More and more boards are hiring fundraisers to become their CEO. Most often this happens when the fundraisers are promoted from within, a board wants to transform its fundraising, or the patron of a startup wants to put fundraising front and center. And while hiring a fundraiser to the position of CEO is not always advisable—for instance, such a career path rarely makes sense at a higher education institution or hospital—it’s an emerging trend worthy of consideration due to a simple fact: CEOs must now drive fundraising to be successful in a competitive marketplace.
Let’s assume your CEO candidate has been a successful fundraiser, demonstrates vision and leadership, and communicates a genuine commitment to your mission.
Here are some guidelines to keep in mind, as well as steps to consider, to ensure the successful transition from fundraiser to CEO. And one note to be aware of: though I use CEO throughout, I’m referring to all number one positions that report to a fiduciary board, including Executive Director, Head of School, President, etc.
Double down on the references from senior management
Does the CEO candidate see the whole field, or do they have tunnel vision solely for fundraising? One excellent way to know for sure is to speak with their colleagues. Was the Chief Financial Officer able to rely on the CEO candidate for credible data and timely forecasts? Do program staff feel appreciated and respected by them? Were they not highly successful as a fundraiser and that’s why a CEO role appeals to them? Seeking this candid input from the candidate’s peers will help you determine if the fundraiser can make the leap into the CEO role successfully – and if they’re making the transition internally, it’ll help strengthen the trust and support of others at the organization.
Expect it to be costly (because it’s a good investment)
Fundraisers’ salaries are skyrocketing at a faster pace than CEOs’. If they are any good as a fundraiser, then expect them to adeptly negotiate for their own higher salary. Most likely the new CEO will also want to hire or promote a great fundraiser to report to them within the first 12 months. Since good fundraisers are often change agents, anticipate that your new CEO may want to explore new technologies and rethink existing roles and systems. These undertakings can be costly and time-consuming, but if they are successful, no one will remember in 5 years!
Let them re-design the job with you
I have placed and been in communication with more than 20 fundraisers who were the first to make the transition to CEO at their organizations. You and your new hire may be venturing into new territory. There are no certifications, workshops, or books that focus on the transition from fundraiser to CEO. The job description and interview discussions should serve as a starting point but expect it to take time to fully map out the role. Plan to sit down with your new CEO after 3 months to redesign the job as needed; by then, you will have more information and a greater trust in each other.
Try on bonuses for size
I’m not referring to any bonuses that could be considered a tax on a donor’s gift. Instead, a goal for overall fiscal performance could be the basis for an annual or multi-year bonus. Consider annual bonuses perhaps as high as 10-15% of the annual base to help meet compensation expectations and retain your good leader. Keep in mind, new types of bonuses have reverberating impacts for HR and pay equity. Also, the design of the incentives and how to measure them can be sticky with unintended consequences. Instead of agreeing at the start about a specific bonus, it may be best to wait 3 months, so all parties have a better sense of the metrics, goals to achieve and the process.
Manage expectations – of everyone involved
While the Board/search committee will have spent time acclimating to the idea of hiring a fundraiser as the new CEO, the decision will inevitably lead to questions from the larger organization and community. For example, if the new CEO is promoted from within, others may wonder whether the new CEO truly possesses the range of skills and expertise required of the position. It’s up to your Board to be communicative about why the hire was made and the certainty you possess in their ability to succeed. It will help if other candidates have been interviewed so that everyone feels confident that due diligence was practiced.
You’ll also need to manage expectations regarding finances. Since the budgets for the CEO have been inherited—and often predicated on less ambitious goals—you will likely need to revise old assumptions and make adjustments to help ensure success.
Finally, manage your own expectations, too, and don’t expect your new CEO to bring donors with them! It’s a surprisingly common misconception I’ve encountered over the years. Remember, donors are supposed to be committed to the institution and mission they support, not the fundraiser. In addition, many excellent fundraisers consider this an ethical issue, so if you press the point, they may turn away. But it’s not just a philosophical issue. What would your response be if after 10 years your CEO left with all your best prospects?!
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Do you have any comments or questions on this topic? It would be great to hear from you. Please reach out to me at firstname.lastname@example.org.