Welcome to the e-learning lesson on Leading a Nonprofit Organization. By the end of this lesson you will be able to recall the operational responsibilities of an executive director, recall various leadership styles, and apply knowledge of operational responsibilities and leadership strategies to successfully lead a nonprofit organization. No matter your title or role, there are plenty of opportunities while working at a nonprofit organization to serve as a leader. And whether you are directing a board, chairing a committee, managing a team, or coordinating a project, the goal is always the same — to lead effectively.
Leading a nonprofit requires an understanding of the organizational structure as well as strong leadership skills.
The structure of some nonprofits may mirror the corporate model, with a clearly defined chain of command. But many others, particularly smaller organizations, pursue their mission in a more unique fashion. Accordingly, this lesson will cover the operational responsibilities of the executive director as well as leadership strategies. The former provides practical tips and tools for the first-time executive, while the latter discusses leadership in broader terms — offering insight and activities to help anyone become a stronger leader.
This lesson will provide you with the information necessary to successfully lead your nonprofit.
By the end of this lesson you will be able to:
- Recall the operational responsibilities of an executive director
- Recall various leadership styles
- Apply knowledge of operational responsibilities and leadership strategies to successfully lead a nonprofit organization
CHAPTER 1: Becoming an Executive Director
As the person in charge of the operations of a nonprofit organization, an executive director has many unique responsibilities. In addition to establishing and enforcing the vision of the organization, executive directors are charged with recruiting and supervising office staff, maintaining a productive relationship with the board of directors, creating a fundraising plan that will ensure sustainability, and managing organizational finances. This chapter offers tips and tools to help make your adoption of this new role as seamless as possible.
The executive director is responsible for establishing an organization’s climate, work, and processes.
Starting a new job is always an exhilarating experience, and in becoming a nonprofit director, you have the power to affect real, lasting change. Whether you are replacing a former executive director or starting your own organization, it is important that your orientation occurs as part of a larger transitional plan. Because the executive director takes the lead in establishing an organization’s climate, work, and processes, assuming control can impact staff morale, board member engagement, and the perception of funders and clients.
Organizing essential documents can help you transition into your role as executive director.
Here’s a quick list of the essential documents that a new executive director should gather together on the first day of work and keep in a management folder. If these documents are not already available, you should make it a top priority during your first quarter on the job to get them developed.
- Most recent annual report
- Strategic plan
- Staff contact sheet
- Board roster and contact information
- Board policies and procedures
- Technology inventory
- Organizational conflict of interest policy
- IRS determination letter
- Personnel handbook
- All job or position descriptions (including your own)
- Employee orientation manual and process
- Current fiscal year budget
- Current statement of financial position and activities
- Recent audit information (if applicable)
- Funding matrix (with funder name, amounts, and report deadlines)
- Fundraising plan
- Recent proposal(s)
CHAPTER 2: Designing, Developing, and Implementing Strategic Plans
As an executive director, it is your responsibility to guide the organization and provide a vision for where it will be in the immediate future and the long term. This is achieved through the creation and implementation of a strategic plan. Strategic planning charts a course for reaching your goals and evaluating your progress. Strategic planning is important because it provides an organization’s board, staff, and stakeholders with a universal blueprint for action. Every nonprofit will have different needs for a strategic plan, depending upon the organization’s leadership, culture, and size. Sometimes strategic planning is less about making big, sweeping decisions, and more about clarifying an organization’s top priorities. While board members, staff, clients, community members, and other stakeholders may play a role in forming the strategic plan, the process is often driven by the executive director.
Developing an actionable strategic plan revolves around proper design.
Prior to the development of a strategic plan, you should determine a design process and identify dates of anticipated achievement. You may also want to consider hiring an external consultant.
Following these few simple rules will increase the likelihood that your strategic plan becomes an actionable one, rather than a document that collects dust.
- Involve the relevant people. Gather input from those upon whom you will rely to implement the plan.
- Break the plan into tasks. Although the plan should contain large, long-term goals, it is equally important to develop actionable steps for achieving them.
