What Does Nonprofit Sustainability Look Like?
I often hear community leaders and elected officials pontificating about the importance of a “strong, sustainable nonprofit sector” as a way to enhance overall community health. They talk about the business and municipal communities partnering with the nonprofit sector to better address problems and bring a more holistic approach to the collective work. Unfortunately, I have rarely, if ever, heard any of these people exhibiting any true understanding of what a strong, sustainable nonprofit organization actually looks like, or the resources that are needed to accomplish this. So, what does a sustainable nonprofit organization even look like? And, how can we work actively to help the sector be as sustainable as we say we want them to be? In the environmental sphere, sustainability means ensuring that we are using our natural resources wisely and in ways that don’t totally deplete them. The same is true in the business sector – sustainability means ensuring that a company has sufficient resources to survive, maintain, and grow over time. For the nonprofit sector, sustainability can seem more precarious simply because of the nature of their structures and funding sources. But at the end of the day, a nonprofit is a business first, and the same fundamental principles of sustainability apply whether we’re talking about a for-profit or a nonprofit business. So, what are the primary components of nonprofit sustainability that its leaders must be attentive to? And, how can the community leaders, who verbalize their commitments in the most well-meaning of fashions, ensure that these organizations can continue their important roles in our communities for many years to come? Component #1 for Nonprofit Sustainability: The Strategic Plan A strategic plan is the road map for any business’s success. Without a plan that looks ahead 3 to 5 years, a nonprofit is at risk of stagnation, mission creep, and all sorts of other preventable issues. Strategic planning should be a top priority for any nonprofit leader and board member, as it sets the vision and charts a measurable path to accomplish organizational goals. Not only this, a good strategic plan puts accountability in place with clear, measurable objectives and outcomes that can be revisited at the end of each year to determine progress and impact. As a former nonprofit executive director and current, active board member for several organizations, I understand deeply the value of a strategic plan and the importance of keeping it at the forefront of the work. Anyone who gets involved with a nonprofit should read and become familiar with the organization’s strategic plan…and advocate for the creation of a plan if there isn’t one. Also, it’s always best practice to revisit the plan each year to check in on its implementation and make any tweaks that may be needed along the way. Component #2 for Nonprofit Sustainability: Adaptability The most successful and sustainable nonprofits are highly adaptable and attentive to fluctuations and changes in their broader ecosystems. These are the organizations that understood how to “pivot” long before the COVID-19 pandemic popularized the word and forced us all to figure it out (or go bust). Sustainable nonprofits tend to be headed up by fearless, information-driven leaders, people who pay attention to trends and resist the urge to maintain programs or activities strictly due to tradition. Some of these dynamic leaders seem to operate by instinct, but the most thoughtful of this group actually do a lot of homework behind the scenes. Analyzing data, having conversations with peers, staying informed about current or upcoming issues that could impact their organizations. For those who serve on the boards for these nonprofits, it’s imperative to not leave all the adapting to the executive director while board governance stagnates. True partnership between a board and its leadership team requires strong communication. This is the only way to be sure that shifts and pivots are well thought out, that consensus is built, and that implementation occurs organization-wide instead of in silos. Let’s be open to change and adaptation, and deliberate and thoughtful about its implementation! Component #3 for Nonprofit Sustainability: Planned Succession Most nonprofit leaders I know are pretty good at succession planning for their boards of directors. If their bylaws require board turnover via term limits, succession planning gets baked into how the organization functions. However, succession planning for staff and leadership is also super important for building a sustainable nonprofit. Not only should the leader be thinking about the skills and/or representation needed to maintain a healthy board, he/she should also be planning for their own eventual departure from the organization. For every nonprofit I have been involved with, whether as a board member, a staff member, or an executive director, I have operated under the philosophy of “leaving it better than I found it”. In my experience, this means taking the board development and succession planning process seriously, and it also means taking deliberate steps to improve the organization’s structure, operations, programs and staff to prepare for the day when I will no longer be involved. This type of succession planning may seem difficult, especially when there is so much to do on a day-to-day basis. But it’s so important to any nonprofit’s long-term health. We must always operate with a long-range vision for our organizations – whether we are board members or paid staff – and take incremental steps that move our organizations towards greater sustainability while we are involved. Component #4 for Nonprofit Sustainability: Diversified Funding The fourth and final component I’ll share related to nonprofit sustainability is also the most difficult to achieve: a diverse funding model. Building a funding model of any sort in the nonprofit sector is difficult enough but establishing funding diversity is extremely tough…and also extremely important for long-term organizational sustainability. Financial sustainability requires sufficient resources to pay for overhead, staff, and programming. It also requires a build-up of reserves for unforeseen challenges. This should be enough to cover at least 3 months of the operating budget. Lastly, financial sustainability requires
