Friday, July 17, 2015

The SECOND Most Important Relationship in a Nonprofit

Note: This blog post was originally published in the July/August, 2015 issue of Nonprofit Colorado, a publication of the Colorado Nonprofit Association

I think we all might agree that the most important relationship in the success of a nonprofit organization is that between staff leadership and board leadership: the president or executive director and the chair. Executive directors MUST prioritize this relationship, and realize that its success – or lack thereof, can effectively trump almost everything else they do. Can an ED on their own effectively recruit high-level board prospects? Can they make peer-to-peer asks of major donors? Can they align trustees to support the most effective strategic direction of the organization? Can they effectively motivate and inspire trustees to perform at the highest level as trustees, and to gently but firmly move them off the board when they are not contributing? I would answer to all these questions almost invariably, no – these functions require leadership from the chair, to be done to their maximum effectiveness. Therefore an effective CEO must devote considerable effort to ensuring the right person is in the chair role, and that they develop and maintain a strong, honest working relationship with the chair. There also must always be strategic focus by both on the chair succession plan.

That said, I believe that in most cases the second most important relationship is between the CEO and their director of development (or VP of development, VP of advancement – whatever title is in use – for this article we will use director of development as a generic term for all). This may seem self-evident, but in my experience it is relationship that is not given enough attention. Recently I spoke to a group of current and past participants in the Institute for Leaders in Development and was asked “what more could be done to strengthen the fundraising sector and help retain quality directors of development in the field?” The original motivation behind the ILD program was to professionalize the development sector in Colorado, and to create a peer learning and mentorship network that would address the challenge of low morale and high turnover in the profession. My answer was “train EDs on how to be strong partners to their development leaders and staff.” All the training in the world of development professionals will have minimal impact if they are not working with CEOs who understand their role and can honestly communicate about development.

So what are the issues that tend to get in the way of a successful working relationship?

Unrealistic expectations – this can be a special challenge for a new development director. There can be an expectation that they arrive like a fairy godmother, and can wave their magic wand and make contributions materialize. Of course, there is a reason the profession is called “development” – relationships must be cultivated over time. Even the most seasoned and accomplished professional will not be able to quickly turn a $1,000 donor into a $100,000 donor overnight, or turn someone totally new to the organization into a major donor. Related to this is the assumption that a top development professional is like a salesman with their “book” of customers who can just bring donors from their previous job to their new one. Of course, they will have donor relationships, but that does not necessarily mean that a donor they worked closely with at a museum is going to have any interest in early childhood education. A CEO must be patient, must understand development is a process and a system, and have the skill and experience to be able to know if their development director is implementing the right strategies and building the right relationships. They also must sometimes help “translate” that understanding to the Board and help the development director educate the board about their role in the process.

Too much emphasis on “credit” for gifts – It can be extremely undermining when a CEO fosters a culture that over-emphasizes who gets credited for a gift. I understand metrics are needed and people need to have goals, but effective development is a team effort. It works best when everyone’s goal is resource development in support of the mission. When a development director works hard to cultivate a prospect and set them up for an “ask” by the CEO (or board member), and then is told that since the CEO closed the deal, or the prospect was already on the prospect list, that they will get no credit for the success of the gift, this is demoralizing and deflating, especially so if it happens repeatedly. The ideal CEO eagerly shares credit, realizing a successful team ultimately reflects on them as well. The successful development director applies this same approach within their team – a major gift that is “triggered” by an event should be considered a result of a team effort that put on an inspiring event, and that perhaps cultivated that donor years, making them ready to act on a major gift.

Insulating the development director from the board – sometimes there is a fear that the development director will not work well with the board or might somehow threaten or overshadow the CEO. To be effective, a development head MUST work closely with the board. If they can’t do it, or can’t be trusted to do it, then they should not be in their role. A CEO should be thrilled to have a development director who can work with the board, not just the development committee, but all trustees. Trustees are a critical component of successful resource development and the development lead must build strong working relationships with as many trustees as possible to be successful.

Not including the development director in Nominating Committee/board recruitment efforts - This is especially true as a board transitions from a working board to a board focused on higher level strategy and resource development - the development director must be involved in board prospect evaluation. Will a prospect fill a development gap in the board? Will they really be able to deliver what they are perhaps promising? Not that their opinion should drive decisions, but it should inform them. A CEO – and board – should welcome the input provided to the process by a development director.

How many directors of development have been demoralized – sometimes to the point of leaving the field, or engaging in frequent turnover – by the challenge of working with CEOs who undervalue them, don’t understand the complexity and nuance of the development function, take credit for their accomplishments, don’t provide the necessary support or staffing? Having been one of those CEO’s for a good part of my career, these lessons are personal and were learned the hard way by me. Hopefully I have not been one of the worst offenders in this area.

I am also a big believer in unifying development, marketing, communications and PR within a single department. In today’s world all these functions are so interrelated it is much more efficient and effective to have them combined. It also improves the development/CEO relationship because development is no longer “competing” for CEO attention focus and budget with these other functions, as they are now integrated. This results in a single senior-level staff relationship around resource development (earned and contributed) as well as communications. Of course, universities and health care have for many years had External Relations departments, but this structure is becoming increasingly more common in other nonprofit sectors, I think for good reason.
Another aspect of the CEO/director of development relationship is the tendency for CEOs to sometimes give lots of leeway to a development professional who “brings in the $” even if they are a poor colleague and/or supervisor. This can be damaging as fundraising is a team effort, and even though someone may be a top performer by the narrow standards of, let’s say, shepherding a major seven figure gift, if they are also creating poor morale in the development team, leading to high turnover and perhaps even alienating other donors, their value may in fact be more than offset by their damage.

The same can be true, of course, of a trustee. Years ago I had to deal with a situation where the largest individual donor to the organization, a trustee and vice chair of the board, was also highly polarizing, alienating other donors, fostering conflict and tension among trustees, and terrorizing staff. She demanded the firing of the development director, after what she deemed to be insubordination – it was true, the development director lost their temper at her, though only after being provoked. This was a demand I ultimately gave in to because I did believe the development director’s lack of self-control was a serious concern, and the resulting ongoing battle with a senior trustee would have made her ineffective in her role. Ultimately, this donor/trustee was moved off the board, a very messy and costly loss, but in the long run it was best for the health of the organization.

So as we celebrate the success of Institute for Leaders in Development, and we as a field look at how we cultivate development leaders, let us think about how we also cultivate nonprofit CEOs who can be strong, knowledgeable, respectful partners with their development leaders. The field, and the people and communities we serve, will be the beneficiaries.

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