The executive director of a nonprofit organization wears many hats, and to be effective, this individual needs to wear them all equally well. In essence, this highly-regarded position oversees other leaders at your organization, works directly with your board of directors, and ultimately shapes your organization’s future by steering your team in the right direction.
Nonprofit executive directors hold immense responsibility, allowing no room for confusion. Rather, your team must go the extra mile to fully understand the executive director’s power and do everything it can to support their work.
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Our team of experts at Boardable have worked with thousands of nonprofit boards to pursue strategic growth. We’ve collaborated directly with numerous executive directors to help maximize impact and produce an outstanding experience for the boards they work closely with.
To help nonprofit leaders strengthen their executive director’s impact, we’ve created this guide to answer common questions and explore what it takes to succeed in this position. Here’s what we’ll cover:
Whether you’re an aspiring executive director or another nonprofit leader, it’s critical to have a clear perception of what the role entails. Understanding the purpose of this position can shed light on how nonprofits function, helping to build out the role and maximize impact.
While each organization assigns different responsibilities to its executive director, there are quite a few consistencies across the entire nonprofit sector. The fundamental parts of the job are applicable to the vast majority of organizations, so let’s dive into several common responsibilities of executive directors.
The executive director often oversees the heads of each department in a nonprofit, including marketing, fundraising, program development, and HR management. Department heads look to the director for strategic guidance. For example, the executive director may lead the fundraising department in setting annual revenue goals, or they may help the program development managers set effective community service standards.
The smaller the organization is, the more directly involved they will be in each departmental function. For example, the smallest organizations may rely on the executive director to handle accounting duties, a portion of the fundraising duties, and executive-level duties.
With this direct influence, whoever fills the position should be able to clearly articulate the vision, mission, theory of change, and strategic direction of the organization. That way, they can efficiently align the entire organization so that everyone is rowing in the same direction.
An experienced board of directors provides strategic guidance based on valuable skills and contacts. However, board members aren’t responsible for making day-to-day operational decisions. That’s where the executive director comes in.
Essentially, the nonprofit executive director works to provide the board with the resources it needs to incite change and promote growth. Specifically, they play a role in selecting board members and act as a liaison between the board and the staff. As one of the board’s primary resources, the executive director should be prepared to:
What it all means is that the executive director must keep board members informed and work with them to come up with strategic solutions to any issues that arise. The joint approach to organizational growth will be invaluable as your nonprofit grows and inevitably encounters complex challenges.
Outside of normal business hours, nonprofit executive directors serve as the public face of the organization. This individual is the most visible and concrete embodiment of the organization and should take care to represent the nonprofit in a professional light.
Three duties tied to public relations efforts include:
The best nonprofit executive directors maintain strong relationships among peers, key stakeholders, the media, industry associations, and more. This ultimately helps the nonprofit put its best foot forward when launching outreach efforts or connecting with other organizations.
A spotless personal reputation is crucial because stakeholders tend to keep a close eye on the organization’s leaders. A scandal in the life of a nonprofit executive director can tarnish the organization’s reputation for years to come. In a way, executive directors should consider themselves “on duty” at all times to best represent their nonprofits.
The executive director is often responsible for fundraising and creating the conditions for financial success. This includes soliciting major gifts and working alongside the board and staff to develop actionable fundraising plans.
Further, this individual should also be able to demonstrate an ability to read and understand financial documents. This includes budgets, cash flow, income statements, balance statements, and so on. They should also understand the basics of 990 tax returns, audits, and compliance. They don’t necessarily have to be an expert, but a financially-competent executive director can brainstorm real growth strategies.
Beyond appearing at official events and speaking to community members, executive directors act as a liaison between their respective organizations and a large number of external stakeholders.
As we previously touched on, they should cultivate relationships with other nonprofit leaders and look for opportunities to partner with causes that align with theirs. Nonprofit executive directors also work with leaders in the business and government world to take advantage of applicable corporate social responsibility (CSR) initiatives. This empowers them to coordinate long-term strategic partnerships to fulfill the organization’s unmet needs.
