I recently made a contribution to the Zebra Coalition in tribute of someone who is going through a rough time. Shortly after sending the contribution, I received the card pictured above. There's so much I like about the envelope alone:
Before opening the envelope, I expected to find a handwritten note from their executive director. Instead I found something even better:
This is among the most personal thank you cards I have received this year! Great idea, well executed!
Almost every executive director I know wants an employment contract, but the vast majority of boards are reluctant to give their executive directors a contract.
You may ask “How does Dolph know this?” The answer is simple: Board Source’s 2017 Leading With Intent report indicates that only 31% of executive directors actually have one.
Let me be clear that I have a strong opinion about this - - - I believe any organization that cares about stability and continuity should have an employment contract with their chief executive. If you are an executive director reading this, I am preaching to the choir. If you serve on a board that is reluctant to give the chief executive a contract, however, this post is for you.
Let’s start by exploring some of the pros and cons of offering your executive director an employment contract. Before I present these, however, let me remind readers that I am not a lawyer or accountant and am not providing legal, tax or accounting advice. If your organization is going to consider a contract for your executive director, it should definitely secure legal counsel.
The table below outlines the five advantages and three disadvantages of an executive director contract:
I believe there are five (and one more) potential advantages of an executive director contract:
In exchange for this, however, boards often get a commitment of an equal amount of notice from the executive director should they want to leave.
Boards will often ask me, “but what stops the executive director from giving us just a month’s notice instead of three months’ notice as outlined in a potential agreement?” Several things do:
(a) the chief executive cares about their professional reputation and
(b) the CEO may lose vacation payouts or other incentives if they don’t give sufficient notice
(c) contracts are enforceable in court; no executive director wants a possible legal battle hanging over their heads while starting another job.
I primarily hear three board arguments against offering a contract. Since I’ve disclosed a bias toward chief executive agreements, I will share the most common board arguments and offer a counterpoint.
As you can see, I am not agnostic when it comes to contracts. I believe they are important to a healthy relationship between the executive director and board, and they dramatically reduce the likelihood of needing to utilize your abrupt transition strategies.
Back when I was a permanent executive director, I found my employment contract to be an incredibly helpful tool. In my last chief executive role, I never felt like the job was a great fit – even though we grew the budget by 25% during the great recession and expanded the organization’s footprint from 28 counties to 42 counties. I gently brought my concern up to the board chair, suggesting that I might not be the right person to lead the organization. While the board didn’t want me to leave, I timed my departure with the end of my contract. I left the organization feeling good about the work I had done and knowing that I fulfilled my obligations to the organization. They had the benefit of ten months’ notice. It was definitely a win-win.
Now that we’ve covered the importance of contracts – and I’ve got that off my chest – our next blog post in this series will be a deep dive on developing your interim plan. It will help you create a plan for how you will actually run the organization without a permanent executive director at the helm.
Sally has enjoyed a successful six-year tenure with her organization, but she’s ready to take on new challenges. Over coffee with her board chair, Sally shares that she is looking for a new position and anticipates leaving in the next three to six months. The board chair thanks Sally for her candor and for significant advanced notice that allows the organization to prepare for the transition.
This is a board’s dream – an executive who has decided to resign and even plans for her own departure without another job lined up. But it is also a day dream that rarely comes true. Unless they are retiring, it is both unreasonable and unrealistic to expect that an executive will set a date to resign without having another job offer. After all, the chief executive’s job is also how they provide for themselves and their family.
When creating a succession plan, the board needs to prepare for the four types of transitions described below:
Short Term Absences: A short-term absence has definite beginning and ending dates, and the length typically ranges between one to six months.
Permanent Departure: A permanent departure – sometimes called a defined departure, is the resignation, termination, or retirement of the executive director.
Abrupt Departure: In my world view, an abrupt departure is any exit with less than a month’s notice, though only having one month to prepare for the departure of your executive director is not a lot of time.
Planned Departure: A planned departure is one with between one and nine months’ notice. As a general rule, I don’t suggest that an executive director announce their departure more than nine months in advance simply because chief executives do start to become lame ducks during the transition period. I know this from personal experience because I once gave ten months’ notice before leaving an executive director position. During my final few months, it was clear that the board, staff and funders were postponing big decisions until the next chief executive director started.
In drafting the departure section of your plan, your organization will have a lot of questions to consider, including:
In a future bonus break, we’ll talk about actually developing your interim plan to manage the period with an executive director. But the next post will be a good opportunity for us to discuss executive director contracts and the role they play in transition planning.
About the Author:
Read Dolph Ward Goldenburg's Bio
This spring I launched a wildly popular blog series about strategic planning, which has been among our most read blog posts. Reader feedback was clear: provide useful information in bite-sized chunks that will help us understand and begin important projects. For this reason, I’m offering a second blog series to help your organization begin transition planning.
