The Trinity of Nonprofit CEO Success: Talent, Donors and Finances
In my daily interactions with nonprofit CEOs, I am struck by how quickly the expectations for the role are evolving. During my time as a nonprofit CEO, nearly 10 years ago, I was acutely aware that my duties had progressed beyond those carried out by my predecessors and involved much more complex leadership and management. That evolution has continued apace.
Just this week, I supported a CEO as she partnered with her board on a diverse set of complex issues. The conversation required her to have expertise about program expansion and the funding required, land acquisition and future space requirements, and the opportunities and challenges of a potential merger. Even in nonprofits large enough to employ a team approach to leadership, the proverbial buck stops with the CEO, and the board expects the CEO to juggle and understand all the relevant issues.
Clearly, today’s CEO must grasp, if not master, all the challenges and opportunities facing their organization. But which are the areas that are most deserving of focus and attention by the CEO, and where they can have the greatest impact?
I believe CEOs need to prioritize focus in three distinct areas to ensure success—talent management, donor engagement and finances.
As a lifelong baseball fan, I long ago realized that managers are responsible for getting the best out of their players, but are ultimately limited by the team that takes the field. A manager’s margin of impact—maybe five to 10 wins—can be the difference between a winning and a losing season. But beyond that, an organization’s people determine its success. Nonprofits are no different. The talent a nonprofit can attract and retain determines how the “season” will go. Talent management must be among a nonprofit CEO’s most important activities. A CEO must:
- Be involved in the hiring process. Organizational size will dictate just how deep into the organizational chart this involvement goes, but for organizations fewer than 50 people, I strongly recommend the CEO meet each potential new hire. The CEO is the keeper and driver of the organizational culture and should own the responsibility of personally communicating that and the organization’s vision to each new hire.
- Take time to coach and get to know the team. A CEO, or any team leader for that matter, should never be too busy to stop, get to know and seek opinions from employees. While the concepts of the “one-minute manager” and “management by walking around” seem to have shrunk in popularity in our technologically connected world, a successful CEO understands the value of talking to people. Effective CEOs capitalize on every opportunity to do so and are deliberate in scheduling that time if those opportunities aren’t forthcoming on their own.
- Be accessible. The open door policy needs to be real. CEOs should ask their teams to call them out if they don’t feel they’re getting enough attention. It is important for CEOs to be accessible to help staff deal with personal and professional challenges, to ensure people reach their full potential. I firmly believe that if a CEO is authentically available to their teams, the teams won’t take advantage of it, and they’ll only call on the CEO when it’s important.
I’m observing that donors and prospects are requiring deeper engagement and cultivation than ever before, and CEOs are expected to play a role in attracting philanthropic investment. A CEO must:
- Make time. I’ve had nonprofit CEOs tell me they don’t have time for fundraising. The time required will vary by the dependence on philanthropic capital and other factors. But given its importance to the success of any nonprofit, fundraising should never take up less than 20 percent of a CEO’s time and could rise to as much as 75 percent of a CEO’s time if, for example, if the nonprofit is launching a campaign.
- Seek advice. Donors don’t want to just be a piggy bank. CEOs should take the opportunity to actively seek advice from donors or prospects about strategic challenges facing their organization. Aside from making the donor feel part of the nonprofit’s team, which will result in greater investment over time, donors will likely provide great insights and new points of view.
- Create mechanisms to forge and enhance engagement. Organizations increasingly need to create task forces, advisory boards and committees to provide the framework for engagement. A CEO should encourage and expect these types of groups as part of their organizational landscape and should push development staff to create them and engage them as needed.
It is tempting to defer to the CFO on both the day-to-day and strategic aspects of an organization’s finances. A CEO does so at their own peril. A nonprofit CEO should consider their CFO (or equivalent) as a subject matter expert and partner in managing the financials, but a successful CEO needs to be every bit as conversant on the statement of financial position, statement of operations, cash flows and trends as the CFO. For better or worse, achieving an organization’s mission is dependent on having the resources to do so; the regard in which a CEO is held will rise or fall based on the finances. To ensure the level of understanding and engagement required, I recommend a CEO:
- Ask a lot of questions. Very few CEOs were selected to lead their organization because of their financial acumen, so for most it will be a learned skill. CEOs should have their finance team explain the organization’s financial situation in detail. The board treasurer should do the same. A review of the financials by a trusted professional colleague or peer may reveal other useful observations.
- Be a control freak. Before becoming CEO of a nonprofit, I got unexpected advice from a leader I respected and who I would not characterize as a control freak. He recommended that for at least a few months after I started, I sign every check myself. He suggested that seeing every check and asking questions would be the quickest way to learn how we were spending our money. That might not be practical for all organizations but drilling down on the exact detail of as many expenses as possible for a period of at least three months may expose surprising and helpful information.
- Own the organization’s financial narrative. The CFO is a capable and well-qualified professional and will surely be willing to explain finances to their organization’s board. Successful CEOs don’t let them. Not for their sake or the board’s sake, but for their own sake. A good practice is to circulate monthly financials to the board at the close of every period (month) along with a narrative. CEOs should craft that narrative themselves. The CFO may review and propose changes or clarify as needed. But taking the time to write the first draft will require a CEO to identify the overall “story” and force them to become much better informed.
Being a CEO of a successful nonprofit will continue to require hard work and more varied skills. But by prioritizing the above issues, utilizing some of the tactics described, a CEO will be well on their way to achieving organizational potential.
Craig Shelley is a managing director at Orr Group, which provides nonprofits with strategy, fundraising, leadership and management solutions and has offices in New York City and Washington, D.C.
Craig brings an entrepreneurial approach to fundraising, nonprofit management and strategy. Prior to joining Orr Group, Craig served in a variety of positions with the Boy Scouts of America, most recently as the national director of development and corporate alliances. He serves on the executive committee of the Association of Fundraising Professionals’ New York City Chapter and the editorial advisory board for Nonprofit PRO, and is a Certified Fundraising Executive (CFRE).