- Be realistic. It’s okay to think big, but you should also think about what is realistically achievable based on the size and strength of your support team.
Once you have a plan in hand, you are ready to put it into action.
If there is already a strategic plan in place when you assume the role of executive director, you will want to meet with board members and staff to review the plan and discuss their reactions and experience. Specifically, you should survey the team on who contributed to the plan, how the plan has historically been implemented, and the perceived effectiveness of the plan. These conversations will help you determine the best way to move forward with implementing the plan.
Here are a few helpful activities for implementing your strategic plan:
- Assign tasks and due dates. For more complex tasks, consider dividing them into smaller action items or assigning them to a work group or team.
- Insert the tasks into the most appropriate job descriptions and schedule performance reviews to monitor progress.
- Distribute the plan in a format that is user-friendly and conducive to implementation.
CHAPTER 3: Hiring, Managing, and Retaining Staff
An organization is only as strong as its staff, so it is essential that you take a thoughtful approach and make informed decisions when recruiting new employees. Once you have a team in place, or if you are inheriting a preexisting staff, it is important to engender mutual respect and commitment to the organizational mission. Whether you are the supervisor to a small team of middle managers or you directly oversee the entire staff, you will play a key role in staff recruitment, management, and retention. This chapter offers tips on writing an effective job description, managing smartly, and keeping your staff focused and fulfilled.
Carefully constructed job descriptions will help align your nonprofit.
By providing a straightforward description of the position’s key duties and requirements, a well-written employment listing will help applicants determine if they are a good match for the job and provide a framework for choosing the best candidate for the position.
A job description can also prove useful in the orientation and supervision of a staff member, as it helps everyone in the organization understand the boundaries of that person’s responsibilities, and it provides the framework for a performance development plan to be developed by the employee and his or her supervisor.
There are several essential elements to crafting an effective job description.
Provide a brief history. You might want to include when the organization was founded, the organizational mission, and a list of your programs.
Describe all of the duties associated with the position. Provide plenty of detail in this section. The applicant will rely on this information to determine his or her suitability for the job, and the organization will use the details here to define the new hire’s role and create a performance management tool.
List all requirements for applicants to be considered for the position, as well as any preferred skills, knowledge, or experience. Be sure to distinguish between what is essential to the performance of the job (requirements) and what would be considered beneficial but is not essential (preferences).
Provide an e-mail address or fax number for submitting applications. You should also specify what materials must be included for consideration (e.g., cover letter, resume, writing samples).
Other information you may want to provide in a job description includes salary and benefits, a description of the work environment, travel requirements (if any), the title of the person(s) to whom the employee will report, the terms of employment (e.g., short-term, contract, or full-time), and the job hours or work schedule.
Keeping employees well-informed, dedicated, and adaptable can lead to greater organizational results.
Whether directly or indirectly supervising employees, the executive director establishes the overall tone for staff management across the organization. And while every manager has his or her own style of leadership, there are several key tactics for ensuring that your staff stays well-informed, dedicated, and adaptable.
A formal walk-through of the organization’s operational structure and practices empowers new employees and makes them feel like part of the team from the very start. It also helps establish clear lines of communication and promotes an open environment that encourages questions and feedback.
Well-defined Roles and Responsibilities
The more employees understand what is expected and required of them, the better they can work toward achieving those goals. And a clear understanding of how one fits into and supports the organization allows for a healthy degree of self- and peer-management.
Regular Management Check-ins
Both managers and their employees benefit from periodic reviews and consultations. This ensures that all parties remain on the same page and presents a forum for self-reflection, reevaluation, and open communication.
Meshing of Styles
Each member of your organization has his or her own way of approaching a task and interacting with managers and fellow employees. It is critical to establish an environment in which varying work styles can coexist and flourish.
Personal conflicts are the primary reason for employees electing to leave a given job.
