How To Evaluate Your Nonprofit’s CEO
Earlier this week we reported on our survey of fundraisers’ appraisals of the fundraising prowess and commitment of their CEOs.
Our fundraisers gave their CEOs pretty low grades!
We asked whether some independent party like Charity Navigator or the Better Business Bureau should rate nonprofit CEOs and Boards — 35% said yes to that idea; but 23% said no, and 42% were not sure.
Warned one pundit: “They haven’t figured out how to accurately and fairly rate non-profits, I wouldn’t sic them on CEOs.” And: “But NOT the BBB, please – are you kidding?!” And: “CN and BBB already fail at rating nonprofits by using a one size fits all approach and I shudder at what they would consider appropriate for CEO and Board evaluation.”
And finally: ” I am all for having independent reviews of nonprofit organizations. However, I do not believe Charity Navigator or the BBB are sufficiently knowledgeable or qualified in this area. Perhaps AFP or the Center for Philanthropy at IU would be better qualified.”
OK, point taken!
However, that aside, we received a heap of comments on that question, which included these interesting suggestions:
“Each organization needs an ‘enhance the CEO’s fundraising abilities’ plan.”
“Are they truly living up to their expectations and what they have said they would accomplish? The board really needs to look, see, and understand what’s going on internally at the organization.”
“It’s a complex question. I think discussions around authentic ’360 degree accountability’ are important, but in practice not always effective, so exploration of independent ratings (whether by a foundation, the better business bureau, or even state/national nonprofit associations) may be in order.”
“Boards should evaluate the CEO, but need to know the true picture; most of them don’t. It would be great to have an outside evaluator of boards, but who that would be is a huge question.”
“CEOs need to have concrete written objectives their board hold them accountable to measure their performance. As it stands now, most boards aren’t holding the CEO accountable and base their performance on how well they like them vs. how well they’re leading the organization.”
“I like to believe that if we educate our donors about what high functioning organizations look like and give them a ruler by which to gauge the other organizations they support, the informed donor will evaluate with their giving. But then again, I was convinced the recession would result in a “thinning of the nonprofit herd” and that obviously hasn’t happened.”
“Our CEO has a phenomenal understanding of our mission and purpose, and constantly steers the organization in programmatic directions that prioritize mission over everything else. If there were some way to qualitatively assess the CEO’s commitment to an organization’s purpose, I think it would be the truest test of their value as a leader.”
“It would be great for leadership to hear honest evaluative feedback from development staff–but, admittedly, this seems like a Catch-22. If the leadership is open and collaborative and willing to listen to staff feedback, they are probably doing a pretty good job supporting fundraising. If the CEO/Board are not open, staff will not be willing and/or able to provide honest feedback, either for fear of reprisals or because the institutional culture is such that the CEO/Board literally doesn’t make an effort to listen to their development staff.”
“Results are the best indicators of performance, and these results would include: sustainability of programs, number served by the organization, board engagement, staff turnover, among other factors.”
“Benchmarking other organizations with similar missions.”
“National fundraising bodies – like CASE, AFP, Institute of Fundraising (in UK) should do this, surely!”
“The association, Maryland Nonprofits, has a ‘Standards for Excellence’ evaluation tool that incorporates board governance and staff management.”
“Doesn’t AFP have a set of standards for this type of evaluation?” [We're checking.]
So, there’s both a question of what standards to use, and who should apply them. Even though there’s a great deal of skepticism expressed about their ability to do the job, most respondents do seem to believe CEO evaluation is a prime Board responsibility. The skeptics question Board independence (“the CEO really runs the show”) and the Board’s informed competence.
Typical of that viewpoint:
“I like Kim Klein’s idea of throwing out the entire volunteer board management structure and replacing it with something revolutionary and better. If we had a credible board structure of seasoned, committed professionals in charge to begin with, it would be easier to rate them. As it is, their skills sets are all over the map, and being on a charity board is always far down the list when it comes to a person’s life priorities (their families and real jobs come first and, moreover, they should).”
Where does that leave us?
Some fundraising-related entity needs to develop the “Gold Standard” set of CEO evaluation criteria and recommend a methodology for applying them. Maybe some kind of “independent auditor” should do the task, reporting to the Board directly.
Does any reader out there believe your nonprofit has nailed this? Speak up.