ESC’s mission is to provide professional, affordable consulting services to Triangle nonprofits, in order
to help them achieve their missions.
ESC will be the most highly regarded, most sought after, and most accessible consulting organization for
Triangle nonprofits.
ESC’s consulting services can help nonprofits better achieve their missions.
ESC’s consultants are dedicated and able professionals who bring a wealth of skills and experience
to serve our clients.
ESC believes in utilizing the talents of experienced executives and professionals to serve our clients.
ESC will undertake only those assignments for which our consultants are fully qualified.
All client work is confidential.
ESC will serve clients regardless of their size or their ability to pay.
ESC seeks to serve culturally diverse clients and to attract culturally diverse consultants.
Background and
Executive Service Corps of the Triangle (ESC) is a nonprofit
organization established in 1987 to provide management assistance
to other nonprofit organizations in Durham, Wake, Orange and
Chatham Counties of North Carolina.
Relationship to
National and
ESC of the Triangle is affiliated with the Executive Service Corps
Affiliate Network of 32 organizations nationwide that provide
management consulting assistance to nonprofit organizations.
ESC provides coaching, consulting, facilitation and various
professional and leadership development programs to 63 - 70 clients
each year. Our clients are nonprofit organizations—including the
arts, education/culture, Latino, faith-based, healthcare/social
sciences, and environment/energy. (Most are designated as charitable
or 501(c) (3) in the IRS code.)
Board of
ESC has a volunteer Board of Directors, which operates as a
governing Board.
The Executive Service Corps staff includes Trudy Smith, Executive
Director; Kate Mazza, Associate Director; and Terri Buchanan,
Administrative Assistant and Bookkeeper.
40% from consulting, coaching and training fees.
55% from government, private foundation grants, and corporate
giving from organizations such as the Triangle Community
Foundation, Wachovia Wells Fargo Foundation, Fox Family
Foundation, Duke Energy, Strowd Roses Foundation, Durham
Merchants Association and the BIN Foundation.
5% comes from individual contributions and event income from
the Board of Directors, consultants, volunteers and supporters.
ESC is patterned after the International Executive Service Corps,
which has utilized managerial skills of volunteers in over 90
Client Fee Policy
ESC has a policy that we will not provide services free. There is a modest
fee for our services. The basic reason for this is two fold:
The need for income to cover operating costs
Experience has shown that clients pay more attention to our
recommendations if they pay for them
The fee is established by the CRM and the Executive Director (ED)
working together.
The fee charged is based upon:
The estimated hours for the engagement
The complexity of the engagement
Intangible factors
The client is expected to pay half the fee when returning the signed letter
of agreement to the ESC Office, and half upon the completion of the
For those nonprofits in a financial bind, ESC does also offer
“Scholarships” that cover a portion of our fee. These scholarships are
funded by a number of Triangle foundations and organizations.
Only the ED can approve the use of scholarship funds.