Five New Year’s Resolutions for the Nonprofit Leader
Happy 2023, friends in the nonprofit sector! If you’re anything like me…and pretty much everyone else on the planet…you’re working hard to step into the new year with intention. Whether you’ve resolved to lose a few pounds, or train for a marathon, or finally get your household budget together, please know that we’ve all got something we want to get handled in the new year. Personal goals and resolutions are a great way to start a new year, and it is also true that the personal tends to cross over into the professional for many of us. So, I’m here to offer a gentle reminder that our professional intentions are just as important as those personal resolutions. How we as nonprofit leaders show up at the start of the year can really make or break the type of year our organizations have. I’m talking about how well we care for ourselves, our teams, and our boards. Remember, friends: we can’t fulfill our missions and serve our clients unless the house is in order! Here’s five quick tips to make sure you’re starting the new year with intention: 1. Find (and Protect) Your Balance – of course this is the first thing on every professional’s to-do list, right?! Prioritizing work-life balance is of utmost importance, especially for those who work in the nonprofit sector where there are never enough resources or hours in the day to accomplish all that needs to be done. Just remember, friends, you can’t take care of anyone else unless you are taking care of yourself. One thing I’ve learned in my long nonprofit career is that almost everything can wait until I have had a good night’s sleep. Another thing is that there is no organizational priority that should cost me my health. Period. So, start now: find some boundaries and set them. Say no when no is what needs to be said. Go home at a reasonable hour. Let a few of those emails and to-do lists wait until you’ve had some sleep (and exercise). Just do it. You’ll be better off for it, and so will your productivity. 2. Ask for What You Need – leading a nonprofit organization is a calling. The people who answer this call are among the hardest working, kindest, and most generous people I’ve ever met. They are also the folks who will work themselves to the bone, taking responsibility for everything from managing organizational finances to running programs to scrubbing floors if that’s what needs to be done. But, the fact is that most nonprofit leaders do have resources that can be used – human resources, financial resources, technology resources – we just have to remember how to identify what we need and ask for it. Start the new year resisting the pull of the hero complex, friends! “Doing more with less”, while noble, is also the quickest way to burn out. Figure out where your time is best spent and where you need additional hands and/or expertise. Then, have a conversation with your board and ask for what you need. It sounds simple because, well, it is. 3. Support Your Team – setting your nonprofit up for a successful year should always include investing in your team’s professional development. Speak to your team members about their professional goals and what you can do to support them in the immediate term. Listen to their words and do your part to give them what they are asking for. Do you have a team member with significant growth potential? Maybe they’re ready to take on a new responsibility for the organization. Do you have someone who want to learn a new skill that will help them do their job better? Send them to a conference or hook them up with a mentor who can help them grow. Nobody wants to be stagnant, friends…not you, and certainly not your team. Invest in their growth and you will definitely see results! 4. Nurture Your Board – a new year is an excellent time to revitalize your relationships with your board members. After all, the board of directors is the most important group of volunteers any nonprofit organization has. So, it behooves the nonprofit leader to nurture these relationships to ensure that board members remain engaged and committed to the mission and their important work. Try offering an annual refresher course in board governance. Extend a board meeting by 30 minutes to allow a bit of camaraderie. Connect with each board member personally over coffee or lunch. Ask board members how they’re feeling about their service. Solicit their feedback and ideas. And, always thank them for all they do to support you and the organization. 5. Create (and Follow) Your Plan – in a perfect world, every nonprofit has a robust strategic plan that they follow to a tee. In the real world, most nonprofits are lucky if they have a simple annual roadmap to help focus their work for the year. Whatever form your plan takes, just make sure you have something that will help keep you focused for the whole year. A good annual plan will include at least one organizational and programmatic goal. It will also include a financial goal to help drive fundraising efforts to help accomplish the organizational and programmatic goals. And no plan is complete without the ability to evaluate success, so be sure yours includes responsible parties and measurable outcomes. It’s going to be another fantastic year of nonprofit excellence, friends! Hope these tips are helpful, and please be sure to share your tips in the comments for starting the new year with intention!
