Running a nonprofit organization is no simple matter. Consider all the elements – governance, finance, strategy, operations, funding and relationships, to name a few. It’s little wonder that ideas about leading nonprofits take root and perpetuate. After all, with so much work, the last thing on the to-do list is questioning those things that seem to make sense.
Yet that’s how myths develop, and question we must. A fair number of commonly assumed “truths” don’t hold up to scrutiny.
Let’s start with perhaps the most widely-held myth.
1. Board engagement is good – the more the better.
Public Interest Management Group did an in-depth study of nonprofit management in partnership with the Nonprofit Association of Oregon and The Impact Foundry. Looking at 43 diverse organizations, we identified statistical associations between various practices and organizational success. (To read about our findings, see our white paper.)
Many of our findings contradicted conventional wisdom. One is that we found a high negative correlation between the degree of board involvement in decision-making and the organization’s performance. In other words, the more involved a board was in making key decisions, the less successful the organization tended to be.
In short, board engagement can be positive, but it needs to be the right kind of engagement. We found that successful nonprofits generally employ a strong staff model of leadership.
2. Fundraising is the board’s job.
While we’re talking about the board’s role, have you ever heard someone voice frustration that (with regret) their organization lacks a “fundraising board?” I have.
But is that the board’s job?
Effective fundraising is a combination of tasks and relationships. Our research shows that this is a team effort. Most of the tasks should be performed by staff, not volunteers. The strong staff leadership model also suggests that staff should properly lead the function of fundraising. Board members can certainly contribute in key ways, including building relationships. Still, the most successful organizations in our study had the board filling a niche defined and led by senior staff, including the CEO.
We found a small positive correlation between the board’s role in generating funds and organizational success. While a big board role in fundraising sometimes translated to success, successful nonprofits did not necessarily have that role.
The board’s role can support effective fundraising, but regardless, it’s not simply the board’s job.
3. Chief executives should be externally-focused.
Does that sub-header seem true to you? It did to over 90% of the executive directors we interviewed in our study. However, just half of the EDs in our study were externally-focused, meaning that they spend 50% or more of their time on external relations. This means that about 40% of the participants felt that they should ideally be doing things differently.
The fascinating thing is that we found no significant correlation between external or internal focus and organizational success. Either approach could be successful, and neither was better in general.
Think about that – even many of the successful internally-focused EDs thought external-focus was preferable. That’s how strong a myth can be.
By the way, the popular book Good to Great looked at this characteristic among Fortune 500 CEOs, and actually found a negative correlation. The most successful large companies tended to have internally-focused CEOs.
Bottom line: Various leadership styles can be successful, and we should be open to various pathways.
4. Chief executives should be consensus-focused.
Many organizations’ cultures reward consensus-based decision-making. But is that approach likely to lead to success?
Referring to the discussion of Myth #1 above, we found that the strong staff leadership model worked best in the nonprofits we studied. Is a focus on consensus consistent with that? Not always.
We found that detailed organizational strategy was highly associated with success. Committing to details is often harder if consensus is a priority.
Further, decisions made with consensus in mind may fall to a lowest common denominator or a place of conflict avoidance. This may hurt the organization.
I’ll put forth that consensus is nice when feasible, but not at the expense of the right decisions. Making it the top priority is not a best practice. Successful nonprofit CEOs often sell ideas to build consensus and are generally willing to make tough decisions where consensus does not exist.
A former boss of mine, a CEO with a complex organizational structure, had a useful line: “I can’t make everyone happy here.” He was right, and recognized the futility of trying.
5. Funders rule.
Many nonprofit leaders – both staff and board – defer to the preferences and wishes of their funders, sometimes to the detriment of organizational needs. Funding is crucial, but the job is to build and operate a strong organization. Compromising positions to make third-parties happy may not support this.
We need funders, but funders also need nonprofits. The relationship should be equal and based on shared goals, expectations and transparency. Building mutual respect can take time, but it usually serves all interests well. Funders should understand the challenges and needs of the organizations they support, and will, more often than not, appreciate hearing the real deal, even when it may be messy.
That’s a hard part of leadership. But who said this was going to be easy?