This third Daring to Lead brief examines the paradoxical nature of board and executive director relationships. Key findings include:

• While executive directors tended to give boards relatively high marks when asked about overall performance, their responses to more speci­fic questions often contradicted that assessment—and suggest that boards are neglecting critical governance responsibilities.
• Despite these board performance challenges, most executive directors are not spending a signi­ficant percentage of their time working with and supporting their boards.
• Executive directors who spend more time working with their boards demonstrate higher satisfaction with board performance.

Read more and download a PDF of Brief 3 either by clicking the button below or using the free alternate download via MediaFire.com.

This second Daring to Lead brief provides a window into the executive role to better understand the underpinnings of job satisfaction and learn more about a leader’s day-to-day work. Get a downloadable PDF of Brief 2 either by clicking the button below or using the free alternate download via MediaFire.com.

Leading through a Recession, the first Daring to Lead brief, explores the main report’s recession impact findings in greater depth. Get a downloadable PDF of Brief 1 either by clicking the button below or using the free alternate download via MediaFire.com.

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These are just some of the key findings from Daring to Lead 2011, a national survey on nonprofit executive leadership. Be sure to download the full report in PDF for more findings and corresponding calls to action for nonprofit leaders, boards of directors, and funders.

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Chang provides a thoughtful, compelling argument that executive directors should stop scapegoating the economy and under-performing boards of directors for fundraising challenges and start taking responsibility for raising enough money to sustain their organizations—beginning with a genuine interest in the actual work of fundraising.  I could not agree more that fundraising is a core part of any executive’s job and EDs need to allocate sufficient time to those activities.  As the report says however, there are other forces at play–namely the difficulty of “developing a sustainable business model that fully finances a nonprofit’s desired impacts and allows for strategic organizational development and growth over time.”  Certainly, without fundraising enthusiasm an executive is likely to be even more daunted when faced with sustainability challenges, but fundraising will only go so far without a viable business model in place.  Raising funds for an organization that is hemorrhaging money as it tries to sustain a broken business model is not likely to be successful in the long term.  It might temporarily pull an organization out of an economic crisis but doubtful will it build-up a healthy operating reserve so as to avoid one in the future.

So whose job is it to develop and maintain a sustainable business model for the organization?  I suspect that Chang would say, It’s the ED, Stupid!  What do you think?

Check out Curtis Chang’s post here and add your perspective by commenting on this discussion.

These are the key findings from Daring to Lead 2011 related to the impact of the recession and organizational financial sustainability. For more information, download the full report in PDF and Leading Through a Recession: Daring to Lead Brief 1.

Recession Impact on Succession—One in six executives surveyed is 60 years or older, and of this group, 22% reported that a loss in their retirement savings contributed to a transition delay. Across all age groups, 12% reported that a shrinking job market contributed to delay. And, 9% report that reduced funding and the resulting instability of their organizations contributed to delay.

Recession Impact on Organizations—The majority of organizations were negatively impacted by the recession. Eighty-four (84%) of leaders reported negative organizational impact, though its intensity varied widely, with one in five executives describing the negative impact as significant. In the fourth quarter of 2010 when these data were collected, 26% of organizations had downsized; that is, were operating with a budget smaller than the previous year’s. More than one third of nonprofits (34%) were operating with a budget larger than the previous year’s.

Recession Impact on Executives—Sixty-five percent (65%) of executives reported significant levels of recession-related anxiety. Thirty-three percent (33%) of executives with less than one month of reserves reported high recession-related anxiety, compared with 15% among executives with six months or more. Recession anxiety was strongly associated with executive burnout. Overall, 9% of executives described themselves as very burned out, compared to 19% of leaders with high levels of recession anxiety.

Operating Budget Size

Operating Reserves—Almost half of executives (46%) reported cash reserves of fewer than three months (the prevailing wisdom is that organizations should maintain reserves of at least three to six months).

Government Funding Compared to Other Sources—Nonprofits that rely on government contracts for more than 50% of their operating budget—typically those providing direct human services—are even more vulnerable, with 55% operating with less than three months reserves compared with 42% among those with different funding models.

Among three income sources—individual donations, foundation grants, and government contracts—government contracts were most likely to comprise 50% or more of an organization’s budget. More than one in four organizations (28%) was majority government funded, and these groups tended to have smaller cash reserves. Fifty-six percent (56%) of nonprofits that are majority government funded—typically those providing direct human services—reported an operating reserve of less than three months, compared with 42% across all organizations.