Navigating Nonprofit Leadership…Without Losing Your Mind (Pt.1)
I absolutely adore the nonprofit sector. I love that it is mission-driven, service-oriented, and aimed at solving some of society’s biggest problems. I love the grassroots nature of many of these organizations, and the way they learn and adapt to the needs of their communities. But what I love the most are the two ingredients that give the sector its heartbeat: the people who lead these organizations, and the passion they infuse into everything they do. The people who lead nonprofit organizations are some of the most passionate folks I’ve ever met: these are the advocates, the activists, the change makers, the doers. Unfortunately, these are also the people who will work themselves to the bone to make sure their organizations are making positive impacts in their communities. The fact is, there’s always more to do, and never enough time or resources. This is the reality for many small and midsized nonprofit organizations and the executive directors who lead them. So, how does an executive director effectively position him/herself to lead when the day-to-day realities get in the way? How does an executive director excel as a leader if he/she is too busy with all the “doing” that goes into managing a nonprofit organization, its programs, and its people? I believe the first step in empowering a nonprofit leader to do their best work is to provide them with an understanding of the things they should be most heavily focused on. Once a leader is clear on where they should be spending their time and energy, he/she can start figuring out what they need in terms of time, resources, and professional boundaries, to be the best leader they can for their organizations. In Part 1 of this post on nonprofit leadership, I am focusing on six fundamental leadership duties that every executive director must be familiar with. Next time, I’ll offer some practical tips to help nonprofit leaders find balance and maintain their sanity in the face of competing priorities. OK, here goes: Six leadership fundamentals that every nonprofit executive director must know… Human Resourcing – even if your nonprofit has a human resources professional on staff, the executive director is still one of the most important people involved in recruiting staff, board members, and volunteers. It is the E.D.’s responsibility to ensure that the organization has the human resources needed for good governance, operations, and programming. This includes nurturing a strong board of directors, hiring and training staff and volunteers, and creating a culture where everyone feels valued and appreciated along the way. Financial Management – the nonprofit executive director must have a solid understanding of their organization’s finances, financial cycles, and revenue projections. While it is true that the nonprofit board is fiscally responsible for the organization, the E.D. is often responsible for creating the annual budget, developing forecasts and projections for the board, and identifying new fiscal issues that arise due to strategic organizational shifts or other changes, whether foreseen or unforeseen. Fundraising – the E.D. is also chief fundraising officer for their organization. Sure, some of the fundraising work can be delegated to grant writers or other paid development staff, but the largest donors and grant funders are going to expect face time with the leader. A nonprofit E.D. must be comfortable with fundraising and donor relations and be prepared to spend a great deal of their time doing this type of work. Program Knowledge – although the nonprofit E.D. should NOT be spending the bulk of their time implementing their organization’s programs, this person should be the primary person out in the community talking to people about the programs as part of their fundraising and community relations duties. This means they must know enough about each program to clearly articulate their activities, their impacts, and their needs to donors and other community stakeholders. Planning – the E.D. should be thinking at least 2 years ahead at all times – about programming, about staffing, and about the organization’s board. On the program side, the E.D. should be considering trends related to the organization’s target population and thinking about how programs might need to change or expand to accommodate shifting community needs. On the staffing side, the E.D. should be conscious of growing staff needs to meet program growth and professional development goals. And, in terms of the board, the E.D. should be thinking about what expertise will be lost through term expirations or term limits, and what types of expertise and representation is needed moving forward to maintain a strong organization. Community Relations – the E.D. should be spending more time out in the community than sitting in the office. Their role is to be out there creating new relationships and nurturing existing relationships – with the board, with major donors, with the organization’s natural partners or collaborators, and with other major community stakeholders. As the face of your organizations, the E.D. should be the first person that comes to mind when your organization comes up in the community. Next time, I’ll share a few practical tips to help the nonprofit leader maintain their sanity among competing priorities…and stay focused on leading!
