The nonprofit sector is incredibly diverse, but regardless of your mission, geography or age, there are some key similarities about nonprofit leadership.
Of course, there are exceptions like universities, hospitals and foundations, but most public charities have a CEO or executive director (ED) who operates within a framework.
Everyone inside a nonprofit should know what an executive director does. It’s time to pull back the curtain and demystify the role.
I have found that when employees and board members learn the specifics, there is a newfound appreciation for what these leaders do.
This can lead to role misalignment and, therefore, dysfunction.
Consequently, when someone applies to be an ED, they may have a very different idea of what the role entails.
Some new EDs are drawn to the program work because it is sexy and rewarding. Others will cling to the administrative or operations work and ignore fundraising.
The vast majority of nonprofit EDs will need to push out of their safe zone. They cannot outsource or delegate the unpleasant parts of the job (at least not forever).
The role of ED will look slightly different in every organization, and that’s OK. I have been an executive director for five different nonprofits; all of them very different.
1. Leadership. In my experience, the following framework of ten responsibility areas, or areas of work can be helpful. I normally talk about the “9 Areas” but have decided that “diversity, equity, and inclusion” is not just a dimension of the other areas, but a stand-alone area as well.
The board technically governs a nonprofit, but the ED runs the day-to-day operations, so that means all organizational stakeholders see the ED as the most visible and clear embodiment of organizational values and commitment at the organization.
The ED was hired to get results. This means they have to make tough decisions, while also modelling good behavior.
Being a leader, almost by definition, means you won’t be liked by all people. But the effect should be that they are respected by most.
The ED should be able to articulate the vision, mission, theory of change, statement of need, unique value proposition, and overall strategy and direction of the organization.
They need to build alignment across the organization. This doesn’t mean everyone must agree on everything, but everyone should be rowing in the same direction.
If they aren’t, it’s the ED’s job to uncover this misalignment and make the correct adjustment.
The ED is also what I like to call the Chief of Enthusiasm and Optimism (CEO). In any political campaign, even if the candidate is going to lose, they and the campaign manager must emit hope, optimism, and a bold vision, or your base of support will dry up.
It is the same for EDs. It’s OK for an ED to know they might lose a battle, but they must believe they will win the war (metaphorically). Donors, volunteers, and staff will have lower morale and probably leave if the ED is not the CEO.
The ED must also be comfortable embracing ambiguity because sometimes they need to proceed when the field ahead isn’t obvious.
Leadership means being able to avoid or manage dysfunctional conflict, (personal and emotional) but embrace functional conflict (professional and healthy disagreement about strategy and direction).
Leaders also should work to interrupt groupthink and mission creep. They should be aware of group dynamics and foster healthy differences of opinion.
EDs should be attuned to cognitive biases that distort all organizational decision-making. Leaders should ask “are we doing things right, or doing the right things?”
2. Fundraising. I am a firm believer that boards need to fundraise, but they will need a lot of help from the staff. Ultimately the ED is responsible for making sure that the staff hit their goals. This means that even if the vast majority of tasks are delegated, the ED is still responsible for creating the conditions for success (vision, materials, pitch, call-time, training, technology, etc.)
Fundraising is the one part of a nonprofit, that I routinely see ED’s try to give away. They must ensure the funds are there to execute the budget.
If a nonprofit is fortunate enough to have development staff, that staff should be executing the day-to-day tasks, but you can’t expect fundraisers to hit their numbers without leadership.
EDs should be giving direction, while making themselves available to the development staff and development committee.
Donors want to talk to the ED, not necessarily the development staff. Also, the ED should be the person bringing in the most dollars from major donors. They should be the one discovering and closing the major gifts most of the time.
The ED makes the powerful pitch from the podium at the gala (usually).
The development staff set up the meetings, but the ED closes the deal.
The ED does not need to be a charismatic extrovert. They must know how to effectively persuade people to dig down and contribute. The ED should make sure everyone inside the organization can tell its story well.
Every ED position I have been offered (five) has probably been because I promised to do what the other applicants hated: fundraise.
The ED must create as many “right places at the right times” as possible. Don’t be insular. The ED should create a culture of “asking” for financial support.
The ED cannot wholly delegate this. I have heard every possible excuse for avoiding fundraising. “I was brought on as a subject matter expert,” or “I was told I didn’t need to fundraise,” “We have an endowment.”
Resist the temptation to succumb to these excuses. Step into your leadership and become a great fundraiser.
3. Board Development. The board owns the nonprofit.
That’s uncomfortable to read, but it’s true. All not-for-profit corporations are still corporations and all owners of all corporations are responsible for revenue. It’s corporate law.
The ED works in partnership with the board, and for the board.
However, because the ED is staff, it is considered a best practice to assist the board in their operations, administration, planning, and information dissemination.
EDs should help build, sustain, and strengthen all board functions, like meetings, policy compliance, and committee work.
The ED should work to build alignment while also maintaining role clarity (division of labor between the board/chair/ED).
The best investment an ED can make for their own tenure, is supporting the board and building rapport with its members, especially the chair!
If you have been given a poor-performing board, you can turn it around in 90 days.
4. Financial Management. An ED must demonstrate competence in reading, creating, and understanding financial documents including budgets, cash flow, income statements, balance statements, and statements of functional expenses.
