It’s not always about the money: Saying “Thank You” to your Executive Director

Sherry is a sparkly-eyed Executive Director who works hard for a small non-profit. Her salary isn’t bad, but she works a lot of hours and wears many hats: manager, HR counselor, fundraiser, office manager. She attends all Board and committee meetings, acts as the marketing director – you name it. Her board members come and go, but Sherry works to keep the board on an even keel and well informed.

Still, in the ten years Sherry has been the Executive Director, she has had just two job reviews. Only once has a board member ever taken her to lunch, and nobody has sent her a birthday card or work anniversary card since she started. “If someone would just say thank you once in a while,” says Sherry, “it would really make me feel that I had value for the organization, beyond a simple employee status.”

One of the major roles for board members is to manage their key staff. That means evaluating their CEO or executive director annually, checking and comparing their salary levels to maintain current appropriate pay levels, investigating employee benefits and upgrading if appropriate.

I was Executive Director for a small arts council many years ago, and after eight months, I left the position because the board couldn’t deliver with the contractual agreement to provide health insurance. We had the money; the board just couldn’t make a decision, and frankly, didn’t seem to care if the decision was ever made. I thought if the board was that laissez-faire about something that was so important to my security, it was probably the culture of the board that I was never going to reconcile with my own values. Needless to say, I went to work for another non-profit with benefits.

The ED is a critical organizational team member that needs to stay happy beyond the paycheck. The biggest issue facing non-profit organization in the next 20 years is that Boomers are retiring in record numbers. Getting and keeping a great non-profit executive director is going to get harder and more competitive. Salaries and benefits will need to entice good management to stay, and a board culture of consistent appreciation and recognition for key staff will add to the camaraderie and trust between board and staff. Beyond annual job reviews, below are four things I have heard Executive Directors say they would love to have happen:

1. Scheduled lunches with the Board President. No agenda – just a casual lunch to check in on how things are going. The best boss I ever had would finish every phone conversation or lunch meeting with “Is there anything I can do to help you do your work?” There hardly ever was, but it meant a lot that he even cared to say it.
2. Handwritten thank you notes from any board member any time noting a piece of work well done by the Executive Director.
3. A phone call or handshake at meetings with a sincere “thank you for your hard work with us."
4. A special work anniversary gift, such as a massage, coffee card, office gift, a day off, with a card signed by the whole board. I was president for two years of a start-up non-profit that trains board members. We sent our Executive Director and her husband to the coast for two days after our big annual board training conference. It was an inexpensive but nice hotel on the beach, and she loved it.

The next time you have board meeting, schedule in a time to discuss management of key staff: When and how annual reviews take place, research and update job benefits, and build in ways during the year your Board can say “thank you” to key staff. It’s easy, it’s fun, and you’ll be surprised how rewarding it can be to build a culture of trust and positive feelings.

Practical Policies - Easy and Short!

A national speaker who specializes in non-profit law likes to say “The only thing worse than not having a policy is having a policy in place you don’t follow.”
Policies are like seat-belts: they only work if you have installed them in your car AND you use them.
I recently helped an organization dissolve that, even with three bankers on the board, allowed the Executive Director to move bank balances around electronically – eventually $750,000 went right into his bank account.
“It was so convenient,” said one of the bankers miserably. “We didn’t even think to question it when he asked if we could arrange it!. The E.D. is in Mexico, we think….."

The three issues surrounding polices for your organization are:

1. Know that there are two types of policies: Programmatic and Organization
Program policies deal with human resource/employee issues (the executive director should manage these):

• Money and cash handling systems
• Child policies
• Complaints

Organizational policies (Board directed):

• Ethics
• Gifts
• Board reimbursement
• Financial controls
• Board and key staff dismissal
• Media relations
• Public and internal complaints

2. Organizational policies should not only be written down, they should be in every board member’s notebook and presented at every orientation for new board members. Once every year or two, at a board retreat, the policies should be very briefly reviewed.

3. Policies should be as short as possible, put in everyday language, and available at every board meeting to help with decisions. Policies should be made available to the public as part of any transparent organizational documents, and, of course, staff as well as board members should be trained in all policies.

Many people groan when they hear the word “policy.” Remember – policies can and should be short, easy to read, and in place BEFORE there is a problem. The board can gather examples of polices from other organizations, but they should be customized and then checked with an attorney to make sure they comply with state law.
Policies can derail problems before they arise – most of what we hear in the news are the children and embezzlement cases that make front-page headlines. All could have been prevented with a few simple polices that train people to have “check” systems in place and keep moments of “opportunity” from happening: An volunteer alone with a child, a lone employee that counts cash from a workshop, a board treasurer that can write and sign checks no matter what the amount.
It only takes about three months for a special board task force or “governance committee” to develop polices and then train the rest of the Board and key staff in them. But don’t wait – putting on your seat-belt after the crash is not going to save you.

To Manage or Not to Manage – That is the Question for Board Members!

“I am so SICK of my Board Chair,” groans one exasperated Executive Director. “He stops by every other day, and calls me all the time. He made some decisions about one of my programs that were in a press release to the paper before I even knew about them. What a nightmare!”

“My Board is so disengaged they forget to show up at board and committee meetings,” says another E.D. with a forlorn expression on her face. “If the organization folded tomorrow, I wonder if any Board members would care?...Or even notice?”