Have You Checked Your Conflict of Interest Policy Lately?
Friends….Can we please talk about conflicts of interest for a few minutes? This won’t take long. We’ve all seen stories in the news about some of the more egregious examples of conflicts of interest. Individuals caught enriching themselves at the expense of one or more organizations they’re involved with (self-dealing). Business leaders making sweet-heart contract deals with friends and family members (nepotism). People using information not available to the general public to profit personally (insider trading). The examples are everywhere, and it seems to happen all the time. It’s no surprise, then, that we can become desensitized to the very real damage that a conflict of interest can do…to an individual’s reputation, to a company’s bottom line, and to an organization’s ability to continue its mission in the community. But let’s not be complacent, friends. This is a serious issue for any business, but particularly for nonprofit organizations. Did you know the IRS can strip your nonprofit status for conflict of interest violations committed by board members? Yep. Sure can. The IRS defines a conflict of interest as follows: A conflict of interest occurs where individuals’ obligation to further the organization’s charitable purposes is at odds with their own financial interests. Pretty simple, right? Unfortunately, the reality is that despite this simple definition, conflicts of interest aren’t always easy to identify. That’s because business and personal interests and relationships are often complex and nuanced. In addition, nonprofit leaders rely on the honesty and ethics of board members to be up-front about disclosing real or potential conflicts before they cause problems. This usually happens, but sometimes it doesn’t. And when a conflict arises, seemingly out of nowhere, the primary tool that a nonprofit leader has to address it is the organization’s written conflict of interest policy. Yes, written policy. It is not enough to talk about conflicts of interest. Nonprofit organizations are required by federal law to have written conflict of interest policies that apply to their boards of directors. Best practice also dictates that these policies apply to staff as well. A written policy is the first line of defense in terms of preventive measures that can mitigate the damage that conflicts of interest can cause. In addition, ensuring that board and staff acknowledge their understanding of the policy, in writing, is equally important. What this typically looks like in practice is an annual conflict of interest disclosure form that gives board and staff members the opportunity to disclose, in writing, any real or potential conflicts of interest and acknowledge that they understand the organization’s policies related to the issue. The annual disclosure and acknowledgment process is an opportunity to remind everyone involved in your organization about the importance of ethics in nonprofit management. So friends, please resist the urge to gloss over the subject when it’s time to complete this annual process. Lead by example…if you as the organization’s leader act like this is an important issue, your board and staff are more likely to treat it as important as well. A related issue that I will write about another time is the utility of having a robust board recruitment process in which potential board members are vetted properly before being asked to join a board of directors. Proper vetting in advance can uncover potential conflicts before board service even begins and help prevent surprises down the road. We all know what conflicts of interest are. We all know how serious the consequences can be when they go undisclosed and unchecked. I’m just here to gently remind you: please don’t be complacent about the issue. Even the perception of a conflict can cause very real and lasting damage to your organization. Take care, friends!
Organizational Culture – Good or Bad, You Choose.
