• The book is a practical and concise guide for executive directors (EDs) of small and very small nonprofits who want to learn how to lead their organizations effectively and efficiently.
• The book covers the basics of the ED job, the three essential areas of program, people, and money, the process of working with the board of directors, and some special chapters on specific issues that EDs of small nonprofits face.
• The book is written in a clear and engaging style, with many examples and anecdotes from the author’s own experience as an ED and a consultant. The book is also well-organized and easy to follow, with each chapter ending with a summary and a list of action items.

Recommendation

Erik Hanberg offers an excellent how-to manual for Executive Directors of non-profits – essential reading for those who lead or hope to lead small, community-based non-profits, and for their board members. The author provides concrete examples of the challenges facing leaders of small non-profits and deals with the nitty-gritty of managing staff, working with the board of directors, fundraising and preparing a budget. Hanberg includes sample budgets, models of emails to essential stakeholders, and talking points to use with donors and senior board members. He even suggests strategies leaders can use to ask for a raise.

Take-Aways

• Executive directors of non-profits need to understand their job description and be flexible, as needed.
• Leaders should study their organization’s mission statement and remain scrupulously faithful to it.
• Maintaining or recruiting dedicated staff is essential, but retaining the best people can be challenging.
• Raising money and establishing robust financial health are the lifeblood of a non-profit’s mission and community impact.
• The board of directors is the highest authority at a non-profit. Therefore, its members are also the most critical constituency for executive directors.
• Successful executive directors bring out the best in their programs, teams and constituents; inspire confidence; and advance the mission of their organization.

Summary

Executive directors of non-profits need to understand their job description and be flexible, as needed.

The work of Executive directors of small non-profits testifies to their personal devotion to their organization’s cause or services. These smaller not-for-profit organizations have budgets of less than $1 million – often far less – so salaries may be modest. Yet, good executive directors are passionate about their agency’s mission.

Committed to that purpose, these dedicated leaders risk forgetting that their main executive role is to lead and manage. Their job is not to work at the non-profit, but to work on it.

“Whether they are big decisions or little ones, whether they are snap decisions or the result of a complex process in partnership with the board, decision-making is at the core of your job as an executive director.”

For example, consider this fictitious case history: Linda, the executive director of the Smallville Historical Society, loves history and grew up in Smallville. After a short career working for an insurance company and taking time at home to raise her children, Linda took her current job as head of the Historical Society. The non-profit’s main focus is to educate local students about the town’s early days by offering school groups tours of its historic frontier cabin.

Linda started out directing the school tours, but that left her little time to manage the Society. She had to consider how to give more attention to fundraising, program building and other important facets of leading the organization. She consulted with her board president and developed easy-to-replicate procedures for some hands-on activities – including the tours – that enabled her to work as an effective leader, not as an employee.

Executive directors’ job descriptions differ for each non-profit, but their essential responsibilities are managing operations; ensuring financial viability; maintaining a collaborative role with the board and donors; and motivating employees and volunteers.

Leaders should study their organization’s mission statement and remain scrupulously faithful to it.

Executive directors must completely know and understand their non-profit’s mission statement – the reason for the enterprise. The mission determines the non-profit’s activities and tasks. Its purpose inspires donors to contribute, and – in the United States – it provides the legal foundation for a non-profit’s federal tax-exempt status and, thus, its donors’ tax deductions.

“Is your program aligned with your mission? Is it rising to meet those lofty goals or falling short? Sometimes programs can exceed their original purpose, either in pursuit of new funds or just through a slow but steady bloating process. This is called ‘mission creep’.”

Back at the Smallville Historical Society, Linda delegated school groups’ tours to volunteers. She developed scripts, learning objectives and satisfaction surveys for students and teachers. She also set up systems for collecting data and documenting jobs and activities.

As part of advancing the Society’s work, Linda and the board decided to sponsor a dramatic reenactment of the town’s 1920s labor riots in collaboration with the Smallville Theater. This new event was a pilot project with little financial downside and the potential to generate innovative new programs and collaborations. The Society’s databases and documentation were crucial for aligning the program with the organization’s mission and measuring its success.

