Nonprofit Startups: Two Sides to Every Coin

When you start a nonprofit organization things can seem quite simple at times. You have an idea and gather a group of like-minded people to work on that idea. Everyone pitches in and helps in some way, whether it’s working on small day-to-day tasks or making strategic decisions about the direction of your organization. Usually it’s the same people dealing with the trivial and the big picture, and while you may be lucky enough to have some experienced folks on your team, it’s just as likely that you’re making things up as you go. Don’t worry. That’s perfectly normal.

And as a founder, you’ll probably find yourself wearing multiple hats. Specifically, you’ll need to be the visionary strategic thinker who is not afraid to steer the organization in a radically new direction when needed, and you’ll be the person who makes sure the myriad daily tasks are getting done. Your feet are firmly rooted in the ground while your head is way up in the clouds. And that also normal while your organization is forming. You need to be both.

As your organization grows, however, you’ll attract experienced people and learn from your own successes and mistakes. You’ll find it’s useful to start specializing a bit, having some people focus on certain aspects while de-emphasizing others. The most fundamental divide will be between operations and governance. In established nonprofits, operations (the day-to-day stuff) is executed by paid staff and volunteers. The governance work (including strategic planning and high level decision making) is handled by a board of directors, usually made up of volunteers, who work closely with the executive director (ED). The ED in turn oversees the paid staff and volunteers.

Assuming your organization gets to that point (not all do), this gives you as the founder a particular choice. Will you move forward as the leader of the governance arm of your organization or as the leader of the operations arm? Practically speaking, is your next position going to be the chair of your board of directors or the executive director? As your organization grows you really can’t (or shouldn’t) do both, so you have to choose which to take responsibility for and which to let go.

This letting go bit is important to emphasize. A properly run nonprofit organization needs the checks and balances that this division provides. The governance role of the board is to look at the big strategic picture without getting mired in the details of the day-to-day work. This allows them to make decisions that could change the direction of the organization. People embroiled in the front line work often can’t get the perspective needed to change the organization’s direction when needed, and so they need to be challenged by the folks with a big picture perspective. On the other hand, people surrounded by the actual work of the organization often have the best understanding of what works on the ground. So there’s a need for solid communication between the two sides of this nonprofit coin. The ED helps provide this, and in many organizations there are other ways both sides can understand each other’s’ perspectives before acting.

But still, you will need to choose, and typically this choice needs to be made when you hire your first staff and your “hands on” working board begins to change to a governing board.

Nonprofit founders need to choose between joining the board or joining the staff. Click To Tweet

On the one hand, you can choose to be the staff member, often with the title of executive director. This is usually accompanied with a paycheck, which is nice and in fact might be the deciding factor in your decision. But in this case, you also step down from your role in governance. You will need to work closely with the board, and in many ways, you’ll discover that the board, as a group of volunteers, needs to be managed like your organization’s other volunteers. You’ll need to understand the board members’ motivations, their strengths, their weaknesses, and so on. You’ll need to help them keep track of their commitments and provide them with whatever resources they need to complete their work. But in spite of all this management work in relation to the board, you need to remember what you have given up. You are not their boss; you’re their support system. It’s their job to supervise you, and that means they should be giving you direction and feedback, and the bottom line is they have the right to fire you. That is, if you choose this role, one possibility is that you can create an organization, attract a core team to run it, pour all your blood, sweat, and tears into it, only to lose it entirely based on someone else’s judgment.

If you choose the other path, you’ll take a position on the board of directors, perhaps as its chair. In this scenario you’ll work with fellow board members to hire the ED, and manage that person’s performance. Beyond that, you don’t get a say on how things get done. You don’t hire the other staff. You don’t decide implementation details for your programs. Instead, you look at things from a 10,000 foot view. You approve the creation of new programs and the shelving of old ones. You review, tweak, and approve the budget, but the ED figures out how to spend each line item. You set the ED’s salary and decide whether they deserve a raise and if the organization can afford it. You hold ultimate fiduciary responsibility to guide the organization on behalf of the public. It’s also likely that your time serving on the board will be limited by your bylaws provisions about term limits.

In a well-run organization these two sides work closely together, but they must remain separate.

As a founder of a nonprofit organization, have you thought about which role you want to take on, and what you’re willing to give up? I’d love to hear what your plans are. If you’ve already navigated this transition, I’d also appreciate hearing how it went. Please comment on the blog post, or shoot me an email.

Do you know someone who’s thinking about starting a nonprofit organization? Please share this article with them.

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