1. Operations Organizational Chart
2. Board of Directors
3. Consultants
Executive Service Corps of the Greater Triangle
Board of Directors Organizational Chart
ESC Board of Directors
Vice Chair
Chair, Board Development
Executive Director (ex officio)
Executive Service Corps of the Greater Triangle
Organizational Chart ~ April, 2013
ESC Board Committees
Executive Committee
Chair – Dave Gettles
Vice Chair – Dave Pottenger
Treasurer – Tom Cogswell
Secretary – Don Wells
Board Development –Gracie Johnson-Lopez
Trudy Smith (ex officio)
Finance Committee
Tom Cogswell, Chair
Allen Berk
Joe Glasson
Fred Stang
Tom Medlin
Ed Rose
Trudy Smith
Board Development
Gracie Johnson-Lopez, Chair
Dave Gettles
Beth Maxwell
Perry Colwell
Trudy Smith
Fund Development
Dave Pottenger, Chair
Laura Benson
Beth Maxwell
Josh Ravitch
Don Wells
Perry Colwell
John Gabor
Kate Mazza
Vic Moore
Trudy Smith
Ed McCraw, Chair
Linda Luftig
Marilyn Longman
Kate Mazza
Sarah Shapard
Trudy Smith
Diversity Committee
Harold Sellars, Chair
Member TBD
Trudy Smith
Strategic Plan Ad Hoc Committee
Dave Pottenger, Chair
Tom Cogswell
Dave Gettles
Kate Mazza
Trudy Smith
Executive Service Corps of the Greater Triangle
Organizational Chart
ESC Board of Directors
Executive Director
Trudy Smith
Associate Director
Kate Mazza
Administrative Assistant
Terri Buchanan
Client Services
Don Tiedeman
Client Relationship
Mary Alexion
Perry Colwell
Dave Gettles
Ed Haugh
Marilyn Longman
Linda Luftig
Don Tiedeman
Julian Wachs
Gary Willett
Trudy Smith
Development &
Rusty Myer, Chair
Ed Haugh
Marilyn Longman
Kate Mazza
Trudy Smith
Program Managers
Board Development, Gary Willett
Collaboration, Don Tiedeman
Communications/Marketing, Linda Luftig
Consultant Training/Development, Ed Haugh
Executive Coaching, Marilyn Longman
Financial Assessment, Tom Medlin
Fundraising, Nancy Laney
Management Checkup, Ed Rose
Retreat Facilitation, Diana Bing
Strategic Planning, Mary Alexion
Board of Directors – See Website for Current Details
Board of Directors – See Website for Current Details
Active Consultant Roster – See Website Vault for Current Details
Active Consultant Roster – See Website Vault for Current Details
Major ESC
The following programs form the nucleus of what ESC offers to improve
the effectiveness and efficiency of nonprofits.
While each of these is an organized program, they are structured in such
a way that they can be customized to the needs of the client.
Board Assessments
Board Retreats
Board Development
Strategic Planning
Financial Diagnostic
The following are of a specialized nature that are used to assist
nonprofits in solving specific problems:
Mergers and Acquisitions
Human Resources
Triangle BoardConnect (a free ESC resource for Board
Collaboration with Other Nonprofits
Comprehensive Organizational Assessment (COA)
Board Self Assessment:
Can be a stand alone program, but is most often used along with a Board Retreat.
Consists of a confidential survey of board members on a broad range of subjects pertaining to
their agency.
Results are compiled, reviewed with the Executive Director and Board Chair and presented to
the board members at a board meeting.
Used primarily to provide guidance as to how the board could be more effective in managing
their agency.
The results are often used as the basis for the agenda of a board retreat.
Guidelines for conducting a Board Assessment are included in the Board Retreat manual
available from the ESC office.
Board Retreat:
Is an intensive one day meeting designed to help board members understand board functions and
responsibilities as well as their individual responsibilities as board members.
Strongly recommended that a Board Self Assessment be conducted prior to holding a retreat.
Helps review the agency’s mission, its programs and performance.
Particularly useful for boards in transition, boards with a number of new members and boards
with participation issues.
Often leads to further engagements such as Strategic Planning or Board Development.
A Board Retreat manual is available from the ESC office and training is usually offered once a
Board Development:
Board development is an ongoing program that commonly lasts 6 – 9 months and intimately
involves the consultant in the nonprofit.
It is designed to assist the board in conducting its affairs in an efficient manner and in
supporting the Executive Director in efforts to develop an effective board and agency.
This program consists of four modules: initial assessment; board roles and responsibilities;
board membership; and board organization and operation. The program follows the typical
consultant’s role of analysis, making recommendations, counseling and assisting in
implementing the recommendations.
A Board Development manual is available from the ESC office and training is usually offered
every one to two years.
Strategic Planning
This program guides the client in developing, or updating their strategic plan.
This is a multi-step process lasting about six months that helps establish a focus on the larger
and longer term issues an organization faces and provides a way to organize the steps to address
these issues.
A Strategic Planning manual is available from the ESC office and a training program is usually
offered every one to two years.
