10 key challenges for not-for-profit sector CEOs (and how to solve them)

Being the CEO of a charitable organisation is exceptionally rewarding, but also uniquely demanding. Many of the challenges we face may sound familiar to corporate leaders too, but the differences are of huge significance.

I have put my Top 10 challenges into four categories: purpose, people, pennies and personal. All four are vitally important and, of course, they interact. As CEO you can’t afford to put any of them on the back burner for long if you don’t want the challenges to turn into crises.

Purpose

…is what our organisations are all about. We are not there simply to make money, keep people in jobs or build our reputation or brand, though all those can have their place – if and only when they serve the social charitable purpose of making the world a better place for those the charity exists to serve.

A key role of the CEO is to ensure that there is a clear and agreed purpose and a strategy for achieving it. One of your roles is to be the face of that purpose, its strongest and most passionate advocate, internally and externally.

People

The organisation can only achieve its purpose through the people who believe in it and are committed to it: staff, volunteers, Trustees, supporters, donors, partners… As CEO you have to lead and inspire these people, look after them, empower them and build their capacity to make the difference you want to see.

One super-important group of people here is your core leadership team, who need to be working alongside you in every dimension as a unified group. And you need to work with your Trustees – governance is their responsibility but leadership is a shared one and, as part-time volunteers, they take on huge responsibilities and rely on you to help them do the job as well as possible.

Perhaps (no, certainly!) the most important aspect of your leadership is to build a culture that supports your people and your common purpose. Whenever things go badly wrong in charities (or any other organisation), problems of culture are usually at the heart of the problem; and when things go well, a clear, explicit, agreed and positive culture is most often a key factor for success.

Pennies

Our sector is full of inspirational people and organisations who achieve amazing things on a shoestring, but there is no doubt that the more resources you can apply, the more you can achieve – as long as you remain focused on your purpose and put the pennies to work strategically.

As CEO you can’t fully delegate responsibility for raising and spending money – you have to keep on top of both and understand enough to ask the right questions and provide support for your teams when they need it. You have to ensure that there is a clear strategy for mobilising resources, that adequate systems are in place to provide financial security, and that risks are managed appropriately.

Personal

And finally, you have to look after yourself. As other Action Planning consultants have written this month, being a CEO can be a lonely place. There will be times when you may lack the confidence you would like to convey, and you have to manage your personal time and your work/life balance. No-one else will do these things for you and if you pay them too little attention the organisation and its purpose will suffer.

Where can you get the support you need? How can you maintain and develop your knowledge and skills? How can you manage your time, avoid burn-out and set a good example to others?

Top 10 challenges for charity CEOs

So here is my Top 10 and how to take them on:

1.     Strategy: Your cause is why the organisation exists, but does everyone agree what it is? Or how best to deliver it? Defining and agreeing an inspiring statement of purpose is the beginning of strategy. Many conflicts arise from differences in belief about why you exist and what you should be doing. A good strategy process brings these differences into the open and resolves them so everyone can get on with delivery. Is your strategy up-to-date? Does it adapt to a changing external environment? Does it sit on a shelf or is it a daily reference point? As CEO it is your job to lead the development and implementation of strategy.

2.     Advocacy: A cause can be delivered by a variety of means, including the provision of direct services to those you serve, building partnerships and spreading the message. But you are sure to find that there are social and political opportunities and obstacles that impact on the needs you aim to meet. You are experts in your field and have a duty to advise, to share knowledge and to seek to influence relevant social norms and policy. As CEO you are the chief advocate for your cause and the face of the organisation. What resources do you and should you invest in advocacy relative to service provision? And what is the best way to go about it consistent with the restrictions of charity law?

3.     Culture: Do you have clarity about the culture of your organisation? Is it what it needs to be? If you haven’t already, why not initiate a project to engage everyone in defining a culture they can all understand and get behind and which will enable everyone to work together to achieve the charity’s goals, safeguard everyone’s wellbeing and bring people together. You will need to lead this personally and you and your leadership colleagues will need to model the agreed culture and values every day.

4.     Leadership: You are a leader, but leadership is also a collective responsibility and needs to be nurtured and developed among all those who are, or aspire to be, leaders in your organisation. In particular, your core leadership team must act as a united group who share responsibility for the whole. They are not a group of functional managers who only take responsibility for their own areas, but organisational leaders, alongside you, who must model the culture, advocate for the purpose and bring their perspectives to help ensure the right decisions are made.

5.     Staff development: The skills of your people are the fuel that drives the engine of your organisation. Are you investing enough resources and effort, and personal commitment, into developing those skills? Staff development is also key to staff retention and motivation. Your personal belief in supporting your staff and volunteers to build their skills and capacities can be inspirational.

6.     Governance: You share responsibility with the Board for the governance of the organisation. You are the Trustees’ key advisor and informant. Good communications, especially with the Chair, are a must. You should also take shared responsibility for ensuring that the organisation is adhering to best practice and that the right skills and diversity are present among trustees.

7.     Fundraising: Some CEOs allocate little of their time and energy to fundraising. This is a mistake for many reasons. Your supporters, especially philanthropic donors and corporate partners, expect to have a relationship with the CEO. Your fundraisers will be looking for your support and encouragement. Clearly there are many differences among charities as to their income mix, but I used to reckon to spend 10-20% of my time on fundraising, from attending events, to meeting large donors, to sitting down with fundraising teams and asking how I could help them. And there are many key strategic decisions to be made in which you need to be a participant – especially how much to invest in what channels.

8.     Risk: In considering your culture you will no doubt have a discussion about whether your organisation is risk-averse and conservative or risk-embracing and innovative. Where you sit on this spectrum will differ for different kinds of risk, but it is well worth writing down a statement of your “risk appetite” to guide strategic decisions. And building risk analysis into all significant organisational projects so you are aware of the risks and can think about how best to manage and mitigate them. Risk is, in the right circumstances, something to be embraced rather than avoided (which, of course, is not possible). The world changes around you and new opportunities and challenges arise. If you want to keep up, or even get ahead, you’ll have to take some risks. But choosing which ones to take and how best to manage them will be a key to success.

9.     Self-care: While you are juggling all these challenges, you need to look after yourself. A stressed and burned-out CEO will be no good for your cause. And it is important to set an example for others. As a CEO I often made a point to avoid staying late in the office and encouraged others to protect their work/life balance. Make sure you take all your holidays – a well run organisation can manage without you for a few weeks! And think about where you can get support when you need it. Having a coach or mentor you can speak to regularly is a very sound investment.

10.  Managing your time: It seems as though there is always too much to do, too many things on your plate, a to-do list as long as your arm and an email inbox that is always filling up. Don’t despair, there are some brilliant time management techniques that can really make a difference to your success and wellbeing. Don’t try to solve the problem by working all hours and cutting back on sleep! Rather, it is all about prioritisation, delegation and efficiency. Delegate what you can and trust your colleagues; prioritise ruthlessly (as easy as A, B, C?); and don’t try to be perfect – good enough is good enough.

If you need help with any of these challenges, then you should get help. Action Planning has experts ready and willing to help in all these areas, be it strategy development, advocacy initiatives, organisational culture, leadership development, training, governance reviews, fundraising, risk management, coaching and mentoring or time management. You don’t have to do it all on your own.

We’re here to help.