Sustaining Your Nonprofit’s Executive Director

It is critical that members of your nonprofit organization – including staff, volunteers and the board of directors – have defined ways in which to sustain the executive director’s role to ensure maximum performance efficiency, and continuity for the organization.  Being an executive director for a nonprofit is not a job Brawny can fix nor is it for the faint of heart. If one is an executive director for an organization they started from the ground up – which places them in the dual role of E.D. and Founder – then the job’s duties intensify because that person is a leader for both programming and policy. If this person is hired into the role, on the other hand, then they inherit a host of organizational traditions that are now under their command for execution and possibly reform. In either case, the cross that they bear is not a light one.

Right now the average length of employment for an executive director is about 18 months, which is a dangerously short term for someone who provides the pinnacle of productivity and continuity for your nonprofit. This is mainly because they tend to be over-tasked, under-supported, and resource-deficient. Below are 5 tips to sustaining your executive director and increasing the effectiveness of your leader.

1.      Hire an E.D. with the “right stuff,” right out of the gate.

Every executive director MUST have demonstrated proficiency in the following areas:

  • Sales and Marketing – Because they will be the selling voice and face of the organization, it is required that they possess an excellent ability to “pitch and nail and sale,” and articulate the organization in a manner that is creative and increases its marketability. 
  • Finance and Budgeting – They have got to be on top of the numbers! Income and expense management are keys to the success of the organization. 
  • People skills – Executive Directors have to balance the delicate art of being bold but not too aggressive. They report and listen to boards, managers, donors and others within and outside the organization, each having their own agenda.  So strong leadership is critical, and stepping on toes can be devastating. Balance!

Don’t settle for second best.  If you don’t have an E.D. right now, or need an immediate successor, put a huge amount of your organization’s energy into really defining that role and finding the right person.  This role is too important to hope for the best.

2.     Don’t feed them to the wolves. Feed YOUR wolf.

I totally get that you hired this person and they have all the great skills listed above, but those skills will only exist in theory if your newly appointed “wolf” isn’t provided with a team to support them. In most cases, the board of directors hires an E.D., which means there are at least a handful of people that can support an E.D. in their role. Establish committees in each of the major areas in which your E.D.’s functions (e.g. Programming, Budgeting, Staffing and Volunteers), and have board members chair the committees and recruit volunteers to staff the committees. I understand this structure might be harder for smaller organizations where the E.D. is the founder and the board is underdeveloped, in which case I strongly suggest an investment is made to contract outside sources/consultants to help balance the weight.

Side Note 1: If your board of directors is in proper accordance with governance, then there should be a great deal of fiscal responsibility on the board to support a livable wage for your E.D.  One of the primary responsibilities of a board is to ensure that your organization is fiscally sound, no matter whether your nonprofit is small or large.

Side Note 2:  For smaller nonprofits, strong board support to the E.D. in programming can be fundamental to the longevity and success of the organization.  However, the larger your organization becomes, the more urgent it becomes to consider a Policy Governance model.  This model strictly limits the board’s involvement in programming; the board is responsible for defining goals and constraints for the E.D. but then leaves all operational decisions to the E.D., which provides a healthy balance of direction and leeway to the E.D.  Consider where your nonprofit is in this continuum.

3.     If you can’t pay them well, have some really kick-butt benefits and incentives.

For new nonprofits – organizations under five years old – it’s understandable that the money just isn’t there for healthy salaries. However, presumed financial sacrifice can no longer be part of the nonprofit business model if we want to attract and retain talented executives. The too-often lauded psychological rewards of nonprofit work cannot substitute for decent pay and reasonable working hours, not in the long run. If it is not possible to pay decently, look to your constituency via gifts in-kind and board members to brainstorm ways your E.D. can be compensated in lieu of a comparable wage. Use of a car, a monthly mass-transit card, meals at a sponsoring local restaurant, and sponsored child-care or tutoring for their children are all meaningful possibilities.

Side Note:  If you only have the budget to accommodate one paid position, I strongly suggest you take that number and split it between an E.D. and a development person, which places focused emphasis for your organization on development, and simultaneously takes some burden off your executive director.   

4.     Succession plan. Don’t bolt your E.D. to her job.

An underlying purpose of any position, I imagine, is to develop people. Understand that, though an organization employs with longevity in mind, as the organization grows and its mission evolves, so do its staff, board, and constituency. All executive directors should periodically ask themselves whether they are still the right person for the job and how their continuing leadership affects the organization’s ability to attract and retain talented staff and build future leadership. Thoughtful succession planning doesn’t necessarily mean hand-picking and grooming a successor, though it can. However, it always means putting in place contingency plans in the event of an unplanned leadership turnover as well as planning for an eventual departure, whether it is imminent or far off.

