Josie Faass, Ph.D. is the Executive Director of the Robert Schalkenbach Foundation, a Private Operating Foundation in Princeton, NJ.
Many nonprofit leaders, myself included, mature into their roles over the course of a career, one successively higher position after another. While this growth is natural and desirable, it means that while our soft leadership skills have had plenty of opportunities to develop, we may not have had exposure to all of the harder, function-specific skill sets needed to do the job of executive director (ED) well.
It wasn’t until I agreed to teach a graduate-level nonprofit management class—five years into my tenure as ED of a private operating foundation and 15+ years into a career in the nonprofit sector—that I stepped away from the daily grind of running a nonprofit to truly take stock of everything the role requires.
What I found was that although effective leaders may share a host of similar personal characteristics, the fact that many nonprofits are small, often bare-bones operations, means that great nonprofit leaders must possess a strong working knowledge in a number of specific functional areas, the three most important of which I will cover here.
When people speak of great leaders, they often focus on personal qualities—things like integrity, foresight and courage. It’s hard to argue with the importance of these characteristics, but what lists like this omit is the fact that leadership is more than just a collection of ephemeral, know-them-when-you-see-them sorts of qualities. Effective leadership requires a personal toolbox filled with hard skills that are often very industry-specific.
Agreeing to teach a course in nonprofit management forced me to consciously “pop the hood” on what I do every day and led me to conduct a social media survey of fellow EDs to be sure I wasn’t leaving out anything important. The result was an impressive list of hard skills that anyone tasked with running a nonprofit must bring to the role in order to succeed—the three most critical of which are a strong understanding of organizational finances, human resources, and board roles and responsibilities.
Organizational Finances
Even though they’re called “nonprofits,” one of the most fundamental skills a leader in this field brings to the table is the ability to manage their organization’s finances. There’s a lot under this umbrella, of course—everything from forward-looking exercises like philanthropic fundraising and fee-based program design to the day-to-day process of tracking income and expenses to the annual rhythms of the many, many state and federal financial reporting requirements that must be satisfied in order to simply keep the lights on.
And this says nothing of the one-off financial decisions, like whether to offer a salary advance to a struggling employee, cater to the (objectively unreasonable) requests of a big donor or prioritize the needs of one revenue-generating program over another—decisions executive directors make pretty much every day. Without a doubt, a working knowledge of generally accepted accounting principles, dexterity with spreadsheets and tolerance for building the fiscal plane while you fly are important components of a nonprofit leader’s toolbox.
Human Resources
Although most of us don’t have formal training in human resources, understanding the nuts and bolts of how to fairly and legally employ people is a must-have for a nonprofit leader, particularly in smaller shops where hiring an HR professional is beyond budgetary reach.
The tie between mission fulfillment and an organization’s family leave policies or the rhythm of payroll processing may not be immediately obvious, but even seemingly small missteps in the area of employment law can derail an otherwise thriving nonprofit (ask any seasoned ED, and chances are they have at least one horror story about how an HR fumble harmed a thriving program, drained their organization’s bank account or otherwise derailed their organization’s work).
Thankfully, there are third-party providers for hire that can help ensure EDs don’t step on the biggest landmines, but it’s simply not realistic for the person in charge to stop everything and consult an outside expert whenever there’s an HR-related question. Simply put, to be an effective ED, you need to have a strong working knowledge of employment law in your head.
Board Roles And Responsibilities
Everyone knows that in the nonprofit hierarchy, it is the board of directors that manages the ED, not the other way around. And while technically true, the real world of nonprofit management ideally looks more like a partnership between the board and ED and (very often) sees the ED in the position of running operations while simultaneously guiding board members through fulfilling their own responsibilities, helping them understand the organization’s true needs and priorities, and (gently) moving them back on course when they go off track.
Of course, this dynamic makes sense. It’s the ED, not the board, who subs for a staffer who’s out sick. It’s the ED, not the board, who runs to Home Depot for a bucket when the roof starts to leak during a sudden rainstorm. It’s the ED, not the board, who searches for a contractor to overhaul the organization’s website or ramp up its social media or provide necessary sexual harassment training.
Simply put, although the ED reports to the board of directors, the ED knows the organization in a way that few (if any) directors ever will. This reality can make for a very sensitive power dynamic, which is why I’ve chosen a thorough understanding of the roles and responsibilities of their board of directors as the final “hard skill” every nonprofit leader should possess.
Conclusion
Every leader combines a set of soft skills with the harder skills specific to their industry. The act of teaching a nonprofit management course forced me to step back from the day-to-day of my role as an executive director and take stock of the areas of expertise I rely on to manage my organization. Although a comprehensive list is beyond the scope of an article like this, I believe that an understanding of organizational finances, human resources and the roles and responsibilities of a board of directors are the three most critical areas of expertise an ED can possess.
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