CompassPoint

Info You Can Use: Development Directors Need Love Too

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You may be aware of the recent report commissioned by the Evelyn and Walter Haas Jr. Fund and conducted by CompassPoint about the careers of development directors. I already had a pretty good idea that development was a thankless task and there was a lot of turnover, but Under Developed: A National Study of Challenges Facing Nonprofit Fundraising, brings the reality to the fore.

I was astonished to learn that a quarter of development directors were novices or had no experience in the field at all. My guess would have been closer to 5%.

One in four executive directors (24%) say their development directors have no experience or are novice at “current and prospective donor research.” Among the smallest nonprofits, the number rises to 32%. When it comes to securing gifts, executives report that 26% of development directors overall—and 38% among the smallest nonprofits— have no experience or are novice.

Half of all development directors vs. 34% of executive directors contemplate leaving development in two years. 22% of development directors had either given notice or were actively looking at the time they were surveyed. 40% of those surveyed said they weren’t sure they would stay in development as a career.

A quarter of executive directors reported firing their previous development director for performance or incompatibility with organizational culture.

As might be expected, organizations with bigger budgets reported greater retention rates. Being able to offer better salaries enabled them to attract talented people from other organizations. Some of these organizations reported something of an arms race with the best development professionals being able to name their own price in the face of an ever shrinking talent pool driving costs up across the board.

I have given some attention to the difficulties with attracting and retaining executive directors over the years so I thought it important to turn some attention to the development arm.

In fact, the report makes many of the same recommendations you will find in respect to the executive director positions: recognizing and celebrating emerging leaders, having better training/mentoring and having transition plans.

One of the central things they suggest is nurturing a culture of philanthropy. If you have read this blog for any length of time, you know a common refrain I have is that marketing and development aren’t the sole province of those departments followed by an inevitable link here.

The report talks about the need not to silo responsibilities. They define culture of philanthropy as:

Most people in the organization (across positions) act as ambassadors and engage in relationship-building. Everyone promotes philanthropy and can articulate a case for giving. Fund development is viewed and valued as a mission-aligned program of the organization. Organizational systems are established to support donors. The executive director is committed and personally involved in fundraising.

While they specifically mention executive director in the definition, the board is mentioned frequently enough in their discussion of the concept they probably should appear as well. They acknowledge at length that asking for money is a difficult endeavor for all those involved. They felt the fund development process would be much easier if the goal permeated all areas of the organization because it would naturally bring more support and resources to bear and make the director feel more empowered.

“I think the fundraisers don’t always manage up because they think, ‘It’s all on my shoulders.’ They forget that you’ve got 20 some board members and another group of volunteers, an executive director, and other direct staff — that this is a partnership.
—Executive Director

This is the one area in which smaller organizations can be compete with larger ones. While they may not have the money to pay high salaries and support the newest development software, (and the software gap is getting increasingly smaller and affordable), the more close-knit working environment can have the staff more easily integrate with development than in larger organizations where the function is more departmentalized.

There are some depressing findings in the report, but I think it is worth reading because I suspect it will also reveal that the problems one faces in ones organization aren’t as uncommon as you might think. That realization will hopefully allow people to feel a little freer to discuss these issues rather than assuming they face them alone and everyone else is operating effectively.

Those Daring Leaders Of Non Profits

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A nod to our friends at the Non-Profit Law blog for noting that CompassPoint Non Profit Services and the Myer Foundation who teamed up three years ago to bring us the report I blogged on, Ready to Lead, studying trends in emerging leadership of non-profits, has come out with a new Daring To Lead, studying the status of non-profit executive directors.

The last time they studied this topic was 6 years ago, before the recession. Their new findings are worrisome in terms of the lack of succession planning but encouraging in respect to the amount of enthusiasm and lack of burn out the majority of executive directors feel in the face of the recession. Their three main findings deal with those topics: succession, the recession and executive director morale.

Finding 1
“Though slowed by the recession, projected rates of executive turnover remain high and many boards of directors are under-prepared to select and support new leaders.”

