organization and is affiliated with a particular historical site managed by the PHMC. The board of each friends group is composed of volunteer members of the community. The site director of the historic site is designated as an ex officio member of the friends’ group board. The relationship between the PHMC and each friends group is governed by a formal licensing agreement and through budgetary and programmatic oversight imposed by the PHMC. The relationship between PHMC and its friends groups reflects a high degree of control by the PHMC. Although a Council of Friends was in existence for a time, there is currently little coordination between the historic site friends groups themselves or between those groups as a whole and the PHMC’s statewide support group, the Heritage Society. In practice, the site director at each museum and historical site exerts a large degree of authority over management of the friends group at that site.

The organizational structure of the PHMC’s historic site friends groups and the relationship between the friends group and PHMC site management create a number of problems which hamper the effectiveness of these groups as supporting organizations. For example, the site director’s involvement in the friends group as an ex officio member of the board creates a potential conflict of interest. In one situation the author is familiar with, the site director refused to provide information pertaining to the licensing agreement between the friends group and the PHMC which was in the process of being renegotiated at that time. This prevented members of the friends’ group board, including the author, from fully exercising their fiduciary duties to the board. The site director’s involvement in decision-making for the friends group, particularly in relation to development efforts, is also problematic. The author is familiar with several situations in which the site director made unilateral decisions about which grants to pursue and how to increase memberships, in some cases overruling decisions made by the friends group board.

The friends group’s role in employment at the historic site is another concern. At some PHMC sites, the friends group employs part- or full-time staff. In one case the author is familiar with, the friends group employed a full-time development officer. However, as a practical matter the development officer reported not to the board but to the site manager and was in effect the site manager’s office assistant. Although attempts were made to change this, the political reality was that because the site director exerted day-to-day management authority at the site, he was viewed as the director for both PHMC and friends group employees. Similarly, while PHMC friends groups are legally responsible for volunteers at the site, as a practical matter management of these volunteers is handled by the PHMC’s site educator. PHMC friends groups also typically hire independent contractors to provide interpretive programming at the site, but have little say in how their activities are managed.

Perhaps the most serious problem with PHMC friends groups is that while they are ultimately responsible for many of the liabilities of running the museum site, they do not have a direct role in management of the site. The site director, who makes management decisions at the site, does not report to the friends group board but to the PHMC. Thus the historic site friends group boards are given most of the liabilities but none of the authority needed to manage the site.

This problem is driven home by the precarious financial position imposed on PHMC friends groups. Under the terms of their licensing agreements, with certain exceptions for particular sites, these groups are not allowed to carry forward budget surpluses from year to year. In addition, pursuant to the terms of their licensing agreements, these friends groups may be shut down by the PHMC at any time. Due to the seasonal nature of many PHMC historic sites, friends groups typically run deficits during slow periods and routinely use lines of credit to manage cash flow. This practice keeps the friends group from being able to make independent financial decisions, and exposes friends’ board members to serious personal financial risk because as board members they are individually liable for the debts of the friends group.

The lack of autonomy also raises questions about the validity of tax-exempt status of the PHMC friends groups. Despite interviewing PHMC’s legal counsel and others, the author has not been able to determine that any legal analysis of the impact of the licensing agreements and organizational structure of these friends groups on the validity of their 501(c)(3) tax-exempt status has been undertaken. It is no surprise, then, that community members are hesitant to provide volunteer or financial support to many of the PHMC’s friends groups.

Although the relationship between the PHMC and its friends groups has not been without controversy, they are viewed by the PHMC as an important alternative source of revenue in the face of diminishing state funding. According to Donna Williams, head of the PHMC’s Bureau of Museums and Sites until 2007, “These support groups (associates or friends) have become an essential component of our program, and overall, they generate about 30% of our operating budget.” However, the importance of friends groups as a source of revenue may be overstated. A large portion of the income generated by the PHMC’s friends groups is derived from site-specific admissions revenue which would otherwise go into a designated fund administered by the state treasurer. With regard to admissions revenue, it is the author’s understanding that the PHMC’s friends groups do not actually generate additional revenue — in reality PHMC’s friends groups simply allow the PHMC to redirect revenues to which it is already entitled. In addition to admissions revenue, PHMC friends groups generate revenues through the operation of museum stores, special events and, at some sites, through facilities rentals and the sale of goods created on site. While these activities are a potential source of additional revenues, the income they currently generate is typically modest at best, and is largely offset by expenses, including expenses which are not fully accounted for, such as staff and volunteer hours.