Personal conflicts are the primary reason for employees electing to leave a given job. This amplifies the importance of being able to mesh styles. It also cements the need for an executive director to institute measures that will help employees feel secure, valuable, and able to grow within the organization. Some recommended methods for keeping your staff satisfied and dedicated include:
Provide Relevant Benefits
Most employees expect health insurance and paid vacation time, but you should consider any and all benefits that support the needs and desires of your staff, including life and disability insurance or such pre-tax incentives as transportation and childcare subsidies.
Always remember to take time to recognize the accomplishments of your employees. Whether you publicly acknowledge an individual’s achievement during a staff meeting or throw a party to celebrate the team’s successful completion of a project, this kind of gratitude bolsters employee confidence and commitment.
Help Individuals Grow
An executive director is not simply someone who manages daily operations and delegates tasks. The executive director also functions as a professional mentor. Get to know your employees and their career aspirations and help them achieve their goals as appropriate. Your encouragement and support will engender loyalty and respect.
Challenge Your Employees
No employee likes to feel like he or she is just collecting a paycheck. Help your staff grow as they work by learning new skills and taking on new responsibilities. Your employees should continually be reminded that their hard work and willingness to push themselves is integral to the organization’s mission and success.
CHAPTER 4: Working with a Board of Directors
As any nonprofit director will tell you, it’s not just employees with whom it is essential to maintain a positive working relationship. To function as an effective executive in a nonprofit organization, you must learn to balance your day-to-day leadership duties with your accountability to the board of directors. This chapter will offer strategies to maintain a positive relationship with your board members by focusing on organizing your meeting agendas and clearly defining the roles and responsibilities of the board.
Managing your board of directors is critical to the success of your nonprofit.
The proper balance can only be achieved when both the board and the executive director have clearly defined their roles and responsibilities, and when meetings are structured in an efficient and logical fashion. Some initial degree of tension or disconnect between the executive director and board of directors is natural, but taking steps to address any challenges or concerns will instill mutual trust and strengthen the organization’s operational capacity.
The line between who is responsible for what is often unclear to both executive directors and board members.
Some directors or board members may not have prior experience in their role, while others may have held similar positions but must learn how to adapt to the unique needs of this particular organization. You may want to review your job description, as well as work on developing a board member orientation process that is easy to understand and follow. You should also make certain that all board members are provided with detailed descriptions of their legal obligations and the specific needs of your organization. It may prove helpful with this step to obtain BoardSource’s Legal Responsibilities of Nonprofit Boards or refer to Free Management Library's Sample Job Descriptions for Members of Boards of Directors.”
CHAPTER 5: Financial Management and Fundraising
In most cases, the executive director is also responsible for determining how the organization spends its money and generates financial support. Managing and raising funds effectively is critical to the sustainability of the organization and will be an issue of particular concern to the board of directors. In this chapter, you will discover how to generate and analyze key financial documents to keep track of your nonprofit’s finances, and how to create a fundraising plan so you can successfully raise the funds needed for your annual budget.
At a minimum, a new executive director must have a facility with managing finances.
Also known as a “statement of financial position,” the balance sheet reports on the organization’s assets and liabilities for a given moment in time. Assets include cash, accounts receivable, equipment, ownership of a building, and any intangible resources that have value, such as a curriculum or copyright. Liabilities are any cash owed, including payroll, rent, transportation, and supplies.
Statement of Activities
This statement of profit and loss compares funding sources against program’s expenses, administrative costs, and other operating commitments. As opposed to the balance sheet’s financial snapshot, the statement of activities reports on a specific timeframe (e.g., monthly) and indicates whether the organization is financially solvent (in the black) or owes money (in the red) for that period.
The executive director is also responsible for working with the board, accountant, chief financial officer, and other stakeholders in creating the organization’s annual budget.
The executive director is typically tasked with creating and implementing a fundraising plan.
In tandem with a development director, board members, or other support staff, the executive director is typically tasked with creating and implementing a plan for successfully raising the funds needed per the annual budget.