I recently ran into a board member of a prominent local housing nonprofit whose executive director had resigned after just a couple years in the position. The board member shared that, “Our board was caught completely off guard because we didn’t know she had planned to move to another state.”
Far too many organizations don’t start to plan for leadership succession until their executive director gives notice. In fact, nearly all nonprofit literature and research indicates that the vast majority organizations are unprepared for an executive transition. Boardable’s recent research outlined in The Wakeup Call, for example, indicates that over 77% of organizations lack a transition plan.
With the length of executive tenure declining, the coming wave of retiring executives, and the burn-out rate for first time executive directors, failure to have a transition plan in place is a risky and dangerous.
As the first post in this blog series, we are starting with the basics by defining a transition plan and explaining why they are important.
What is a transition Plan?
A transition plan, sometimes called a succession plan, is a written document the board develops and uses to ensure continued operations and a smooth transition in the event of a planned or unplanned extended absence or departure of the executive director. Good plans are well documented so that interim leadership or new permanent executive could pick up the plan and have a clear sense of how to manage the organization or department.
Transition planning is essentially risk management and contingency planning rolled into one. Planning requires that the organization identify the various types of vacancies or departures and create sub-plans around them. It also requires that the daily, weekly, monthly, quarterly, and annual tasks of the executive are fully documented. This will enable the organization to ensure all essential tasks occur in the event of a short term or long term absence.
Why should my organization have a transition plan?
Transition plans are important regardless of an organization’s staff size or total revenue, but succession planning is especially important in small and medium-size organizations, where the executive director wears multiple hats. A director running an organization with a staff of four, for example, may need to process payroll, submit a grant proposal, attend a coalition meeting, and make a key decision about employee benefits all on the same day or week.
If this fictional executive director were to enter the witness protection program and disappear without a trace, the organization would likely scramble to process payroll (I can hear the treasurer asking – What payroll service do we use? How do I convince them I represent the organization?); miss the grant proposal deadline; fail to attend the coalition meeting; and stick their employees with the same crappy health insurance next year.
While larger organizations may have more executives with institutional memory, they need to create transition plans for their executive director and each member of the management team. Because “larger” means more complex, the directors of finance, programs, and development all possess information that must be transferred to their successors.
Next Post in the Series
Next week’s blog post will identify and define the four types of transitions your succession plan should include.
Having served in multiple paid and volunteer roles in the not for profit sector, I developed a deep appreciation for the board treasurer.
As an executive director, I always valued the treasurers who helped me focus on internal controls and future forecasting. They could review the financial statements and cash flow projections with a “fresh eye” and point out some issues that I had not identified. Answering their questions or explaining an issue would often require “extra work” from me, but it was usually well worth my efforts.
As a board chair, I sought to work with treasurers who didn’t just report what happened in the past by presenting the income and expense statement. I wanted a treasurer to serve as the board’s eyes and ears in our finance department and be a leader who would sound alarm bells if there were issues with internal controls.
Over time, I learned that a great treasurer is not only essential for a strong organization but also builds trust with donors, funders, and the broader community. I also learned that great treasurers share these six traits:
#1: Great Treasurers Dive Into the Numbers
A great treasurer doesn’t just look at the bottom line on the income and expense statement (sometimes called a profit and loss statement). Instead, they really comb through financial statements to identify trends and determine the organization’s financial health. Great treasurers will typically compare the actual YTD financials with budget projections and the same period for the prior year.
When great treasurers finish reviewing the income and expense statement, they turn their attention to the balance sheet, accounts receivable, accounts payable, and cash flow projections. They seek to fully understand the organization’s financial health by fully understanding these financial statements.
And the very best treasurers also ask to review the bank statements!
#2: Great Treasurers Ask Hard Questions
While none of us like to be in the hot seat, great treasurers ask executive directors and CFOs hard questions (diplomatically, of course). After all, it’s not unusual for management’s projections to be optimistic, and great treasurers sometimes offer a reality check for management.
Great treasurers may dig deeper to find out why a revenue line item is below budget or an expense line item is significantly over budget. They also ask tough questions about receivables and the cash flow projection. A few questions that great treasurers have asked me include:
#3: Great Treasurers Take the Audit and 990 Seriously
Great treasurers understand that an auditor’s review of the organization’s financials will be more thorough than the Finance Committee’s periodic reviews. Consequently, they will work with the audit committee (or finance committee) to carefully select the auditor, considering their experience and expertise. As part of an audit committee, they will also meet with the auditor before the engagement and share any questions they hope the audit will resolve. They will also meet with the auditor at the completion of the audit, and ask lots of questions about any weaknesses, deficiencies and recommendations the auditor may have included in the letter to the board.