Often, non-profits have vague or aspirational missions. In such cases, executive directors have to struggle to create meaningful benchmarks to assess how well they’ve met their non-profit’s goals. While commercial enterprises have financial definitions of success, non-profits need to establish more creative metrics to demonstrate how they’re fulfilling their objectives. These measurements can include program attendance, fundraising, budgetary discipline, and member and client satisfaction surveys.

Maintaining or recruiting dedicated staff is essential, but retaining the best people can be challenging.

Managing people can be a particularly challenging part of an executive director’s job, but the success of a small non-profit depends on the quality, enthusiasm and dedication of a few select employees and volunteers. In choosing staff members, executive directors must avoid the standard error of hiring people whose company they enjoy rather than those with complementary skills. As team leaders, executive directors must maintain open, honest and cordial communications with their staff. Because non-profits typically pay low salaries, they often face frequent and costly employee turnover.

“Servant leadership means using your power as ED to make the day-to-day experience of working at your non-profit better.”

When Linda became executive director, the Smallville Historical Society had a part-time bookkeeper and a full-time membership coordinator with multiple responsibilities. The bookkeeper was competent, but Linda found her difficult to work with and “condescending.” The youthful membership coordinator was passionate about the Society’s mission, but frequently late for work and careless about things like spelling errors in the newsletter and in communications with members.

Though Linda always sought opportunities to praise her employees in public, she spoke privately with the coordinator and told her that her spelling errors confused members. She suggested using a spellcheck program carefully in the future.

When Linda asked the bookkeeper to prepare a report, her answer was an audible sigh. Linda suggested to her that they could discuss the assignment and handle any problems by exchanging emails or holding a one-on-one meeting, but that the bookkeeper should not complain within earshot of other employees, volunteers or members.

Non-profits, by definition, have no profit-and-loss product lines or departments. Leaders often lack objective metrics by which to hold employees accountable. Meanwhile, assessing soft skills and subjective performance opens supervisors to charges of favoritism and office politics. Executives must be explicit and specific about their expectations for each employee and should hold continuous, ongoing meetings featuring candid give-and-take conversations. Employees must feel understood. They need to trust the director to be fair and empathetic, particularly in dealing with internal political issues.

When it comes to volunteers, non-profit leaders must be aware that good, reliable volunteers are as rare as jewels and must show them consistent respect and appreciation.

Raising money and establishing robust financial health are the lifeblood of a non-profit’s mission and community impact.

In close coordination with the board, an executive director is responsible for developing a budget and raising sufficient revenue to keep the non-profit afloat or enable it to grow. Lofty goals to aid the homeless or promote education, the arts, science or recreation quickly come to naught without money.

Smaller non-profits often operate on a thin margin. In that setting, revenues are significant, but non-profits also require proper cash flow management. Potential revenue sources include large and small donations, government contracts, foundation grants, membership fees, annual galas, special events, planned giving, and endowments.

“If you are too reliant on one single form of revenue, you open yourself to risk.”

Linda wanted to provide authentic pioneer costumes for Historical Society volunteers to wear on-site or during school visits, however the society had to raise money for the costumes. Branching out into school visits also called for background checks and extra paperwork.

To do all this, Linda realized she needed a part-time volunteer coordinator, although funding the position would require raising more money. Linda approached favorable donors and applied for two organizational capacity grants. She budgeted academic outreach activities and costumes based on a conservative estimate of possible donations and using some funds from one of the grants. She set up a “kids come free” policy to attract more adult ticket-buyers from the larger community.

Raising money, controlling expenses, staying within a tight budget and handling grant applications are complex, time-consuming activities. Setting fiscal priorities requires determining which goals and programs are the most critical to the non-profit’s mission. Budgeting also requires projecting revenues, which can be risky.

The board of directors is the highest authority at a non-profit. Therefore, its members are also the most critical constituency for executive directors.

The board of directors is legally responsible for keeping a non-profit true to its purpose. The board establishes the organization’s policies, strategic vision and by-laws. It monitors compliance with grant stipulations and the use of earmarked funds.

Perhaps the board’s most important job is to hire an executive director to manage day-to-day operations and administer the organization’s programs and personnel within its budget. The board must exercise oversight and make sure the executive director is competent and does a good job.

“Working for a board is a highly unusual working relationship. No single person can tell you what to do, and yet collectively they can fire you. They don’t get paid for their work, but you do. They come and go, but you stay.”