Friends of Michigan History Center

The Michigan History Center was the result of a governmental reorganization and consolidation effort in 2001-2002 in which the state’s principal historical functions were brought together in one centralized location. The Michigan History Center houses six state agencies which administer various aspects of Michigan’s public history programs, including the state’s historic preservation office, archives, and 13 state-run museums as well as the State Museum in Lansing.

The Michigan History Center has two friends groups — the Michigan History Center Foundation and the Friends of Michigan History. The organization and culture of these two associated support groups could not be more different. The Michigan History Center Foundation was established by the Michigan History Center to raise private funds and foster private and public support for the Michigan Historical Center’s state museum, archival, archeological, historic preservation, publication, and heritage education programs. These funds typically come from larger contributors, including corporations, foundations and wealthy individuals, and from an annual fundraising gala. The Michigan History Center Foundation is governed by a board of directors which includes the head of the state’s Department of History, Arts and Libraries, the Director of the Michigan History Center, and the head of the State Board of Education, among others. The Michigan History Center Foundation has a paid Executive Director and two paid support staff.

The Friends of Michigan History was originally formed in 1991 to provide support for the Michigan Historical Center programs and state-run museums. The Friends financial support comes through memberships, smaller individual donations, and several fundraising events held throughout the year. The Friends of Michigan History is governed by an independent volunteer board and has no paid staff.

Maintaining positive relationships between these three groups has been a challenge. According to Francis R. “Bus” Spaniola, President of the Friends of Michigan History, the two friends groups “have been at loggerheads from the beginning.” The tensions between these two organizations arose from their overlapping missions and as a result of expectations and demands placed on each other and by the state-run Michigan History Center. Disagreement over the relationship between the Michigan History Center Foundation and the Friends of Michigan History, how the Friends supports the Michigan History Center, and their financial support for historical organizations other than the Michigan History Center, has caused some “real arguments” between the three groups, according to Spaniola. In part these disputes are procedural. For example, Spaniola says Michigan History Center employees complain about having to provide documentation in order to be reimbursed for conference travel expenses from the Friends.

However, the real tensions appear to be the result of disagreements about the mission of the Friends of Michigan History, its assertions of independence from the Michigan History Center, and its relationship to the Michigan History Center Foundation. In the President’s Annual Report for Fiscal Year 2006/2007, Spaniola referred to these disputes, noting that a “significant amount of energy was directed to the resolution of this problem, which unfortunately diverted attention from our normal support operations.”

In an interview with the author, Spaniola explained that a change in leadership of the Michigan History Center gave the parties the opportunity to hammer out a basic understanding of the relationship and responsibilities of each of the parties. As a result, the Friends of Michigan History revised its Articles and Bylaws to clarify that its mission is to support not just the Michigan History Center but also to provide assistance to other historical organizations throughout the state. In this way, the Friends have asserted their independence from the Michigan History Center and positioned themselves to be a stand-alone organization whose mission is to support historical organizations statewide. In addition to addressing the fundamental dispute between the three organizations about their relationship and role in supporting historical organizations in Michigan, the Friends of Michigan History’s assertion of independence is also important from a tax perspective — it affirms the Friends’ status as an independently run non-profit organization in conformance with IRS requirements.

While asserting its independence, the Friends of Michigan History has also found ways to strengthen its relationship with both the Foundation and the History Center through collaborative efforts. For example, they have structured an agreement with the Michigan History Center Foundation by which the Foundation provides some bookkeeping services to the Friends. In addition, whenever the Foundation receives a donation it purchases a membership in the Friends, which in turn provides membership benefits to the donor, including copies of their award-winning history magazine. The Friends continues to support, often in partnership with the Foundation and with other funders, programs and exhibits presented by the History Center. The annual Statehood Day is an example of how the History Center and the Friends work together — the programming is put together by museum staff while the Friends provide money for speakers and pay reception costs.

The Friends have also found ways to develop partnerships with other organizations. They have entered into an agreement with a local credit union to extend credit union membership benefits to Friends members. They are also developing an Affiliate program by which individual museum friends groups can collaborate with the Friends of Michigan History to share membership dues. In the end, the successful resolution of the Friends dispute with the History Center and the Foundation lies in clearly defining the relationship between the parties. This required both structural changes in the organization, including clarifying the organizational mission, as well as forging good personal relationships between the people who represent the competing organizations. The Friends now have a strong sense of their individual identity. Their relationship with the History Center and the Foundation is “arms-length” enough that the Friends do not feel pressured by museum staff or by the Foundation board. By asserting their independence while maintaining relationships, the Friends have managed to forge a true partnership with their principal organization and its other affiliates

The best of friends

The preceding two case studies demonstrate the range of organizational structures employed by principal organizations and their affiliated friends groups. The relationship between principal organizations and their affiliated friends groups is the result of a number of forces, including:

  • the nature of the principal organization (non-profit or governmental);
  • the history of that organization and the needs that are served by the friends group; and
  • the mutual give and take by the two entities.

