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.
Our team of experts at Boardable has 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:
- 8 Key Nonprofit Executive Director Responsibilities
- When Should a Nonprofit Hire an Executive Director?
- The Qualities of a Good Executive Director
- How to Maximize Impact as a Nonprofit Executive Director
A nonprofit’s executive director plays a crucial role in furthering the organization’s mission. Ready to learn more about the role and how to set this teammate up for success? Let’s dive in.
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8 Key Nonprofit Executive Director Responsibilities
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 it 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.
2. Board Development
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 acting as a liaison between the board and the staff. As one of the board’s primary resources, the executive director should be prepared to:
- Inform the board of staff changes, donor details, successful campaign details, and areas where the staff feels help is needed.
- Relay staff and volunteer engagement ideas, as well as concerns that need to be considered by the board, not the internal staff.
- Plan and prepare meeting structure and information for board meetings in coordination with the board chair.
- Supply the board with technology to streamline work and maximize impact.
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.
3. Public Relations
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:
- Attending and possibly hosting fundraising events.
- Showing up to new program kickoffs.
- Speaking with reporters, donors, and other community members.
The best nonprofit executive directors maintain strong relationships with 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.
4. Financial Management
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.
5. Liaison Between Stakeholders
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 store 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!
7. Organizational Development
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.
Beyond legal compliance, the organization should also adhere to the highest ethical standards possible. This can truly set the nonprofit on a different plane from similar organizations.
When Should a Nonprofit Hire an Executive Director?
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:
- The organization’s founder lacks nonprofit experience. For newer organizations, the founder might have admirable aspirations but lack the expertise to make those goals a reality. An executive director with nonprofit experience can help your organization execute decisions, raise crucial funds, and develop achievable ideas. Plus, there’s the added bonus of making your nonprofit appear more professional to people outside your nonprofit (especially donors!).
- The board wants to shift its focus to a different area of the organization. Your board plays a key role in promoting strategic growth. As we’ll explore in-depth later on, the executive director works closely with these individuals, and if board members want to focus their attention on a different aspect of the organization (like fundraising), an executive director with the right background can support those efforts by handling the administrative aspects and supplying them with the right resources.
- Your organization needs a leader with strong communication skills to encourage growth. If employees are confused about the organization’s objectives or daily operations, an executive director can establish organizational-wide goals and communicate them to the entire team. They’ll serve as your organization’s compass by eliminating any confusion and by giving your nonprofit a united voice.
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.
The Qualities of a Good Executive Director
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:
- Outstanding communication skills. Above all else, nonprofit executive directors are communicators. They work with a wide range of individuals, all with different personality quirks. They speak on behalf of the organization in public settings, maintain an open line of contact with the board, and discuss initiatives with staff members and key stakeholders. They should be able to actively listen, know when and how to speak up on behalf of the organization, and constantly be ready with facts.
- The right background experience. With a thorough understanding of the nonprofit world, an executive director can easily pinpoint your organization’s challenges and help put you on a positive trajectory. They’ll understand how the industry is evolving, so they’ll have a general understanding of what your nonprofit needs to do to stay ahead. If they don’t already have previous experience, they should be willing to put the time into being trained.
- A cultural fit. How your executive director fits into the nonprofit’s culture is an essential factor to consider. Someone who doesn’t connect with the rest of your team or struggles to handle stakeholders will have difficulty getting buy-in altogether. In turn, they’ll struggle to execute decisions. Not only does a strong cultural fit make it easier to adjust to the position, but it also ensures that the executive director accurately represents your organization.
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.
How to Maximize Impact as a Nonprofit Executive Director
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:
- Pursue board member success. As we’ve explored, the nonprofit executive director works most closely with the board, providing them with everything they need to succeed. An effective executive director will take the time to build effective leaders through ample training, promote camaraderie among the board, and develop an open line of communication. Remember, the right board portal technology plays a key role in this, so this individual should consider what resources will be beneficial for effectively exercising good governance.
- Attract passionate teammates. A nonprofit is only as effective as those who work to make the mission possible. Executive directors expect their teams to execute plans with precision, and to do that, they must proactively seek high-caliber talent. From recruiting volunteer board members to finding salaried staff members, a nonprofit executive director must go the extra mile to create a healthy work culture and clearly communicate the nonprofit’s mission.
- Lead; don’t just manage. Effective executive directors aren’t satisfied with simply being “managers.” Rather, they’re leaders. Their ongoing pursuit of growth and their admirable passion is reflected in their desire to roll up their sleeves and do the difficult work when necessary. Honest, authentic leaders gain the trust and respect of those with whom they come into contact. In turn, they can effectively gain buy-in from the team and external stakeholders.
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 seasoned veterans, 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.