The ED does not need to understand bookkeeping software…they need to understand the financial picture.
They should understand the basics of 990 tax returns, audits, and compliance. Creation and adherence to financial controls are also important.
If this is all Greek, then the ED should get some training. My favorite company for helping nonprofits is Fun with Financials.
5. Human Resources (HR). When it comes to human resources, the ED must ensure that onboarding, recruitment, retention, management, development, and compliance are carried out with excellence.
This means the ED must be responsible for delegation, decision-making, creating clear staff roles (job descriptions), and supervising collaborative tasks (projects/meetings) to ensure that they are done efficiently, inclusively, and with respect.
Some EDs hire a deputy director to help with this, but ultimately it is still the ED’s job. The ED sets the compensation policy, including benefits.
6. Diversity, Equity and Inclusion (DEI). In seeking to achieve the organization’s mission, EDs will constantly be challenged by questions of diversity, equity and inclusion. Your organization is better positioned for mission attainment, funding and building your base, if you make this a priority.
Increasingly, community stakeholders will expect your organization to be making progress so that women, people of color, LGBTQ people, people with disabilities or religious minorities don’t feel disrespected, excluded, or isolated in their roles.
Many organizations believe that if they simply prohibit biased behavior, they have done all they need to do. But we live in a culture that is filled with insensitive comments, implicit bias, and unequal treatment.
We owe it to the people we serve (and to everyone else) to dismantle these inequities whenever possible. This is hard work, which means it requires a certain level of humility, patience and diligence to root out oppressive and biased patterns.
DEI work, at a minimum, may take the form of respecting the pronouns people use, noticing if women and people of color are being interrupted or passed over in group conversations, and ensuring that you compensate people fairly.
It may mean training, ongoing conversation, and learning. But it is not, I repeat, it is not some optional add-on.
You cannot reach your mission without DEI work, because if you try, you will leave people behind and you will never attract the top talent to your team.
7. Operations and Technology. EDs must create the conditions for success at all levels within the nonprofit.
This means that an ED should ensure that proper hardware and software is in place for fundraising, collaboration, document creation and storage, communication, productivity, and record keeping.
As your organization grows, you will need policies to ensure the use of the most relevant and efficient technology and you will need to upgrade for future success.
EDs need to ensure that and organization operates correctly. This means that vendors and staff get paid, obligations are met, meetings aren’t missed and that you have safe working conditions or physical space for your service population.
8. Programs and Activities. EDs must work with the board, staff and other stakeholders to ensure that the mixture of programs and activities utilized by the organization are reaching the mission.
Stakeholders expect the ED to set the strategy and to achieve outcomes. EDs must also balance charity vs advocacy. For example, should the organization feed the hungry or work to end hunger? Or Both?
EDs may not be “in the weeds” on program matters, but they should be creating the big picture with the board, while also ensuring the quality and effectiveness of each programs and activity.
The board leads the process for strategic plan (if your organization has one) with lots of input from the ED and staff. The ED then serves as a liaison between the board and staff to ensure implementation of the plan.
Staff play a key role in the day-to-day leadership and implementation of programs. Their technical and subject matter expertise is vital to an organization’s success.
Leaders of nonprofits must be open to accountability from stakeholders. If you are naturally defensive, you may end up isolating yourself.
Remember, just because you are responsible for almost everything, doesn’t mean you have to know everything.
People appreciate authenticity and vulnerability on your journey as an executive.
Finally, the ED should also be an industry thought leader and be on top of the trends and developments in your sector.
This usually just happens in the normal course of the job, but you’d be surprised (or maybe not) how many leaders at stuck in an old way of doing things.
9. Community Relations and Communication. The ED should develop and maintain strong relationships in their sector, their region and among peers, donors, and industry associations, with the media, and more.
Strong and strategic nonprofit leaders build alliances, and strategic partnerships, and figure out who can give you what you want, including lawmakers, foundations reporters and other thought leaders.
EDs should be collaborative with other organizations and be transparent. Make sure you communicate regularly with stakeholders and the public. Normally this comes in the form of an annual report, mailings or a newsletter.
If you are too insular, you will miss many opportunities to help your organization and your own career. When you engage the public, you’ll find future donors, leaders and volunteers. If you keep your head down in your work, you’ll miss it all.
10. Compliance and Best Practices. As an ED your job is to get results while minimizing risk.
Stay in compliance with all laws and regulations. Create systems to monitor all of this. Even beyond legal compliance, ensure your organization is meeting the highest standards possible for your industry and region.
You should understand the legal frameworks of creating and running a nonprofit.
There are federal rules to follow from the IRS and elsewhere. There are also rules in the states you are operating or are incorporated in (if they are different), and there may be local rules as well.
Lastly, being an ED means having good judgement. None of these tasks are easy and they can’t be checked off on a list even in your first month.
It is all a juggling act. Sometimes you will fail, and that is OK. No one runs an organization or a company without mistakes. Running a nonprofit should be joyful. Sure, it can be stressful too, but by keeping a bird’s eye view on these 10 areas, you can safely say you have done what you were hired to do.
Grab the infographic that goes along with this blog post, and my Free Executive Director Toolkit here.
For more information on running a nonprofit organization, find Sean at www.NonProfitFixer.com.
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