Volume 7: Issue 1    August 2011 

The Pinnacle Message

Too Big to Fail is the definitive story of the most powerful men and women in finance and politics grappling with success and failure, ego, greed, and, ultimately, the fate of the world's economy. As this compelling account by Andrew Ross Sorkin reveals, big corporations and governments have had to grapple with failure and sustainability. This same chilling story has been playing out in the nonprofit arena, as it has also come as a surprise to big nonprofit entities that they cannot continue business as usual. In this region and throughout the nation, well-established nonprofits in arts, culture and social service, as well as foundations, viewed as Too Big to Fail have had to reassess their business models. Often their high profile boards were "asleep at the helm." Many board leaders and chief executives have now been forced to examine the hemorrhaging of critical programs and leadership talent in previously sacrosanct entities. Viability and sustainability will be the hallmark issues facing our sector going forward.



Do We Really Have to Evaluate the Chief Executive?

Many of the nonprofit chief executives we meet lament that they do not get ongoing feedback from their boards or receive regular annual performance reviews. It's hard for leaders to achieve their personal best when they lack feedback on which to base their development. This is particularly true for chief executives, who can be more isolated than other nonprofit executives.

For this reason, once a new executive hire is in place, it is critical for the board to provide a comprehensive evaluation at the end of the first year and once a year thereafter. However, board leadership often fails to do this, missing key opportunities to enhance the leadership of the organization.

Boards may think they know how the chief executive is really doing, but they frequently lack comprehensive information that presents a full picture of the chief executive's performance. Staff who report to the chief executive rarely contact board members with feedback until the leader exhibits egregious behavior.

Conducting an annual review of the chief executive is an important component of good board governance. Working with the chief executive to ensure that performance management systems are in place for all staff is a nonprofit management best practice. Most importantly, however, evaluating the chief executive can provide helpful information that will enable the leader to grow and develop their skills and competencies. Why not choose to have a leader who is continually learning and growing and has rich feedback to help shape that growth?

To meet this need, we have created The Essential 360° Leadership Assessment, a customized new online multi-rater feedback survey to enable boards to evaluate their chief executive in a robust, cost effective way. Rich and balanced feedback is gathered from peers/colleagues, direct reports, the board chair, and external stakeholders. The process can include a survey, individual interviews, or both; feedback can be gathered anonymously or openly.

Available from Rosewood Consulting Group in conjunction with TransitionWorks, the survey is easy to administer and collects a rich set of data on key areas of leadership competence. The survey also contains several narrative questions designed to provide comprehensive feedback and recommendations about the leader's strengths and developmental needs. We work with you and your chief executive to implement and manage a comprehensive feedback process. Contact us to learn more about how to effectively evaluate the chief executive with The Essential 360° Leadership Assessment.

Lesley Mallow Wendell is a leadership development expert, executive coach, and professional facilitator.

Don't Cut Your Development Budget

These are tough economic times, but many nonprofits are making a terrible mistake. They are cutting their fundraising budgets — and with those budgets, their ability to find money to fund their programs. Why?

There's a lot of rationalization going on out there. Some nonprofits will tell you that they can't afford the salaries of their development staff. Others will say that there is no use trying to raise money when nobody has money. Still others have decided to focus their efforts on "sure things" like government grants. The more honest ones will tell you that they really didn't like the work, so now was a good time to cut something that they were doing reluctantly and unsuccessfully.

Whatever the reason, it's a mistake. Yes, there is a lot of pressure on nonprofit budgets. Most nonprofits get a double squeeze during times like these: on one side the demand for services increases; on the other side it is difficult to get funded. Those who in good times were prudent enough to build a little savings or endowment face a third issue: diminishing returns on their investments.

However, investing in development is one of the best returns on the nonprofit income dollar. An efficient development program can give you one dollar's revenue for every fifteen cents you invest. That's tough to beat by something like fee-for-service income.

My advice for nonprofits is not to panic. Don't cut something you should never touch in the first place. At the end of this cycle you'll be much richer for it.

Matt Hugg is a fundraiser, writer, teacher, and executive search consultant.

Recent Articles from the Guidance for Good Blog

Taking a Risk

If a major nonprofit or foundation needs a search firm, it would be well advised to turn to a smaller, more adventurous, and plucky firm. Read the post.

Planning to Succeed

If your leader leaves, do you have a plan to avoid a crisis? Read the post.

Asleep At The Helm

What happens to an organization when a long-term chief executive neglects to provide serious oversight and due diligence? Read the post.

Departure Is Such Sweet Sorrow

A number of negative outcomes can occur when a founder/long-term leader seeks to maintain disproportionate power and influence. Read the post.

Recent Recruitment Projects

  • Managing Director — Economy League of Greater Philadelphia, Philadelphia

  • Executive Director — SummerSearch, Philadelphia

  • Project Director — Urban Affairs Coalition, Philadelphia

  • President/CEO — Center for Emerging Visual Artists, Philadelphia

  • Social Venture Director — Consumer Credit Counseling Services of Delaware Valley, Philadelphia

  • Executive Director — Wetlands Institute, Stone Harbor, NJ

  • Executive Director — CFA Society of Philadelphia, Philadelphia

  • Executive Director — The International Humanitarian Foundation, Boston, MA

Priscilla Rosenwald is the Principal of Leadership Recruiters, an executive search firm providing strategic staffing and leadership development for socially responsible organizations.

215-665-1479  •  pinnacle@leadrecruit.com  •  Leadership Recruiters  •  TransitionWorks

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