When creating a fundraising plan, it is important to examine the organization’s history to identify previous funding sources. This is the single greatest indicator of future fundraising success. The fundraising plan should outline steps for raising funds from each potential source. Using foundations as a sample revenue source, here are some suggested steps for creating your fundraising plan:
- Review all previous foundation funding and determine whether the organization is eligible for financial support from each foundation again.
- Research additional foundations for compatibility with the organization in terms of mission, geographic focus, and organizational life cycle.
- Complete profiles that include foundation priorities, contact information, proposal due dates, submission instructions, and funding range.
- Develop a funding matrix to determine the probability of receiving grants from each foundation. Criteria include compatibility with organizational mission, foundation funding priorities, receipt of previous funding, funding of similar organizations in the area, and relationship with the funder.
- Multiply the probability of funding by the amount of the request to determine how much the proposal is “worth.”
- Determine which foundations to apply to based on “worth.”
The steps above can be adapted for planning to raise funds from individual donors, corporations, and government entities. Once you determine who you will be seeking funding from, you will need to establish a plan and time frame for requesting the funding.
CHAPTER 6: Leading Teams
Leadership is a critical factor in managing the complexities of a nonprofit organization, but you don’t have to be the executive director to be a leader. Nearly everyone must lead at some point in his or her employment at a nonprofit, whether it’s in the form of heading a project or mentoring a coworker. In this chapter, you will learn the characteristics of the various leadership styles and how you can effectively vary your style based on the situation.
It takes more to effectively lead than simply being the one in charge.
The critical question for any person placed in a leadership position to ask is whether or not people are willing to follow your direction. An important first step in answering this question is to consider your approach to leading. Let’s explore a few of the most common leadership styles:
This style of leadership is one that involves being a leader with having all of the decision-making responsibility. Although authoritarians are often criticized for adhering to conventional notions of leadership, there are times when this style is most appropriate, such as when the leader is clearly the most knowledgeable and qualified to decide, or when there isn’t sufficient time to consider team input.
In contrast to the authoritarian, the participative leader consults with team members when decisions need to be made. When used effectively, this style of leadership can help motivate the team and keep people engaged. Participative leadership tends to make team members feel more valued, but it is a style best employed only when there is ample time for group discussion and evaluation.
The effective use of delegative leadership requires that the leader provide sufficient coaching and support for the team to feel comfortable making decisions. A delegative leader must also pay close attention to the skills and talents of the team to help ensure that appropriate levels of responsibility and decision-making authority are assigned. Delegative leadership does not mean that you relinquish responsibility and can blame others if things go wrong.
Depending on the circumstances, you may need to vary your leadership style.
Depending upon the situation, a leader may need to employ a leadership style to which he or she is unaccustomed or combine two or more styles. Over time, as project or organizational needs change, you may consider reevaluating or adjusting your leadership style. It also helps to be open to team feedback and to occasionally reflect upon your leadership approach.
CHAPTER 7: Team Management and Performance Tools
There are a variety of models that have been designed to help manage teams and plan projects. Two popular models utilized by managers and project leads are the Drexler/Sibbet Team Performance Model and the GRPI Project Planning Model. Both models present logical approaches to getting the most out of your work with a team. Often the goal of a leader is to gather the working parts of an organization, team, or project to form a cohesive unit and achieve a common goal. This chapter will characterize the stages of each model and explain how the two prescribed models can help optimize the workflow of a team effort.
The Drexler/Sibbet model helps optimize the workflow of a team effort.
Developed by Allan Drexler, David Sibbet, and Russ Forrester, this model comprises seven stages to help optimize the workflow of a team effort: orientation, trust building, goal clarification, commitment, implementation, high performance, and renewal. Each stage is identified by the primary question of concern for team members when they are in that phase.
The structure of the model resembles the path of a bouncing ball. This is because the model demonstrates the team’s arch of energy. When in the stages toward the top of the diagram (the beginning and end), teams will often feel a greater sense of freedom – the orientation and renewal stages provide opportunities for limitless potential and possibility.