New Leaders and Leaders of Color — The recession and business model challenges are disproportionately affecting new leaders and leaders of color. Thirty-two percent (32%) of executives in their first year on the job have less than one month of operating reserves. Twenty-eight percent (28%) of people of color-led organizations were severely impacted by the recession compared with 18% of white-led nonprofits. This is in part because people of color are more likely to run heavily government-funded organizations; 34% of leaders of color run nonprofits whose budgets are comprised of 50% or more government contracts compared with 27% of white executives.

Executive Financial Analysis Skills—A significant minority of executives are not deeply financially literate. When asked how comfortable they are with financial analysis, 40% assessed themselves as having only moderate literacy. Similarly, when asked whether their role in finance energizes or depletes them, a significant minority described their role in finance as depleting (7%) or somewhat depleting (32%).

Board Engagement in Sustainability —Executives reported relatively high levels of financial oversight compared with other potential aspects of board engagement such as fundraising or public policy; 73% of executives said they had someone on the board providing significant effort to support the organization in financial oversight compared with 47% in fundraising and 32% in public policy. Thirty-nine (39%) of leaders reported that they do not have board engagement in strategic decision-making.

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These are the key findings from Daring to Lead 2011 related to professional development. For more information, download Inside the Executive Director Job: Daring to Lead Brief 2.

Effectiveness of Strategies Used—Of all professional development strategies utilized, executives were most likely to rate executive coaching, peer networks, and leadership programs as very effective.

Mentorship—Thirteen percent (13%) of executives reported that they are in an explicit mentoring relationship (as the mentor) with another executive director.

Coaching—Ten percent (10%) of leaders were currently working with an executive coach.

Funding—Eighteen percent (18%) of executives reported receiving philanthropic support for their personal development within the past three years.

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These are the key findings from Daring to Lead 2011 related to boards of directors. For more information, download The Board Paradox: Daring to Lead Brief 3.

Board Performance—More than two-thirds (68%) of executives were somewhat satisfied with their boards’ performance, and of those nearly 20% were very satisfied.  The remaining respondents–nearly a third–were either very unsatisfied or only a little satisfied. Among all respondents, the largest number (48%) were only somewhat satisfied with board performance.

Thirty-eight percent (38%) of executives were very confident that their own efforts could influence their boards’ performance.  Just 6% reported that they had no confidence in their ability to do so.

Board Chair Relationship—Most respondents felt positive about their partnership with their board chair. A majority (52%) described the relationship as functional, and a large number (38%) described the relationship as exceptional. Only a small minority (9%) reported a dysfunctional relationship.

Performance Evaluation—Forty-five percent (45%) of executives did not have a performance evaluation last year.  Among the majority of executives who did have a review within the past year, just a third (32%) said it was either somewhat useful or very useful, with the remaining two thirds reporting that it was only a little useful (53%) or not useful at all (15%).

Board Support—Nearly three-quarters (73%) of executives reported strong support from board members in the area of financial oversight. However, nearly half (44%) have not achieved 100% giving.

Executives reported lower participation rates than in other areas of board responsibility, with the exception of board members making a personal contribution (71%).  Fewer than half of respondents reported strong board member participation in donor identification and prospecting (48%), asking for gifts (42%), and donor cultivation (41%).

Time Spent on Board Work— The majority of respondents (56%) reported spending ten hours or less per month on board-related activities which translates to just six percent of a full-time executive director’s time. Only about 17% of respondents reported spending 20% or more of their time on the board.

Among executive directors who spend ten hours or less per month on board-related matters, only 17% said they were very satisfied with the board’s performance.  Of those who spent more than ten hours per month working with the board, 23%—nearly a quarter—were very satisfied with board performance.  More than a third of respondents (36%) said they needed to spend more time on the board.

Executives who spend more than 10 hours per month working with the board were more likely to have had a performance evaluation within the past 12 months, and were much more likely to report that the evaluation was very useful.

Policy & Advocacy — Eighty-five (85%) of executives spend some time on policy and advocacy related activities.  Of those, 47% believe they do not spend enough time in this area. Regardless of the mission type of an organization, if it receives a majority of its revenue from government contracts, the executive was significantly more likely to be engaged in policy activities. Four percent (4%) of executives leading majority government funded organizations said they did not need to spend time on policy and advocacy, compared with 18% leading non-majority government funded organizations.

Executives’ on Boards—Forty-nine percent (49%) of executives were currently serving on a board of directors for an organization other than their own.

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Note: Other studies have found that executives who spend 20% of their time on board-related activity have high rates of satisfaction with board performance.