January 2019 – Rick Szilagyi, Principal

The small nonprofit faces many challenges, not the least of which is nonprofit sustainability – the ability of the organization to sustain itself over the long term, perpetuating its ability to fulfill its mission.  After the initial volunteer board or the “resurgent” volunteer board has run out of steam, whether it is weighed down by time or money or both, executing the mission is a huge challenge.  And the challenge is made more difficult by the sharp decrease in volunteerism nowadays – less people are willing and able to step up and donate their time.[1] [2]

It is not unusual for a small nonprofit to reach the conclusion that they need to hire an Executive Director to address their organization’s needs.  Compiled data from 2014 shows that for nonprofits with an annual budget of less than $500K, the average E.D. cost was about $62K before perks and benefits.[3] [4] [5]  That number is higher in the Northeast, and higher with increased education and experience.  $62K+ is a non-starter for many small nonprofits, especially if the budget is considerably less than $500K.

A part-time E.D. can address the shortfall in budget necessary to hire a competent, full-time E.D.  “Fractional” is a more up-to-date term relative to hiring a part-time executive.  Fractional CFOs, CIOs, etc., have become mainstream, with the important understanding that these professionals are working executives, and not consultants.[6] [7] [8]  This is not a slam against consultants.  I am merely making sure that the understanding is that a fractional, or part-time, or interim E.D. is actually there to do the work that the title conveys.  More than advising you how to do the work, they actually do the work.

If your organization is feeling the pain of too much work falling onto the shoulders of the volunteers, or a shortage of experience and expertise, consider reaching out to a professional E.D. who is utilizing the model of working for several organizations, sharing the cost, and sharing the wealth of experience and expertise. 

[1] Kaitlin Ahmad, “Fewer Americans Are Volunteering and Giving Than Any Time in the Last Two Decades.”

[2] Sarah D. Sparks, “Volunteerism Declined Among Young People.”

[3] Glassdoor, Inc., “Non Profit Services Executive Director Salaries.”

[4] Dr. Kelly S. Meier, “The Average Salary of a Non-Profit’s CEO.”

[5] The NonProfit Times Publishing Group, Inc., “2014 Nonprofit Salary and Benefits: Operating Budget and CEO Pay.”

[6] Spencer Creal, “Is It Time to Hire an Executive Director?”

[7] Charmaine Coimbra, “How to Tell if it’s Time to Hire a Nonprofit Executive Director.”

[8] Kristie Frankhauser, “What’s the Difference Between Interim, Fractional, Project and Part-Time Executives?”

The Lexian Management newsletter is for informational purposes only.

Always consult your attorney, accountant, and/or insurance provider to obtain advice with respect to any particular issue or concern.