Great treasurers will also ask management to give the finance committee regular updates on resolving any weaknesses or deficiencies noted by the auditor.
#4: Great Treasurers Care Deeply About Risk Management
Great treasurers understand that risk comes in many forms (such as potential staff malfeasance, executive transitions, lawsuits, storms, looming recessions, etc), and they work with management to ensure these risks are managed appropriately.
An organization’s internal controls are among the best ways to manage the risk of staff malfeasance and executive transitions. Great treasurers understand the importance of producing written financial procedures and ensuring they are followed. These procedures not only make it easier to detect possible malfeasance, but they also provide a training tool when accounting or executive staff change.
As part of managing risk, great treasurers also ensure that the organization reviews its insurance policies at least annually and determines if the organization is adequately covered.
#5: Great Treasurers Focuses on the Future
Most treasurers understand the importance of reviewing past financial performance (the income and expense statement), but great treasurers are focused on the future. They will, for example:
#6: Great Treasurers Make Their Own Board Report
Great treasurers have sufficient familiarity with the organization’s financial statements, budgets, and internal controls to give the finance report at the board meeting, and they don’t delegate this important task to the CFO or executive director.
I have been lucky to serve with some truly great treasurers, and they have always made the organization stronger and helped me improve as a professional or a board member. I’ve also worked with a few underperforming treasurers, and my next blog post will share traits of underperforming treasurers.
Last month I was speaking with an executive director who shared that he hadn’t taken a full week off in over 18 months. I’m certain that I cringed when he said this despite my best attempt to have no observable reaction.
All too often we are so busy taking care of our organizations and our families that we fail to take care of ourselves. As months of continuous work stretches into years, passion and zeal slowly drain from us and we begin to resent our work. I learned the hard way this fact the hard way; In fact, I used to be one of those people who never took a vacation, then I burned out pretty bad.
Since experiencing my own severe career burn out, I now take at least one extended trip every year where I completely unplug from work – no email, no voice mail, no check-ins.
When I ask someone why they haven’t taken a vacation, it normally comes down to two factors: Some say they can’t afford to lose the time at work; Others say they don’t have the financial resources to take a trip; and a few say they can afford neither the time nor the cost.
If this sounds like you; If it’s been more than 12 months since you’ve taken a real vacation without working or checking email, then this bonus break is for you. I’m going to share some ideas about finding the time and the resources necessary to give yourself a break.
#1: Pick a Date
It’s always easier to plan your trip at least a few months in advance; In fact, My husband and I plan our big trip where we unplug from the world and reconnect to each other about a year in advance.
So the first step to actually taking a vacation is to pick a date in the future and lock your vacation plan in. Once it’s on the calendar, tell your friends, family, work team, and board or boss that you’ll be unavailable during that time. With enough lead time, you can start to figure out how everything will get taken care of without you; They might be work-related like “who will be trained to process payroll” or it might be personal like “who will visit Mom at the nursing home on Saturday night”.
Most important – you have to plan around the trip and protect your vacation dates. A few months before your trip just gently remind people in meetings and conversations when you will be unavailable. Since not everyone at your office is going on vacation with you, people will suggest planning meetings or events when you are on vacation. When this happens, don’t feel like you have to cancel your trip. Instead say, “That sounds like a really important , and I wish I could be there. But I’m scheduled to go to on this amazing trip. During one-on-one check-ins with your supervisor or those who report to you, also remind them of an upcoming trip. Since it’s not their vacation, it’s easy for them to forget you have planned one.
Finally, I would also recommend not scheduling anything the day before you leave or the day you return; This will enable you to have a lot less stress on both ends of your trip.
#2: Book your tickets
Back in February, my husband and I decided to take our annual trip to Morocco around Thanksgiving because it would only cost him 8 vacation days (Tgiving and the day after are holidays at his office). So we bought our plane tickets in March as soon as he confirmed with his office that he take the time off. That’s right, we purchased tickets a a full eight-months in advance because buying a ticket is a commitment device.
Tickets might have gotten cheaper in a couple months, but buying the tickets is a commitment device. Once we spent money on tickets, we are far more likely to protect the days we’ve chosen from being eaten up by other responsibilities.
Now we haven’t booked a hotel or planned other activities, but I know we will go to Morocco and have a great time. Do you know why? Because we bought our tickets.
#3: Get creative with finances
The other primary reason that people don’t take vacations is their personal finances. I’ve been fortunate to take some very expensive trips and also some very inexpensive ones. So let me share my tips and tricks for very inexpensive vacations:
Save on lodging:
For many people, the number one trip expense is lodging but it doesn’t have to eat your entire budget.