While each such relationship is unique, certain best practices have been identified. These best practices provide guidelines for establishing and maintaining effective relationships with friends groups.

Hedgepeth has identified three best practices for university foundation fundraising which are equally applicable to other forms of friends groups. According to Hedgepeth, the supporting organization should:

  1. base its case for support on the principal organization’s strategic agenda and in support of the principal organization’s mission;
  2. provide a frame of reference that keeps the principal organization focused on fundraising; and
  3. maintain the integrity of the philanthropic process by validating donors’ rights and ensuring effective stewardship of donors’ gifts.

The key to success is the careful balancing of each entity’s role and obligations with respect to fundraising. This requires both an adequate degree of independence for the supporting organization as well as a high level of coordination with respect to the fundraising functions between the two entities. According to Hedgepeth, the supporting organization’s “need for autonomy and organizational independence should not diminish the reality that [it] exists to support and enhance the institution’s mission.”

There have been a number of other efforts over the years to define best practices for friends groups. The Center for Park Management completed a study entitled “Best Practices in Friends Groups and National Parks” in 2005. The CPM study identified seven key elements of successful partnerships between friends groups and the national parks. These elements include:

  1. a shared mission and goals;
  2. trust;
  3. mutual contributions;
  4. clear communication;
  5. commitment to a long-term relationship;
  6. a culture of sharing and collaboration; and
  7. mutual respect.

The National Park Service website states “The difference between success and dysfunction in relationships between Parks and Friends Groups is largely determined by clarity of need, leadership, alignment, and mutual respect and support. The Park staff and Friends Group Board need to be prepared to invest in creating and sustaining a productive relationship.”

A number of other organizations and professional groups have adopted policies or guidelines for establishing and working with friends groups. For example, the World Federation of Friends of Museums has adopted a Code of Ethics for Museums Friends and Volunteers. The Code of Ethics emphasizes the importance of collaboration between the principal organization and its supporting friends groups. Other groups, such as the British Association of Friends of Museums, have provided guidance on the relationship between museums and friends groups. Individual institutions — most notably colleges and universities — have also adopted policies for managing friends groups.

All of these studies, guidelines and policies emphasize that to be effective, friends groups must be treated as equal partners with the organizations they support. They must be involved at the highest levels of the principal organization. They must participate in defining the organization’s mission and strategic vision. The mission and values of friends groups must be clearly aligned with the organizations that they support. Friends groups must be allowed to monitor and understand the decisions made by the organization, and given the ability to participate in the decision-making process of the organization. There must be clear paths of communication between the principal organization and its friends groups. The mission, policies, and programs of the principal organization must be clearly articulated to the friends group.

The friends group must understand and appreciate the activities and the culture of the principal organization. Friends groups have a responsibility to clearly and accurately communicate the organization’s mission, values, and goals to the public. In addition to articulating the principal organization’s mission, friends groups must also have sufficient independence so that board members can exercise their fiduciary duties to their own organization. Finally, friends groups must be able to exercise sufficient stewardship of donors’ funds. To accomplish this, friends groups must be able to influence programmatic and administrative management of the principal organization. Finally, friends groups need to be able to access both the information and the tools necessary to accomplish their supporting mission.

Conclusion

While non-profits and governmental organizations increasingly rely on friends groups as part of their fundraising efforts, the rationale for establishing these groups varies. It is important for each organization to look carefully at the reasons for establishing friends groups and the particular functions they serve. In some cases, friends groups may not be an effective means for fundraising. In other cases, the relationship between the principal organization and the friends group may need to be restructured to promote a more effective partnership.

To be effective supporting organizations, friends groups must have sufficient autonomy to manage their own affairs and exercise the obligations of an independent non-profit organization. They must also be sufficiently aligned with the mission of the principal organization and have sufficient involvement in the principal organization be able to exercise stewardship over donor funds. The relationship between a principal organization and its friends group is like a marriage, according to Tom Costello. A high level of trust and willingness to collaborate are essential to a successful partnership.