This program includes a detailed review of the organization, its mission, its marketing/public
relations efforts and fundraising activities, and assists in creating or revising cases for support.
It also works to ensure that the board understands their total and individual responsibilities in
ESC consultants do not actively participate in the fundraising itself, but guide the client in
developing a detailed fundraising plan and recommend strategies for implementation and
monitoring progress.
While a Fundraising manual is available from the ESC office, it is mandatory that consultants
have experience in fundraising, or have attended specialized training in fundraising. This
training is usually held every one to two years.
This program consists of a six month long series of meetings with the client who is normally the
Executive Director or an officer of a nonprofit organization.
The consultant provides the client with an impartial and confidential resource who can help the
client work through issues by careful listening, reflecting and providing, as it is helpful,
experience, alternative viewpoints and support.
This program recognizes that organizations usually do not provide, internally, this kind of
resource needed by many executives to deal with complex and thorny issues.
Specialized training is required for a consultant to participate in Coaching engagements.
Financial Diagnostic Review:
The ESC consultant assesses the organization’s financial situation and makes recommendations
for changes that will enhance the board’s understanding of the organization’s finances and will
assure conformance to legal requirements of nonprofit organizations.
These type engagements are limited to consultants with special background in this field.
Specialized Programs:
Mergers and Acquisitions
Human Resources
Triangle BoardConnect (a free ESC resource for Board recruitment)
Collaboration with Other Nonprofits
Comprehensive Organizational Assessment (COA)
These are custom designed consulting engagements that utilize consultants with special
backgrounds to address these areas of need.
1. The ESC Consultant
2. Consultant Job Description
3. Chronology of an Engagement
4. Selecting the Consultants
5. Client Relationship Manager Job Description
6. Evaluation: The Process
7. The Final Report
8. Office Help
9. The Consultant’s Role
Role and
Your role is as an advisor to top management and the Board of Directors
of your client. It is to supplement, not supplant the staff.
Generally we use the facilitation style of consulting.
The Client Relationship Manager (CRM) is the key ESC individual
responsible for an engagement.
Assignment to an
Supporting ESC
Communication of problems, complications, etc. generally will be with
the assigned CRM.
Generally two consultants are assigned to an engagement. The lead
consultant is one who has experience and is trained in the service we
are providing.
The “second chair” is often a new consultant who gains knowledge,
experience and confidence in the role.
Clients quickly form an opinion of the professionalism of ESC
consultants, thus attire should be appropriate for the first meeting.
Generally, at subsequent meetings, dress is more casual.
We encourage all consultants to make a contribution to ESC in addition
to the time, effort and talents they give. Contributions are tax
It is customary for consultants to pay their expenses such as copying,
parking, lunches, etc. while conducting an engagement.
These expenses are also tax deductible.
It is also customary for consultants to work on one or more committees
and/or internal projects as the need arises.
The time required for our engagements vary widely depending upon the
type of engagement and the schedule you establish with the client.
Prior to taking on an engagement, the CRM will give you an estimate of
the time required so you can assess your availability.
If unavoidable time conflicts arise, or your situation changes, you must
contact the CRM, or the ED, so arrangements can be made for
continuity of services with the client.
Rules regarding
client offers
Occasionally you may be asked by your client to serve on their Board of
Directors, or to consider paid employment with the client. If this occurs,
you should be guided by the following:
In order to avoid any actual or perceived conflict of interest, you should
not accept Board membership, a consulting contract or paid employment
while serving as an ESC consultant.
After you have completed the engagement you are free to accept such
offers if you wish. Should you do so, you should notify the ED of ESC.
To avoid any confusion in this area, we ask all consultants to read and
sign a conflict of interest form: See Section V (Sample forms and
letters). A best practice would be for all consultants to sign a
confidentiality agreement.
Confidentiality is of paramount importance to our relationship with our
You must hold in confidence all information marked confidential and
you must use discretion in conversations, both inside and outside ESC to
assure that you are not sharing information that you were given with the
expectation that it not be shared.