I have been doing a lot of reading lately about organizational culture. The topic is certainly not new to me, but I’ve been fascinated by it for many years, dating back to my banking career and subsequent transition to the nonprofit sector. Like just about everyone I know, I have worked in companies with strong, healthy cultures as well as some with toxic, unhealthy ones. I have experienced work settings where management was mostly unavailable, staff was fearful, and everyone was suspicious of everyone else’s intentions. I have even survived organizations where leadership purposefully fostered cut-throat competitive cultures because they mistakenly assumed it was good for productivity. As I type this, it feels like I’ve experienced more unhealthy organizational cultures than healthy. Could this be true? Maybe. But more likely, it’s that our negative experiences tend to linger in the memory longer than the positive. Organizational culture is defined as the values, beliefs, practices, expectations, and methods of interacting that create the professional, social, and psychological environment of an organization. Company culture has been researched by many, and we have all seen examples in the news about what can happen when organizational culture goes wrong. I truly believe that nonprofit sector leaders understand the importance of organizational culture just as well as leaders in the for-profit world. Unfortunately, knowledge doesn’t always translate into deliberate actions…particularly in under-resourced nonprofits that are simply trying to survive and serve their client base each day. Whatever the reasons, organizational culture is one of those issues that we understand in theory but don’t always have the wherewithal to pay attention to in practice. Is organizational culture overlooked because culture is difficult to causally connect to performance metrics? Could it be because culture is not a topic that is easily pointed out in a policy manual? Perhaps it’s because this “culture” thing is really a confluence of behaviors that, taken individually, wouldn’t necessarily be identified as impacting the overall atmosphere of an organization. Despite its ambiguous nature, organizational culture is created, fostered, and passed on. Negative culture may be easier to identify because its symptoms are easy to see in the form of miserable faces, high turnover, and lack of transparent communication between leadership and staff. The other unfortunate reality about negative organizational cultures is that they’re difficult to change because they become entrenched in every aspect of the organization. So, what are some of the things a nonprofit leader can do to foster a healthy organizational culture? Here’s a few of my favorite suggestions: Model mission alignment. As the chief leader, a nonprofit executive director plays a huge role in establishing and nurturing organizational culture. It is this person’s job to ensure that everyone on the team, and everyone on the board of directors, understands the organization’s mission and aligns their day-to-day work, advocacy, and decision making with this mission. If the head is not modeling mission-aligned behavior, he/she can’t expect anyone else in the organization to. Democratize your decision-making process. While it is certainly true that the buck stops with the head of the organization, a nonprofit executive director should never make decisions in a vacuum. First, he/she must know when a decision needs board approval, which is typically in relation to major policy changes, major financial decisions outside of the normal budget process, etc. But in the arena of day-to-day decision making, an executive director has a huge opportunity to nurture a culture of transparency and trust among their team. Sure, the E.D. makes the final decisions, but by encouraging team members to ask questions and offer feedback, the head is modeling that they value their team’s experiences and that their perspectives actually matter. Communicate with everyone, all the time. A good nonprofit leader talks with their team regularly. They talk to their board members, even outside of scheduled board meetings. They are transparent about what is happening within the organization – good and bad – and how what’s happening will impact the work. A leader who knows how to lay their cards on the table earns peoples’ respect and trust far more quickly than a leader who keeps their cards close to the chest. Also, communication with external constituents is just as important to building an organization’s brand and culture as its programs or events. Transparency breeds trust. Trust breeds investment. Investment breeds success. And on and on. Overall, executive directors must encourage and model transparency both internally, among staff and between staff and leadership, and externally, between the organization and its clients, donors and other constituents. Foster an atmosphere of support & respect. This sounds obvious, but if you’ve ever experienced a workplace where this is missing, you know it isn’t obvious at all: a leader who is attentive to nurturing a positive culture treats their team members like human beings. They assume that their staff members have goals that may eventually take them from your organization – and they do what they can to support them. They remember that their team’s personal identities are not defined by their jobs. They set professional boundaries for their own work/life balance and encourage their team members to do the same. And, they remember that their board members are volunteers and respect the time and commitment they give to the organization. The moral of this story is that organizational culture exists whether it is deliberately created or not. My advice – be deliberate about creating a positive, healthy, supportive culture in your nonprofit. Your staff, board, clients, donors and overall productivity will be better for it.
On Gardens & Donors: Great Relationships Take Work!