These are extreme cases, I know, but variations of the “micro-manager” and the “hands-off” style exist to some degree with every Board of Directors. It is a slippery slope either way, but there is clear direction given about the Board role in managing an organization, especially in Oregon.

In the “Guide to Non-Profit Board Service In Oregon,” produced by the Office of the Attorney General, it clearly states that the Board is not expected to manage the day-to-day operations of the charity. It is the responsibility of the Board to hire the CEO or Executive Director to carry out the mission (through the day-to-day operations) of the organization.

Having said that--a good rule of thumb that I always use when training Boards is “nose in, fingers out”. Make sure your financial controls are in place so no one is “tempted” by cash or checks flowing into the office. The Board should require consistent updates on how the Executive Director is accomplishing annual programmatic goals that were formed during the annual strategic plan.

Human resource policies, work safety policies, and board policies should be used to protect and provide a framework within which the Board and key staff can freely function.

The Board should really be able to spend the bulk of its time at meetings focusing on the strategic direction of the organization: looking forward into the coming year to see if the economy is going to throw up any “sneaker waves”, deciding how to build their capacity to govern through new trainings or conferences, planning ways they can promote the mission of the organization in the community, etc.

Too many Boards hope their ED will be their main public speaker – but trust me – it is much more interesting to community members to hear a volunteer board member speak about their passion for the organization then a paid staff person who always look like they are trying to save their job.

Finally, the Board is required by Oregon law to be engaged and able to execute their fiduciary responsibilities. That means Board members come to meetings, ask questions, check the financials regularly, and understand the organizing documents that chartered the organization: the bylaws and the articles of incorporation.

A recent Board we worked with came to a Directors monthly meeting only to discover that they were overdrawn by $2,000 in their checking account. The ED shrugged and told them to "pay more attention". She no longer works there, but she is right - the Board President and Treasurer should have been on top of that. Right now the Board is trying to figure out where the money went and why - but in the meantime, it makes fundraising pretty hard.

When Key Staff Leaves...

I had a board chair call me the other day (in a harried fit) saying their executive director had died recently – and had worked almost to the end before her cancer at the age of 47 caught up with her. Unfortunately, the Board Chair of this small nonprofit discovered a number of office problems as she tried to fill in as “key staff” until a new Executive Director could be hired. She found that she:

• Didn’t have the passwords to get into the website or the email system to change and update information
• Didn’t have the password to get into the computer or QuickBooks files
• Had to spend hours digging for “key contact” information – like their bankers name and number, account information, the name and contact information of the attorney or CPA or insurance agent
• Couldn’t make sense of the files – the Executive Director had her own mystical filing system and it worked…for her
• Didn’t know what grants were coming in, going out, or needed reporting
• Didn’t know if the annual State and Federal organizational information had been filed

Succession planning for key staff is one of the most important activities a board can do. It fulfills the requirements that a board must be “stewards” of the organization. Planning can be done in a few hours with key staff and the board attending the session. A good facilitator can calmly take everyone through what can be dicey and emotional discussions and decisions about what critical information is needed and what the transition process is when staff leaves – either suddenly or in a plan-full way.

I will always remember what a trainer said to us once at a workshop for volunteer directors: “In times of trouble, structure is your friend”.

Once the succession plan is laid out and documented, everyone can breathe a sigh of relief and move on. Although pass words and other items may need to be updated several times a year, for the most part, their succession plan only needs to be reviewed every other year or so, or when big changes occur, like adding lots of staff or expanding programming.

Don’t be caught like this board chair who rang off the line with the exasperated comment “It would have taken so little planning to save so much time!” She is right.

The Buck Stops Where? Funding Your Non-Profit

“Fundraising report?” says the Board Chair at the monthly board meeting. “We have a movie night coming up where we hope to raise $1,500 for the organization. How is everybody doing on ticket sales?”

While this conversation is going on at the Board level, the Executive Director is holding her head and doing what we call “the Van Gogh Scream," that silent open mouth scream (from the painting by Edvard Munch). The organization needs about $30,000 to make up for lost individual giving this year. A movie night won’t cut it. The Board happily moves on to other items on the agenda, cheerfully unaware they are three months away from doom if they don’t get off their duffs.

Most of the time, board members don’t raise funds because, frankly, they don’t know how, and fundraising structure isn’t in place. Here are three things every board member should know about fundraising:

1. It is your job to manage fundraising. In Oregon, it is the responsibility of the board of directors to oversee the organization’s financial affairs – including making sure there are enough funds to deliver the organizational mission.
2. The board should have a fundraising plan, just like a business would, that is tied to an annual budget for the coming year (or two). The plan should identify funding gaps and costs of new organizational programming, and how the gaps and programs will be funded.
3. The board can delegate fundraising tasks lots of ways – to a committee, to an outside fundraising source, to the Executive Director or other key staff. Remember: no matter who you delegate the tasks to, the Board of Directors is responsible for fiscal management and the protection of assets.

In small organizations, we find that most friction and finger pointing occurs between staff and the board over fundraising. With a good funding plan in place and financial gaps targeted for the coming year, as well as a plan on who will do what in the organization to meet the demands of a budget shortfall, the tension will subside and keep energies focused on moving forward. And the Executive Director won’t have that, you know, silent scream look.