We cannot, in any way embarrass our clients by sharing any internal
information about the client.
Personal Liability
All ESC consultants must sign the confidentiality form found in Section
V (Sample forms and letters).
ESC has a general liability policy that provides coverage for the
consulting advice given by our consultants.
We do not provide workers compensation coverage for our consultants.
Business cards will be provided by ESC.
Manuals are available for the core programs offered by ESC.
Training courses on the core programs are conducted on an as needed
basis, generally every one to two years.
Keeping track of
It is in the best interest of ESC and its funders that we be able to
estimate the amount and value of our pro bono consulting hours.
CRMs should collect project hours from consultants on each job and
submit to the office at the end of each project.
2. Consultant Job Description:
To help nonprofit and governmental organizations be more effective.
1. Attend appropriate orientation and ongoing training.
2. Accept assignments, individually or as part of a team, to consult
with directors and staff of nonprofit or governmental agencies.
3. Exercise a high degree of professional competence, integrity and
confidentiality in completing a successful assignment.
4. Follow good consulting practices; gathering relevant information
using active listening skills, identifying and analyzing problems,
determining alternate solutions, making recommendations; and
securing client agreement to implement recommendations.
5. Document the project both for the client and for ESC files.
6. Follow up with the client, to the degree possible, to assure
1. Attend ESC activities (periodic meetings, etc.)
2. Keep the ESC CRM informed of project status throughout an
assignment and make such reports to ESC meetings as are
3. Make annual donations to ESC.
Genuinely interested in helping nonprofit organizations; career
developed experience and skill relevant to needs; understands the
consulting process; listens very well; thinks objectively and creatively;
receptive to new ideas; results oriented.
All assignments and ESC activities are subject to an individual’s ability,
but when a consultant accepts an assignment he or she is expected to
commit sufficient time and involvement to assure a high degree of
excellence for the client.
3. Chronology of a Consulting Engagement:
Client contacts
Executive Director (ED) acknowledges and does initial screening.
ED and CRM
visit client
Determines exactly what the client wants/needs.
Letter of
Client signs and makes initial payment.
CRM selects
Lead consultant is one with experience, second chair is often used to train
new consultants.
CRM meets with
the client and the
Makes certain there is a “fit” between consultants and the client.
ED selects Client Relationship Manager (CRM).
Establishes fee.
Confirms and discusses the purpose and objective of the engagement.
Turns over engagement to consultants.
Consultants meet
with client
Gather background information and sets up work schedule,
responsibilities, etc.
Work commences
Mid engagement
CRM contacts consultants during the engagement to see how it is going.
Engagement is
Consultant writes a Final Report for the client and ESC files.
Debrief is held
between CRM
and consultants
Discuss the engagement, what went well and what could be improved
Final bill and
evaluation survey
link is emailed to
the client
Client evaluates ESC’s performance regarding the engagement.
A copy of the Evaluation Survey is included in Section V (Sample Forms
and Letters).
ESC follow up
with client
Evaluation feedback is shared with the consultants.
Approximately 3 months after the close of the engagement, ESC contacts
the client to discuss what impact the engagement has had on the client and
what ESC could do to further assist them.
4. Selecting the consultants
The Client Relationship Managers are responsible for selecting consultants for the
engagements for which they are responsible.
Consultants are selected for engagements by the following method:
Are they available
Do they have the time
Have they worked recently
Have they performed a similar job with ESC
Their professional experience
Have they completed ESC training
The experience the CRM has had with the consultant
5. Client Relationship Manager Job Description:
Position Description
Primary responsibility:
The Client Relationship Manager (CRM) has overall responsibility for the assignment from
beginning to end. The CRM:
Is involved in marketing and selling the services of the ESC.
Has the ultimate responsibility for ensuring that the project team delivers quality
consulting to the client.
Is responsible for building and maintaining the relationship with the client.
Serves as a source of advice and counsel for the consultants.