I spent last weekend outside in my back yard, toiling in my garden and getting it ready for spring and summer planting. The front of my home is completely xeriscaped and filled with beautiful yet intimidating agave, cacti and succulents. From this vantage point you’d never know that there’s a small but productive vegetable and herb garden out back that helps nourish my family year-round. Nothing brings me more joy than the seasonal cycle of cultivating and harvesting the fruits of my own labor. Unlike many home gardeners I know, I plant from seed instead of transplants because I want to be part of every stage of the growing process. I love the way the soil feels in my hands which is why I stubbornly refuse to wear gloves despite owning more pair than I can count. I prefer hand watering because it allows me to conserve by giving the thirstier plants what they need without overwatering the rest. It also gives me time to think, which is the other part of gardening that brings me so much pleasure. I consider my garden an important part of my personal ecosystem, one that I must work to nurture in order to be rewarded with the food that graces my table. Just because I put seeds in the ground and water them doesn’t mean that the vegetables will magically appear. If I haven’t done my part to prepare the soil and make sure I’m planting my seeds at the appropriate time of year, my results will be spotty at best. If I fail to be attentive to pests and other issues that can arise during the growing process, I could end up with an aphid or beetle infestation that could ruin the whole plot. But when I amend my soil between seasons, rotate crops, and stay attentive to pests, the results amaze me each and every year. When I think of all the work that goes into keeping my garden healthy and productive, it’s an easy comparison to the fundraising and donor relations work I’ve done for the past twenty years. Those of us who focus on the philanthropy part of nonprofit businesses understand that more than anything, we are in the relationship business. And, just like the relationship I have with my garden, donor relationships are only as good as the time and effort we put into them. If we don’t do the work to build relationships of care, trust and accountability with our donors, we cannot expect them to reward our organizations with their generosity. If we do a poor job nurturing and managing these relationships, the fundamental missions of our organizations and the client bases we serve will suffer. But when we do our jobs well, the results and impacts are fantastic. Cultivating strong donor relationships takes creativity and flexibility. There is no exact formula for doing it right, but a general rule of thumb is that good donor cultivation arises naturally from good nonprofit management. Here are a few fundamentals to illustrate what I mean: Engagement. Engaging donors can take a variety of forms, including but not limited to regular communication, special events, face-to-face meetings, etc. Telling your organization’s story is important for its overall brand recognition and visibility, so regular and consistent communication to your surrounding community is just one component of good nonprofit management. This outward-facing communication can take the form of digital newsletters, social media outreach, email campaigns and even special events. Broad community engagement, along with strategic communication and outreach focused on current and potential donors not only builds overall awareness but also helps establish reputation and trust with existing and potential donors. And as I’ve written before, trust is key to creating lasting donor relationships. So, find creative ways to communicate and engage your donors. I know you’re busy with other things, but trust me…this is worth your time. Transparency. Another important way to build awareness and trust in your organization is through openness and transparency. Most nonprofit leaders already understand that the IRS mandates at least some level of fiscal transparency to the public. What often gets neglected, however, is the personal touch that nonprofits can offer donors through deeper transparency and focused reporting. Donors give to nonprofits because they believe in the mission and want to make an impact. But if we don’t show and tell our donors how their gifts were used and the impact they have made with their philanthropy, we can’t expect them to continue giving. Transparency is really an offshoot of engagement, as it’s a deeper method for nonprofits to share their stories. Some nonprofits choose to take a formal approach to transparency through the creation of glossy annual reports or impact reports. Other nonprofit leaders take a more informal approach by carving time out each month to call donors and share information with them. I advocate for a solid hybrid of these two approaches, because I’ve found that most donors appreciate both formal and informal communications about their impact. Flexibility. Always remember that every donor is different and should be treated as such. Building strong relationships is impossible with a cookie-cutter approach. Not all donors are interested in attending your events. Not every donor wants to read your monthly newsletter. Some donors only want to see your annual audited financial statements. Other donors only want to hear about how their funding helped the organization. I have closed some of the largest gifts of my career by taking the time to truly get to know the donors I work with. By paying attention and getting to know my constituents as human beings, I can be agile in my approach and develop more impactful cultivation plans. And, impactful cultivation leads to impactful gifts. The moral of the story…. Don’t get me wrong. Donors are not plants. But just like the relationship I’ve cultivated over the years with my veggie garden, good donor relationships can be so fulfilling and rewarding, year after year. And, like the vegetables that I so
Yep…That’s Your Job, Too.
