PMA Consulting, LLC

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[Innovation Series] Executive Director Role Continues to Change in Nonprofits

As a part of our firm’s Innovation Series research in 2012, Patton McDowell & Associates (PMA) conducted a survey of more than 60 Executive Directors and Development Directors working for nonprofits in Mecklenburg County. The surveys were wide ranging, asking questions related to governance, staffing, fund development and financial management. For March, PMA is focusing on the information gathered around governance. Here are some intriguing highlights of the survey results regarding governance:

  • Of respondents taking the PMA survey, 56% represented organizations with a governing board and 44% with a working board.
  • Only a quarter of respondents (26.2%) noted strong or modest engagement of the board in fundraising activities. The majority of Executive Directors and Development Directors noted middling engagement (44.6%) or low engagement (29.2%).
  • Interestingly, Executive Directors and Development Directors prioritize the role of the board differently. According to the survey, both groups agree that fiscal oversight is a priority role, yet Executive Directors rank fund development as the second most important role while Development Directors elevate awareness activities and personal giving.
  • While the majority of Executive Directors note less difficulty in attracting new board members (60.6%), it is notable that a sizable portion indicate moderate to great difficulty (39.4%).

According to the PMA research, during a time when most organizations are leaning on their boards to provide strong fiscal management and fund development oversight, some boards are leaning back instead of leaning in. To some local leaders, this shouldn’t come as a surprise. In addition to nonprofit management, Executive Directors are being asked to act more like a corporate CEO, a leader with vision and business acumen.

Michael MarsicanoAccording to Michael Marsicano, President and CEO of Foundation For The Carolinas, the biggest nonprofit management issue relates to how executive leadership engages their boards. In an interview with PMA, Michael noted:

“The ability of the CEO to evaluate and prioritize the volume of information the board needs to review is critical. This is a skill that many CEOs do not possess. They’re either dumping everything on their board ‘since it is the board’s responsibility’ or they keep everything close to the vest since they’re not secure in the board’s ability to evaluate good and bad news.

“The answer lies in the middle – good CEOs set up systems to assure appropriate oversight occurs through board leadership, but provides a balance of information. Board members are not signing up to provide comprehensive oversight of every element of the organization! It is the CEO’s responsibility to create an effective process.”

PMA echoes this sentiment. Through 80+ engagements since the onset of the downturn in 2009, PMA has encountered indecision and “the blame game” during a time when confident leadership is most needed. Effective, innovative leaders embraced the challenges posed by a recovering economy and engaged their boards in visioning and capacity building activities that led to volunteer leadership buy-in on the direction forward.

In the coming weeks, PMA will be sharing case studies and interviews with local leaders who accomplished this goal. Stay tuned, Innovators!