If you have kids:
With a bit of planning and some creativity, you can break through whatever barriers are preventing you from going on vacation. But most importantly get the f**k out of your office and your city; reconnect with yourself and the person you love the most; and enjoy life for a bit.
Essentially, you can brand any item. With so many choices, how could you choose? It’s best that you consider what items are consistent with your nonprofit mission. For example, if your nonprofit focuses on increasing education for youth of vulnerable populations, it might distribute branded backpacks. Below are examples of unique and exciting branded items that may be consistent with many organizations’ missions.
Under each description, click on the link to get prices on the described branded item from my trusted brand provider, ZippyDogs. While we recommend you buy from ZippyDogs, we don’t receive any payment from them when you do. We just have mad-respect for this women-owned business.
Ultimately, branded items should be consistent with your organization’s mission. Thus, when deciding on which branded items to use, think of how you can engage your donors by creatively materializing your mission. It is very easy to do this when you think of branded items as your organization’s accessories.
Giving your staff, volunteers, or board members branded items builds team spirit which further helps each person be a brand ambassador for the organization. For example, distinguish accomplishments and anniversaries of your staff, volunteers, and board members with branded items. Unify your organization by using branded items to celebrate a milestone, complement a tradition, or enhance an event.
Below are branded items that could help any work environment build team spirit.
Distributing branded items is an essential component of outreach, marketing, and team building efforts. Many successful nonprofits distribute branded items to creatively cultivate donors when you find the right balance between price, uniqueness, usefulness and quality.
Each item signifies the bond between your organization and your donor. Branded items allow your organization to deliver customized gifts to donors that can’t be found elsewhere, and this limited accessibility tells each donor how sincerely you value their time, efforts, and loyalty. Also, branded items are great for rewarding and recognizing your team.
Top reasons to use branded items:
If you are still uninspired about branded items, listen to author of Dollar Dash, Otis Fulton, who explains the role of branded items in peer to peer fundraising. In our next blog post, we will review ways to use branded items to build team cohesion with your staff, board, and volunteers.
About the Author:
Read Brianna Ohonba's Bio
Since we just finished up our Strategic Planning series last week, I thought it might be worthwhile to explore the questions you should ask a consultant.
Whether your nonprofit is about to begin strategic planning, board development, or some other major project, choosing the right consultant will be your most important decision. For this reason, it is crucial to thoroughly screen prospective consultants and choose the one you believe will best position your organization for future success.
For this reason, I offer 14 interview questions that will help ensure you find a good consultant in your local market:
Your team has an open position, and you are responsible for filling that position with the right candidate. Like all hiring managers you receive a flood of resumes from interested candidates after you advertise the position on Idealist, Philanthropy.com, or one of the other nonprofit job sites.
Of course, about half of the applicants aren’t qualified for the position and are easy to remove from consideration. Examples of dead weight candidates who are easy to eliminate include:
Even after eliminating candidates the dead weight candidates, you will likely still have a dozen or more candidates who appear qualified. Occasionally, however, none of these candidates will impress you. They seem “okay” but not a perfect fit for the position or the organization.
You now face the age-old question: do you hire the “best candidate” who is not a perfect fit or leave the position open?
As a supervisor, I’ve been in this position multiple times and can attribute my biggest failures and successes as a manager to my decision at this point.
When it comes time to make this decision, there is a lot of pressure to settle for the candidate that seems sufficient but not stellar. A few of these pressure points include:
It’s human nature to take action that makes our pain go away, so the easy “solution” is to hire the candidate who is sufficient but not a good fit. This solution is only easier for the short term, however, and the decision actually causes us more pain in the future. Here’s how:
I have learned the hard way that it is better to leave a position unfilled and continue looking for the right candidate. Of course, I often need to double my recruitment efforts to find good candidates for the position the second time. This may include:
While the position remains unfilled, you and your team will feel pressure from the pain points outlined earlier in this post. There are a few ways to decrease the short-term pain, though many of them require long-term planning:
Leaving a position vacant can be a tough call, and you will feel pressure to fill the position quickly. It’s always better, however, to say “We can’t take the next step in this initiative/program/organization until we fill the position responsible for its achievement.”
When you feel the pressure from direct reports, subordinates, and supervisors, repeat this mantra “Our long-term success depends on finding the right candidate for this position.” Trust me, you will always regret attempting to move the initiative or program forward with the wrong candidate.
As an aside, I think the philosophy “an empty seat is better than a bad hire” also applies to the Board of Directors. Don’t fill a board seat just because “we have a vacancy and this person is better than the others we’ve interviewed.”