Top 3 Things Every Nonprofit Should Know Before hiring a new CEO

Top 3 Things Every Nonprofit Should Know 
Before hiring a new CEO

Every organization will at some point need to hire a new Executive Director, CEO or President. Regardless of the size of the organization, or its mission, it can be a challenge for the board and staff to manage. When considering making a transition, these 3 elements can help to ensure that your organization recruits and hires the leadership it needs.

  1. Get the Board “On Board”: The board hires and supports the highest-paid staff person – typically the CEO or Executive Director. The board should develop a job description for the position and agree upon the main priorities and tasks for the person in this position. This will be different for each organization. Some may want the person in this position to have a strong hand in managing programs, others, a clear focus on fundraising. While a CEO/ED typically performs all of these functions to a degree, knowing how their time will be best focused in your organization will ensure they get off to a good start. Organizations aren’t hiring a miracle-worker – they’re hiring someone to lead the day-to-day operations of the organization. What that entails is as unique as each organization. The board needs to have clarifying conversations that specifically outline what the job description and tasks for the person in this position will be. Remember, this is what the board will be using to evaluating the CEO on at a later time and agreement on the board will help this conversation go well. The board should:
    1. Approve an agreed-upon job description
    2. Approve a salary and compensation package
    3. Discuss what the CEO/ED’s priorities will be for the first 90 days, 6 months, 1 year. What should we be celebrating a year from now?
  2. Secure Adequate Finances: The organization should have 3-6 months of operating expenses in cash reserves before hiring a CEO. The person you want to hire wants to be paid – and though it should go without saying, a surprising number of organizations think that the new person will raise his or her own salary. While it is true that eventually, an effective leader will generate a return to the organization, developing those relationships and effective fundraising happen over time. An organization should be prepared to pay full compensation and benefits for 6 months to a year without expecting the executive director to raise any part of his or her own salary. If the organization doesn’t have the cash reserves to pay for an executive director, the board will need to regard is fiduciary responsibility and develop a strategy for procuring the funds. There may be other aspects to the CEO’s/ED’s salary they want to include such as car leases, insurance for family members, or additional vacation. These should be included in the salary and compensation package the board approves prior to initiating the search.
  3. Solidify a Search Committee: Most boards can’t afford to devote all their time to an executive search. An established search committee can expedite the process on behalf of the board. The search committee should be made up of several board members, but can also include friends of the organization or other stakeholders. It should not include staff or the current/outgoing CEO. The search committee will meet frequently throughout the search. When conducting conversations with candidates they will use the salary and benefits and job description that has been approved by the board. Upon selecting a candidate, they will bring a recommendation from the search committee to the board to hire the candidate of choice. The search committee is empowered to work on behalf of the board to interview and recruit leadership, but it is the board that makes the final selection.
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