The nonprofit executive director plays a role in the technological aspect of the organization’s operations as well. As your organization grows, proper policies and technology will be essential for future success.
For instance, as the board’s primary point of contact at the organization, the nonprofit executive director should supply them with the right tools for conducting collaborative meetings, communicating outside the boardroom, quickly executing decisions, and practicing effective governance overall.
Boardable offers everything a nonprofit board needs, from carrying out your meetings and delegating vital follow-up tasks to storing your documents in a centralized and secure location.
By simplifying board members’ jobs with technology, the executive director can promote organizational efficiency and get back to what matters: inciting real change!
It’s up to the executive director to help make powerful strides toward organizational development. This individual should set the nonprofit up for fulfilling its mission by advocating for the right systematic changes, whether those are related to policies, team behaviors, or programs.
In essence, stakeholders expect the executive director to set the strategy to achieve outcomes. This could mean ensuring the quality and effectiveness of programs, being on top of sector developments, and setting behavior expectations for internal personnel.
The executive director should always make sure the organization is operating in compliance with all laws and regulations. While there are federal rules from the IRS and elsewhere, this also applies to all regulations in the states in which you’re operating and collecting donations. There may be local rules as well.
Choosing when to hire a nonprofit executive director is a loaded decision for any organization. While some appoint one from the get-go, others choose to hire one later down the line after the organization is already established. There’s also always the possibility that your executive director will step down at some point, requiring you to quickly fill the role.
Here are three common signs that your nonprofit should look to hire a new (or even its first) executive director:
Hiring a nonprofit executive director isn’t a simple task. Being able to identify when your organization needs someone to fill this role allows you to make the right decision and promote organizational progress.
Be aware of who owns the hiring process so that time is properly allocated. For instance, many organizations charge a board committee with full ownership of the search process.
As you now fully understand, an effective executive director is an irreplaceable asset for organizational success. The board expects them to be practical and collaborative, serving as their connection to the rest of the organization. Staff members need an influential leader and a competent manager, while the community seeks someone who’s compelling and actively present.
The executive director must be—in a word—effective.
What does being “effective” look like in this role, though? To fulfill and exceed expectations, nonprofit executive directors need to possess the right skills. Let’s take a deep dive into three desirable qualities that the most effective executive directors possess:
An effective nonprofit executive director looks different for every organization, but these three qualities are universally sought-after for this position. By prioritizing the qualities that are right for your team and mission, you’ll wind up with an outstanding leader who influences your cause in a positive and authentic way.
With the power this position holds, there’s no room for mediocrity. Those initial skills will serve as a solid foundation when getting started, but true changemakers will go further by taking the necessary steps to grow as leaders and leave a positive legacy on the organization.
Whether you’re an aspiring executive director or someone who wants to improve your executive director’s experience, here are some tips for maximizing impact in the role:
Even the best nonprofit executive directors aren’t flawless. As humans, these individuals make mistakes but understand the value of turning those slip-ups into growth opportunities. Whether freshly appointed or a seasoned veteran, an executive director reflects on their strengths and their shortcomings. This empowers them to push themselves to become better with every opportunity.
Executive directors are the keystone for the lasting success of any nonprofit. From internal development to public relations, this position holds an immense amount of power and responsibility. Taking the time to fully understand the role’s correlating duties, necessary skills, and best practices for maximizing impact allows nonprofit leaders to make the most of the position.
Keep in mind that the exact role of the nonprofit executive director varies from organization to organization, but there are universal duties and expectations that all of these individuals should fulfill.
No matter the cause, the nonprofit executive director should be an outstanding leader who constantly pursues growth and works with the staff, board, and key stakeholders to achieve positive outcomes for the organization. Someone who doesn’t cower in the face of adversity and who perceives challenges as growth opportunities can lead your nonprofit toward a sustainable future.
Remember, your executive director works alongside board members on a regular basis. Learn all about this role’s connection to the board with these helpful resources:
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