Due to the recession impacting their retirement plans, fewer executive directors left their positions than planned. A small percentage (9%) of respondents cited the lack of an appropriate successor as a reason for remaining. So while there hasn’t been as large an exodus as was once feared, little has been done to prepare for that eventuality.

“Executives and boards are still reluctant to talk proactively about succession and just 17% of organizations have a documented succession plan. Even more problematic is the extent to which many boards are unfamiliar with the dimensions of their executives’ roles and responsibilities. Just 33% of executives were very confident that their boards will hire the right successor when they leave. Performance management is a critical means of being in dialogue with an executive about success and its metrics, yet 45% of executives did not have a performance evaluation last year…Without consistent, meaningful engagement in what the job requires, many boards are under-prepared for their critical role in executive transition.”

The report also cites some numbers which indicate a series of mishires by boards and unclear expectations by boards and executives. One of the biggest challenges executive directors face is establishing an effective partnership with boards and getting the support they need in the early years of assuming the new role.

“It appears that many boards see executive transition as ending with the hire, when in fact leaders—nearly all of whom are in the role for the first time—need intentional support and development as they build efficacy in the executive role.”

Finding 2
The recession has amplified the chronic financial instability of many organizations, causing heightened anxiety and increased frustration with unsustainable financial models.

Hardly a surprise that many non-profit leaders are worried about whether their organization will continue to exist in these difficult economic times. Many executive directors reported having less than 3 months of cash reserves. According to the report, the common guideline is to have between 3 and 6 months. Many first year leaders are faced with the most daunting of situations.

“Thirty-two percent (32%) of executives in their first year on the job have less than one month of operating reserves; in other words, those on the steepest part of the learning curve often have the smallest margin for error.”

It it any wonder than that a listening tour by Building Movement in 2004 found a lot of prospective leaders in the next generation, while chomping for greater responsibility in their organizations, were reluctant to assume the executive position. (My post on their report here)

Finding 3
Despite the profound challenges of the role, nonprofit executives remain energized and resolved.

The very encouraging news in the face of all this.

“Forty-five percent (45%) reported being very happy in their jobs, and another 46% reported that they have more good days than bad in the role. Levels of burnout, especially given the economic climate, were low; 67% of leaders reported little or no burnout at all. In fact, leaders distinguished between burnout, which they associated with disengagement and ultimately leaving the job, and the realities of fatigue and elusive boundaries between their work and personal lives that go with the job. Forty-seven percent (47%) of executives reported having the work-life balance that’s right for them, while a significant minority (39%) said they did not.”

One of the biggest challenges executive directors reported they faced was human resource management. Attracting people, retaining them once they were trained and had skills to find better work and motivating those that stick around toward a unified organizational goal comprise a tough task for these leaders. There seemed to be a loose process of delegation and sharing of responsibility that didn’t approach formal mentoring.

“And a large majority (81%) reported having someone on staff that they trusted to make important organizational decisions without consulting them. Explicit executive mentoring of other staff was a relatively infrequent practice, with 31% of executives reporting being in an explicit mentoring relationship.”

The leaders themselves eke out a rough system of acquiring leadership training/mentoring/coaching/peer networking to improve their own skills.

Few executive leaders spend significant time interacting with boards of directors. 55% responded as spending less than 10 hours a month on board related activities which is at best 6% of their time. According to the report, other studies have found that executive directors who spend 20% of their time on board related activities are most satisfied. Most of those responding to the Daring to Lead survey were dissatisfied with their board relations.

As succession planning has been one of my favorite topics, you know I am going to suggest people should read the results. It is only 20 pages long. They make suggestions at the end about how to improve the overall situation. The general thrust of their advice is clear before you reach it–basically boards need to do a better job of succession planning and find ways to support and engage with the executive director more frequently and effectively.

One area that isn’t really covered in the body of the report but that is mentioned in the calls to action at the end is for funders to recognize the role they play in perpetuating the current situation and how their initiatives can move things in a more constructive direction.