What did your road to executive directorship look like? Where did it begin? Did you start as a staffer and work your way up? Were you recruited from a different sector, and what made you decide to make the jump to nonprofits? Do you feel like you started the E.D. role with all the skills you needed, or did you figure it out along the way? I am an inquisitive soul and I tend to ask a LOT of questions. These are just a few that I’ve asked nonprofit leaders in my network over the years. The answers are always different, the stories entertaining, and there are always lessons learned and shared. The truth is, there is no single path to becoming the leader of a nonprofit organization. Whatever the path, there is also single “right way” to be an executive director. But there are some very real responsibilities that every nonprofit leader must be equipped to handle. In my professional experience, the executive director (or CEO, or whatever the head honcho is called in your organization) is not just the person with the largest office in the building…the executive director is the person with a neck strong enough to wear all of these hats simultaneously: 1. Chief Leader — the executive director is the person with whom the buck stops. While the Board of Directors role is to establish the organization’s vision, priorities and policies, the Executive Director is the person whose job is to lead the organization in implementing the Board’s vision. This person is the face of the nonprofit and therefore must be able to communicate the mission, goals, and programs to staff, clients, donors and the general public. There is a very real difference between leading and managing, but we’ll talk about that another time. Suffice to say that I believe the most effective E.D.’s lead their organizations as opposed to simply managing. 2. Principal Staff Developer — as the chief leader of the organization, the Executive Director plays a huge role in the success (or failure) of his/her team. The E.D. that doesn’t take this responsibility seriously is likely to suffer problems with staff retention, turnover, productivity and organizational outcomes. The E.D. that understands this role does his/her best to ensure that staff are onboarded effectively and that they receive the tools and professional development opportunities they need to be successful. My favorite thing about managing staff is helping them grow and celebrating their success. Also, if you are an E.D. who is not thinking about who will take your place when you leave the organization, please step into my office because we really need to talk… 3. Primary Board Partner — one of the most important (and often overlooked) roles that an executive director plays is nurturing a strong partnership with the organization’s board of directors. I’ve previously written about the nonprofit board as ethically, fiscally, and legally responsible for everything the organization does. A strong E.D. never loses sight of the board’s role and takes steps to ensure that the board remains confident in the E.D.’s commitment and ability to effectively carry out their vision. 4. Overseer of Operational & Fiscal Compliance — have I mentioned that a nonprofit is a business? Surely I’ve said it before. The executive director must work to ensure that the organization is operating in compliance with all applicable federal and state laws and regulations. Doing this requires knowledge and understanding of the operational systems needed to keep the organization running above-board. The E.D. also typically submits an annual operating budget to the board for approval, which requires a keen understanding of the organization’s financial standing, including knowing how to read financial statements and prioritize organizational needs in relation to how much money is in the bank. 5. Head Fundraiser — the executive director is the organization’s primary fundraiser. I have seen some E.D.’s try to pawn this duty off to board members or other staff because they are uncomfortable asking for money. I will only say, please get over it….immediately. Part of this is leading by example. How can an E.D. expect their board members to support the organization with their own money and by bringing other funding opportunities to the table if they are not out doing the same thing. And, if you are a nonprofit E.D. who doesn’t donate to your own organization, please step into my office… 6. Top Constituent Relations Representative — Oh, so you want to hire a marketing professional to do this part for you? Not so fast. That’s your job, too. The executive director should build and maintain relationships with a wide variety of parties in order to help their own organizations succeed. You can’t be “the face” of an organization and then run and hide behind your marketing team. The E.D. should be everywhere — figuratively, not literally — by communicating regularly and in a variety of ways with constituents (email, newsletters, social media, website, public events, etc.) Depending on the size of your nonprofit organization, there may be components of some of these responsibilities that you delegate to a trusted member of your management team. However, in many small and mid-sized nonprofit organizations, the executive director must be ready to handle all these things, and also be ready to roll his/her sleeves up at any given moment to help out with programs if needed. This is what you signed up for, right? Right! The job of an executive director is large, complicated, and hugely important to the overall success of a nonprofit organization. Doing it well is difficult, stressful, but can also be extremely rewarding. Whether you are a new or experienced executive director, I encourage you embrace the challenges, weather the difficult times, nurture your board, support your staff, and remember to stop and celebrate your organization’s successes.