Executive directors are in an inherently sensitive position in relation to the board members who sign their contracts and determine their compensation. They must handle board issues carefully. For example, a board member may suggest an impractical idea. Instead of just shooting it down, the director’s best strategy is to email the board member, express thanks for his or her interest and input, and suggest putting the idea on the agenda of the next board meeting. Preparing an agenda is the most proactive, effective way for an executive director to influence board activities and policies.

Executive directors should expect pushback from their board from time to time. They must remember that change is not a short-term achievement; it occurs in small steps, usually measured in years.

Boards should compensate good executive directors properly, but a director who wants to ask for a raise needs to produce strong documentation of his or her accomplishments, such as organizational improvements. In order to suggest a meaningful but realistic raise, the director must learn what similar local organizations pay their top leader.Executive directors can influence and even set the vision for their non-profit if they interact with the board with sensitivity and diplomacy. An executive director should provide regular reports and documentation, respect the board’s authority and show deference to its members’ opinions and their standing.

“The work we do is vital. Whether it’s for your specific community or for the world, non-profit leaders are desperately needed these days.”

Providing surprise news or announcing bold changes at board or committee meetings without a lot of groundwork in advance is a potential career killer for executive directors. To build trust with the board, provide regular reports and hold open meetings with members. Listen to their feedback on new programs or ideas. A professional director creates a mutually respectful relationship with the board to build alliances, but paid staff leaders should not meddle in internal board matters or depend on a board member to prioritize their personal relationship over a commitment to fellow board members and the interests of the non-profit.

Successful executive directors bring out the best in their programs, teams and constituents; inspire confidence; and advance the mission of their organization.

Great executive directors combine the qualities of a professional manager, a visionary and a winning political personality. Directors can motivate board members to use their contacts and networks to raise significant money, including tapping into new funding sources. When a nonprofit is financially secure, its donors, members and visitors have a more enjoyable experience and become more loyal supporters. Employees and volunteers also find more security and higher job satisfaction working for a financially robust non-profit.

“Small non-profits usually don’t have many levels of hierarchies…They usually have small working boards without a big name on them. And they are full of passionate people – both staff and volunteers – who are there because they love the mission.”

Most executive directors of small non-profits are passionate about their organization’s cause and find meaning in their work. These professionals commit their talents to non-profit management with a sense of purpose, knowing they can make tangible, measurable changes in the lives of individuals and the quality of civic life.

About the Author

Erik Hanberg has 20 years of nonprofit experience at organizations of all sizes.

Review

The book is a practical and concise guide for executive directors (EDs) of small and very small nonprofits who want to learn how to lead their organizations effectively and efficiently. The book covers the following topics:

• The basics of the ED job, such as the roles and responsibilities, the skills and qualities, and the challenges and opportunities of being an ED.
• The three essential areas that an ED needs to master to help the organization flourish: program, people, and money. The book provides tips and tools for developing and evaluating programs, managing and motivating staff and volunteers, and raising and managing funds.
• The process of working with the board of directors, including how to communicate, collaborate, and negotiate with them, how to recruit and train new board members, and how to ask for a raise.
• The special chapters that address specific issues that EDs of small nonprofits face, such as how to start the job as a new ED, how to be a part-time ED, and how to deal with burnout and stress.

The book is a valuable resource for EDs of small nonprofits who want to improve their leadership skills and knowledge. The book is written in a clear and engaging style, with many examples and anecdotes from the author’s own experience as an ED and a consultant.

The book is also well-organized and easy to follow, with each chapter ending with a summary and a list of action items. The book is not meant to be a comprehensive or academic treatise on nonprofit management, but rather a practical and accessible handbook that offers useful advice and insights for EDs of small nonprofits.

The book is based on the author’s own perspective and opinions, which may not always agree with other experts or sources. However, the book does not claim to be the definitive or final word on nonprofit leadership, but rather an invitation for EDs to reflect on their own practices and challenges, and to seek further learning and support from other resources.

The book is a great addition to the literature on nonprofit leadership, especially for small nonprofits that often lack the resources and guidance that larger nonprofits have. The book is also suitable for aspiring or potential EDs who want to learn more about what it takes to be an ED of a small nonprofit. The book is highly recommended for anyone who wants to learn more about the little book of nonprofit leadership.

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