5 Ways a Nonprofit Board Can Prepare to Hire Its First Executive Director

There are over one million 501c3 nonprofit organizations in the United States, but only about half of them have paid staff, and only about one-third of nonprofits have an Executive Director or CEO on staff. Hiring the first Executive Director (ED) is therefore a significant milestone for any nonprofit organization.

I have been the first Executive Director for a nonprofit, I have been on the Board of Directors that hires its first Executive Director, and I have led searches for nonprofit organizations hiring their first Executive Director. These experiences have taught me several lessons.

The following are 5 recommendations for a nonprofit Board as they prepare to navigate through the crucial process of hiring their first Executive Director:

1. Conduct a Readiness Assessment: Make Sure Your Organization is Ready for an Executive Director.

The decision and process of hiring the first Executive Director must be intentional. Ideally, a Board decides to hire an Executive Director in order to maximize impact and opportunity rather than because they are burned out. Before hiring an Executive Director, the Board must assess whether the organization is truly ready for this transition. A special committee should be tasked with writing a report on the nonprofit’s readiness for an Executive Director by answering the following questions.

• Is funding available to support the compensation necessary for an ED?

The position will be much more appealing to potential candidates if funding has already been received or secured for at least the first year. It will take time for the Executive Director to develop relationships with funders. The longer runway the ED has, the more strategic they can be about implementing a fund development plan.

• Is an Executive Director really the position you need?

Some nonprofit organizations might decide to first hire a membership director, volunteer coordinator, part-time bookkeeper, or administrative assistant. If you have strong operational leadership on your Board but need paid staff to keep you organized and take day-to-day direction from the Board, an Executive Director might not be the position you need to hire. One way to assess the staffing needs of the organization is to survey the Board, volunteers, and/or other stakeholder to determine what duties they envision being taken over by an Executive Director.

• Are you ready to move from a working Board to a governing Board?

The dedicated volunteers leading the organization might have trouble letting go of operational decision-making authority. You don’t want your new ED to feel undermined by volunteers, but you also don’t want to lose the commitment of volunteers/board members. Your transition plan should set milestones for the evolution of the Board’s role and the Executive Director’s role. For example, this plan might state that after the first month on the job, the Board Treasurer will transfer expense approval authority to the Executive Director. The Board and ED can use this transition plan as a guide to shift from a working Board to a true governing Board.

2. Write a Position Profile: Define the Role & Responsibilities.

If your readiness assessment suggests that your organization is ready for an Executive Director, the next step is to create a thoughtfully written position description. It should summarize the responsibilities of the role as well as the desired qualifications and attributes. View our “Sample Nonprofit Executive Director Position Description“. Careful consideration should be given to the role of the ED. The Board of Directors should also decide which responsibilities will remain with them and which will transition to the new leader. It can be helpful to send a survey to board members, volunteers, and other key stakeholders to gather feedback about the attributes desired in the organization’s first Executive Director.

3. Determine a Salary: Conduct Research to Confirm the Range.

The Board should research the salaries of Executive Directors of other nonprofits in the community. Nonprofit 990 Tax Returns typically include information about the salary earned by the highest paid employee. A review of salary ranges currently listed on nonprofit job boards can also provide useful data when deciding on the salary range.

4. Form a Search Committee: Identify Members to Engage in the Hiring Process.

Most Boards will appoint a subset of its Directors to form the Search Committee. (Read more about “Forming a Search Committe to Hire a Nonprofit Executive Director“.) The role of the Search Committee is to post the position, recruit candidates, screen and interview candidates, and make a hiring recommendation to the full Board. In many cases, the Search Committee’s job is to recruit a strong and diverse group of candidates and then narrow the field down to a small number who then interview with the full Board. Because the decision to hire an Executive Director is so important, the full Board should have a role in the final interview process and hiring decision. The Search Committee will also be charged with conducting reference checks and facilitating background checks. The role of the Search Committee can be extremely time consuming. For that reason, your nonprofit should consider hiring a search firm to lead the process. Here are “12 Critical Questions” for nonprofits to consider when hiring a search firm.

5. Support Onboarding & Transition Planning: Promote Long-Term Success & Retention.

The organization’s first Executive Director is likely its only employee. Speaking from personal experience, this can be a lonely and overwhelming feeling. It is therefore important that the ED feel supported by the Board. A Transition Committee can help the ED cultivate strong relationships with external stakeholders while also running interference in order to prevent overbearing board members or volunteers from disrupting the new ED’s chances of success. This transition committee should be responsible for leading a structured onboarding process. Read more about “The Importance of Leadership Transition Support After a Nonprofit Search.“

Hiring the first Executive Director is a critical step in a nonprofit’s evolution. It means the organization has outgrown its purely volunteer nature. This is an exciting time! Taking the time to get this process right will result in a new stage and a greater impact on its mission to the community.

The Moran Company has partnered with nonprofits hiring their first leader. Contact us today for a free consultation to learn more about our nonprofit executive search services. We are happy to help!

By Mike English, M.P.P.
VP for Search Strategies & Senior Search Consultant
The Moran Company
“We Find Great Nonprofit Leaders”