We spend a lot of time interviewing current and former Executive Directors and we’ve discovered a dirty little secret in the nonprofit sector. We’re not talking about your paid board lunches or the fact that no one seems to understand what diversity and inclusion REALLY means, but we know a secret about your leadership that seems to span nonprofits of all shapes, sizes, and missions. This might seem hard to believe, but it seems to be a trend that NO BOARD actually evaluates their Executive Director, not really anyway.
Oh sure, you trot out that annual committee report, you put it on your 990, but we KNOW the truth. And it’s not totally your fault: there’s a weird dichotomy that only seems to exist where professionals without much (if any) experience in the nonprofit sector suddenly find themselves evaluating someone who recruited them in an industry they don’t entirely understand.
By and large, Boards understandably tend to be somewhat squeamish evaluating their Executive Directors, so, they avoid the awkward conversations and … just don’t. The result is that there are a few Boards (and honestly more than a few Executive Directors) who don’t totally understand WHAT the E.D. is actually responsible for.
But we’re here to help. This doesn’t have to be complicated. Just put an annual (or sooner) date on the calendar that can serve as a check-in so everyone is on the same page. And if we can be the bad guy here: this is LITERALLY your job, Board members, so please don’t mail this one in. Don’t know where to start? Let us help you.
How to evaluate a nonprofit Executive Director for Board Members
1. The job description is a good place to start
You know that thing we keep talking about, that got your beloved Executive Director to apply for the position, the job description actually has (or should anyway) a good listing of objectives and responsibilities made throughout the course of the year. Start by brushing off the mothballs, or digging in the old server and give that job description a look. Is it still accurate? Do you understand or agree with the stated goals? Once a year, take a look at this job description and use it as a good starting place for the evaluation. Don’t know if your jd measures up? Take a look at ours.
2. Make real (tangible and attainable) annual goals
So THAT’S one of the things you’re supposed to be doing at your annual retreat – making goals. And, we know it FELT great when you talked about “expanding awareness” at your last Board retreat, and your Executive Director seemed excited about it at the time, and enthusiastically agreed to take on that goal. But now it’s been a year, and no one can seem to remember what they MEANT when they said that. That’s why you have to be definitive with goals, it eliminates the guesswork later on. For instance, if expanding awareness, ask the questions “to whom?” “how?” “for what purpose” and “how will we know when it is successful?” Set dates, numbers, break out a spreadsheet. And we feel like this is implied, but PLEASE make your goals WITH your Executive Director. Don’t just ask them to make a list for you, or (even worse) make a list without them.
3. Include metrics beyond the budget
It’s tempting to use the budget to base your entire evaluation, but it’s not the only (or even the best) way to gauge efficacy. Not only because the budget is something that too few Board members understand, but it doesn’t give you the full picture of the organization. Include metrics like employee retention, community engagement, fundraising, board development and recruiting to get a more well-rounded understanding of overall job performance. (You know what would be especially great? If all of those things were addressed and assessed in your strategic plan…)
4. Obviously, the budget matters
We know we just told you to consider other things outside the budget, but, the budget really is a key indicator in your organization’s health, actually both ways. Not only evaluate whether they end the year with a surplus or a deficit (obviously, deficits aren’t great,) but are aggressive new goals set? How are unexpected shortfalls – or windfalls for that matter – addressed? Has the organization grown or shrunk? How has funding diversified or consolidated? You should be looking at the micro AND the macro to help identify overall patterns. Look for aggressive goals instead of $0 budgets, take a deeper dive and consider what investments you’re making relative to your stated goals and don’t give anyone a pass for over-performing on underwhelming expectations.
5. Culture cues
We’ve seen a lot of really talented Executive Directors who are amazingly committed to their cause and connected to their staff. But there is a small minority of those talented professionals (and maybe some not so talented ones) who seem to think that being Executive Director seems to put them on a different level than everyone else. From E.D.’s who took it upon themselves to create their own reserved parking spots, to those who’ve berated their staff, to those that tried to fire their entire board en masse, we’ve heard some stunning examples of egos that have gotten out of control…and the Board does nothing. But we hear it later on when we’re doing a new search. Include questions on overall organization morale when considering performance.
This is by no way an exhaustive list, but it’s a good place to start and ensures that the Board and Executive Director to stay in sync.