As a team moves into stages toward the bottom of the diagram (the middle stages), there are more constraints. Goals are set, and some things end up being included, while others do not.
Teams don’t always move through the Drexler/Sibbet model in a linear fashion, so don’t be discouraged if you are unable to complete one stage before moving onto another. The model is designed to enhance workflow and team performance rather than restrict the team to a fixed set of rules.
Let’s look more closely at each of the seven stages and the questions and issues raised during them.
The primary question asked during this first stage of the model is, “Why are we here?” The team must work together to identify a task that each individual finds personally beneficial, useful, or important to the organization. When team members are unable to envision a role for themselves, they often feel anxious and distance themselves from the group. Alternatively, when members feel more connected, they are more likely to participate in achieving the group’s goals.
According to the model creators, this is the stage during which “people want to know who they will work with – their expectations, agendas, and competencies.” Trust can only be established once team members become clear on their individual roles and responsibilities and establish a better understanding of each other’s work styles and experience.
Here is where the team works to identify a shared vision by discussing possibilities, variations, and the reasons these goals may or may not be the best options. Some disagreement can happen during this stage, so it is important to make sure that everyone is on the same page before proceeding. This is also a good time to address any conflict between individual and organizational goals.
This stage comprises the most constraining work the team will face during the entire process. If your work here remains unresolved, some team members may disown individual responsibility for the success of the team by going along with the preferences of others, while others may attack proposed courses of action without offering any feasible alternatives. Such behavior could indicate a lack of priorities, roles, or a clear definition of how work should proceed.
The implementation stage is dominated by timing and scheduling. You may cycle back through earlier stages of the process as your team encounters unforeseen obstacles and works to find its groove. The key here is to impose some shared processes for completing the team’s work. This can be achieved with online project management tools, flowcharts, or work plans.
While the design of this model might suggest that “high performance” is a destination that all teams reach, research indicates that many never do. But you don’t have to reach this point for good work to get done. The process outlined in the Drexler/Sibbet model is designed to increase the likelihood of becoming a high-performance team and spending more time in this stage.
The primary question at this stage of the process is, “Why continue?” You can think of renewal as both an ending and a new beginning. Each team member may want to reflect on what worked and didn’t work, what was achieved and can now be left behind, and what issues remain to be tackled.
The GRPI model is a simple but effective way to plan projects.
Some teams may find it difficult to adapt the theory presented in the Drexler/Sibbet model into everyday practice. Another tool that may prove helpful in planning projects is GRPI – an acronym for goals, roles, process, and interpersonal relationships.
The GRPI model suggests that teams and their leaders will function most effectively if they address the four stages of planning in the order they are listed in the acronym, as follows:
Goals – What is the team going to accomplish? What is its core mission?
Roles – Who will do what on the team? Are the roles and responsibilities clear?
Process – How will the team work together to solve problems/make decisions?
Interpersonal relationships – How do the team members get along?
This lesson has defined the operational responsibilities of an executive director, from human resources to financial management. You have also been exposed to tips and tools to help you grow as an effective leader. You should now be able to recall your leadership style and apply your knowledge to successfully lead your nonprofit. Remember whether you are directing a board, chairing a committee, managing a team, or coordinating a project, the goal is always the same — to lead effectively. Thank you for taking the time to complete this e-learning lesson on Leading a Nonprofit Organization.
Leading a nonprofit requires knowledge of the operational responsibilities as well as leadership skills.
Leading a nonprofit organization can be a complex task. In addition to establishing and supporting the vision of the organization, executive directors juggle many responsibilities including recruiting and supervising office staff, maintaining a productive relationship with the board of directors, creating a fundraising plan that will ensure sustainability, and managing organizational finances. Successfully orchestrating these tasks requires an executive director to focus on his or her leadership skills.
Please use these additional resources to assist you with your management needs.
Management Craft is a blog written by Lisa Haneberg, vice president and organization development consulting practice leader at Management Performance International. The material is centered around business effectiveness and alignment, and offers great insight into various industries such as government, services, travel, manufacturing, and distribution.
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