When Grant Funding is Problematic
Grant funding is often the primary source of operational and/or programmatic revenue for a nonprofit organization. Whether from government or non-governmental sources, grants are integral to a nonprofit’s survival. Executive directors and grant writing professionals can spend many hours researching and writing grants with varying degrees of success. For organizations that are just starting out in the grant writing arena, it can be a daunting and sometimes frustrating cycle of applications and denials with limited positive results. However, the time and energy it takes to pursue grant opportunities is well worth the effort when a major grant is finally won. The best positioned nonprofits are those with well-seasoned grant writing professionals who dedicate their time to researching and pursuing opportunities. Unfortunately, most organizations can’t afford full-time grant professionals, so grant seeking becomes one of the many responsibilities of the organization’s director. Regardless of who is responsible for grant seeking in a nonprofit, the pursuit of grants should follow the overall strategic plan and priorities of the organization. As time consuming as the grants process is, it is imperative that this time is spent pursuing funding that will help the organization and support its mission and programs. This sounds easy, right? Well, sometimes it’s not easy at all. I’ve written before about “mission creep” because it’s a real danger, especially to the under-resourced nonprofit. In relation to grants and other funding, mission creep happens when the stated purposes and priorities of a grant funder are misaligned with the mission and priorities of the nonprofit grant seeker. When mission creep sets in, funding sources dictate the organization’s direction instead of the organization’s direction informing the types and sources of funding being sought. A minor programmatic shift to align with a funding opportunity may not seem like a bad thing at first – particularly when the shift is rewarded with funding. However, any modifications that are guided by the pursuit of funding, as opposed to the organization’s strategic plan, can (and often do) have lasting detrimental results. The truth is, all money is not good money for an organization. And, any strong nonprofit leader will share stories of times when they have said “no” to a funding opportunity because the costs to the organization outweighed the benefits of the grant or gift. }It’s true….it can certainly feel counterintuitive to walk away from a grant opportunity, especially as funding for many nonprofit industries (the arts, for example) continues to dry up. However, by keeping the organization’s mission and strategic priorities front of mind, the pursuit of grant funding will become less daunting and more impactful in the long run. So, before you sit down and start writing that next grant, take a moment to consider it in relation to your strategic plan. If it is well aligned, the grant will help you expand something you’ve already planned to expand, grow something you’ve already planned to grow, or create something you’ve already planned to create. That is what grants are supposed to do!
On Trust…
I recently read an article in the Chronicle of Philanthropy entitled “To Keep People Giving in the Pandemic, Trust in Nonprofits is Essential” (Segar, B., 2020). I won’t go into detail about the article’s arguments because the title sums up my thoughts perfectly: a nonprofit’s fundraising success is built upon a foundation of trust, and without that trust, the organization’s long-term financial sustainability will suffer. Each day, nonprofit leaders work hard to attract and retain funding. If they’re savvy fundraisers, these leaders seek a broad range of support — from individual donors, from corporate partners, and from private foundations as well. They tell heartfelt stories about their missions, the people they serve and the differences they make in their communities. With a good mix of skill and luck, the funding arrives and the organization is able to sustain its work for another year. But, regardless of a nonprofit leader’s story telling abilities, and regardless of a donors’ affinity, wealth, or interest, donors must have a measure of trust in the organization and the people leading it in order for gifts to become reality. Trust is the reason a nonprofit board delegates authority to its executive director to oversee the organization’s daily operations. It is the reason that I’m always preaching about the importance of nonprofits being open and transparent in communicating with their donors. And trust is the reason nonprofits should value every gift they receive, as the people or entities making these gifts do so because they trust our organizations to be good stewards of their contributions. It is a responsibility that I have taken very seriously in each role I’ve held in my twenty year nonprofit career. In the coming year, my greatest wish for my friends in the nonprofit sector is that we continue nurturing relationships of trust with our existing donor bases and make positive strides to establish relationships with new donors. I use the word “relationship” intentionally, as good philanthropy is not a transactional business. Transactions are fickle; we should aim to sustain. Be open, be honest, build trust, and the gifts will come.