The 21st Century Nonprofit President/CEO
Nonprofit presidents/CEOs in the 21st century should have much more responsibility for their organizations than do executive directors in traditional nonprofit groups. They should be able to move faster and be more creative. They are responsible for all changes below their level. They can hire and fire without endless committee discussions.
The outstanding exceptions may be when the CEO wants to hire an “unusual staff member,” that is, someone who is not filling a traditional staff position or a direct report senior manager like a CFO. Although the CEO sill has the responsibility for hiring, he or she should review the need for these positions with the board. The board should reverse the CEO’s decision only if the long-term prospect for the positions and the costs involved do not fall within the approved budget strategy.
Under these guidelines, the board delegates a high level of authority to management. Board culture is extremely important because board members must be at a point where they feel comfortable with this level of delegation, and the senior management must embrace the increased responsibility with enthusiasm.
However, evaluation of the president/CEO must be robust and fair. Otherwise, it has been shown, in both for-profit and nonprofit organizations, that the president/CEO can use the organization’s assets for his/her own benefit.
Trust but verify!
My blog site: http://bit.ly/yfRZpz
it it better to have a President/CEO or Executive Director in today non profit? and when do you use one over the other?
Thanks for the great question. It is best to have an executive director during the early development years. During this period, the ED needs to have board assistance with operations and help with special projects. Roughly, once the budget reaches about $1 million, the board needs to review whether or not its operational activities are helping or hindering the growth of the nonprofit. Retaining this older title makes the chief executive more dependent and hampers growth. Consequently the organization needs to move to the president/CEO title, with all the responsibility for operations assigned to the president/CEO. Some EDs like to keep the status quo because the board has to share blame for problems that arise. My book “policy vs. Paper Clips” (Amazon – Third Edition – 2011) covers this issue and attendant ones.
BTW: If the ED has major responsibility for fund-development during the early years, he or she should have the president/CEO title to facilitate the financial networking role.
If you would like to discuss this issue on the phone, send me a contact number to email@example.com.