5.     Say thank you often and in many different ways.

Similar to cultivating your donors and caring for your volunteers, the same effort should be put into sustaining your E.D.  Consider gift cards, thank you cards, quirky awards, a staff appreciation party and other recognition.  Frequent acknowledgement of accomplishments is always a great investment in your organization, and support for the Executive Director.

Good executive directors work diligently to see that the organization fulfills its mission effectively and efficiently. If they are to succeed, we know they need to represent each of the different parts of the organization at different times. We know they need to be the person driven to meet programming needs and committed to seeing that the organization stays in balance. And equal to all of this, they need to know that (a) they are not alone, (b) this position will push them deeper into their personal and professional futures as leaders, and (c) their skill-set won’t be taken for granted.  And “we” – whether we are board, staff, volunteers, funders or outside support – recognizing the life-critical role that the E.D. plays for our nonprofit, have to take it on ourselves to give this to the Executive Director.

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Getting and keeping your 501(c)(3) status

Every day thousands of individuals submit applications to the IRS requesting tax

Kerline

Kerline Astre, Co-founder, NonProfit, MD

exemption for their organization. And every day many are given the OK to move forward on their aspirations of becoming a successful, legally recognized non-profit. While this may be true for some, it is not the case for many. There are some basic things you need to know and do, before and while you execute items on your grand checklist of becoming a nonprofit.


First, what exactly is a 501(c)(3) organization?

Simply put, a 501(c)(3) organization is a type of nonprofit corporation classified by the IRS as either a “public charity” or a “private foundation,” and whose mission determines that it will be exempt from some federal taxes. Within those two broad categories, a 501(c)(3) is further designated as one or more of the following:Religious;Educational;Charitable; Scientific; Literary;Testing for Public Safety;Fostering National or International Amateur Sports Competitions; or Promoting the Prevention of Cruelty to Children or Animals.

Side Note: Actually, there are about 32 different types of exempt statuses, of which 501(c)(3) is just one. Refer to the following chart to make sure you are applying for the right status for what you are trying to achieve: http://bit.ly/hhG8zO.


What distinguishes nonprofits from for-profits is not whether or not they can make a profit, or surplus income, but rather what is done with any profit. Nonprofit organizations cannot exist to earn money for owners or stakeholders; distribution of profits is strictly prohibited, and must be re-invested in the organization to further its mission.


What’s the Application like?

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Incorporating Your Non-Profit

NonProfit, M.D. is often asked about incorporation.  Frankly put, choosing to start a non-profit organization is not a light undertaking. There are many websites and online postings that read, “Start a non-profit in 30 days for just $199” or “We do 501c3’s and it’s as easy as 1-2-3”. The honest fact of the matter is that there are a host of other matters to consider that come with a sturdy list of to-do’s and to-don’ts. And top of that list is filing your Articles of Incorporation. Here are three FAQ’s associated with incorporating.

 1.      What is incorporation?

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So you want to start a Nonprofit? (Part 2)

Kerline

Kerline Astre

NonProfit, M.D.’s last article, “So you want to start a Nonprofit, Part 1,” addressed some ‘heart’ questions about what your main motivation is for wanting to start a nonprofit, and whether you had the hankering for being an entrepreneur.  Then we added three more questions centered on tax, legal and financial status, and whether there were other efforts already out there that had a similar aim as your idea.  This article, Part 2, focuses on three more areas of organizational structure:

  • Governance (you know, the Board!),
  • Programs (like, what services are we really providing!),
  • Central Administration (Are we gonna have staff?).

These are some of the harder questions to get your arms around.  Here are some thoughts on each:

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So you want to start a Nonprofit? (Part 1)

uzomaka

Uzomaka Obiocha, NonProfit MD Co-founder

So….you want to start a Nonprofit? You want to do your part to create the change you would like to see in the world. You want to create programs and systems that will help and protect people/animals/the environment/ideas. Good luck my friends!

Here are five initial points to consider:

1. Be Clear About Your Motivation

Though there are many similarities between a nonprofit business and a for profit business, there are also distinct differences. Be very clear with yourself: is your main motivation the “mission” or the “money”?  If you say “mission”, be clear that that can limit the amount of money you take out of the business for your own purposes, it determines the incorporation and tax-exemption processes you will have to go through, and it can determine what kind of language you use to talk to your stakeholders (e.g. funding vs. investors, staff/volunteers vs. employees, 990 vs. 1040 tax forms, sustainability vs. return on investment, etc.)

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