Has the ultimate quality control for the services that we deliver.
Specific responsibilities:
Build awareness of ESC in the community
Oversee multiple assignments
Attend initial client meeting, identify the issues and recommend ESC services
Write the proposal/contract letter (or do final review of the document)
Price the assignment
Assist in staffing the assignment
Kick off the assignment/introduce the consultants
Maintain contact with both the client and the consultants during the assignment to ensure
that there are no problems
Review key documents
Ensure that the final report is done and sent in a timely manner
Debrief project team on feedback
Conduct a three month follow-up with the client
Attend bi-monthly Client Services meetings
Personnel Specification
The Client Relationship Manager (CRM) should have:
Consulted on several projects and served as lead consultant on at least two
Knowledge of all of the organization’s programs and capabilities
Experience selling the services of ESC
Strong communications skills (writing, speaking and listening)
Skill at framing a work plan and writing a proposal
Demonstrated the ability to build and retain relationships with consultants and clients
The Client Relationship Manager (CRM) should be:
Willing to commit the time required to deliver high quality consulting services to the
clients of ESC
Responsive to the needs of our clients
Capable of overseeing multiple assignments
Able to manage the administrative elements of consulting
Committed to helping ESC clients and to improving the work of the nonprofit
A team player capable of working with and leading consultants
Comfortable with technology
Client Relationship Manager (CRM) Preparation Plan
Attend Orientation
Attend Product and Program training
On the job training (OJT)
Work with at least two Client Relationship Managers
Consult on a minimum of four projects
Receive positive feedback
Serve as lead consultant on at least two projects
Attend two successful new business development calls
Participate in two Client Services meetings
Work on one internal project
6. Evaluations
The Process:
ESC is very interested in ensuring that we deliver a quality product in a high quality
One of the steps in this Quality Assurance process is the evaluation, by our clients, of the
work performed for them.
When the Final Report is completed and received by the ESC office, the office will email
the final bill and the evaluation survey link. When the survey is completed, the results
will be placed in the client’s file and a copy sent to the CRM.
The CRM will then forward copies to the consultants involved with appropriate
comments, if any.
The evaluation survey is included in Section V.
7. The Final Report
When an engagement is completed the consultants are to write a Final Report to the
client, with a copy to the ESC office.
ESC considers the Final Report to be an important part of each consulting assignment.
The Final Report serves several purposes:
It gives the client, in one document, a full summary of the engagement that can be
used as a “road map” as what was done and needs to be done.
It provides a record for the ESC’s client file for future reference
It signals the ESC office to send a bill for the final payment.
The following outline of the elements of a Final Report will give you direction as to what
should be included. The procedure in preparing a Final Report is as follows:
The consultants prepare the Final Report in draft form.
The lead consultant then sends the draft to the CRM on the engagement for
When approved, the lead consultant will send it to the client with copies to the
CRM and ESC office.
8. Office Help, Expenses, etc.
 Located in the SouthCourt Building – 3211 Shannon Road, Suite 410 Durham, 27707
 Mailing Address:
Executive Service Corps
PO Box 51152
Durham, NC 27717
 Phone: 919 294-9803
 Email: [email protected]
Office help:
 Limited office help is available, but allow plenty of time
 Most typing and copying is done either by the client or the consultants
 Most consultants pay for all the expenses involved during an engagement and claim them
as a charitable deduction for income tax purposes.
 Don’t forget to claim mileage, parking, copying etc. when claiming your charitable
deduction. It is up to you to properly document these expenses for your income tax
 If there are extraordinary expenses, they may be reimbursed by ESC. Prior approval is
required from the CRM.
 If significant expenses (e.g. lodging, meals etc.) are anticipated, the CRM should arrange
for the client to reimburse ESC.
9. The Consultant’s Role
1. The selected Consultant(s) will receive a briefing from the Client Relationship
Manager (CRM). In most cases, the CRM and/or Consultants will need these items.
(If the request is “help us make our computers compatible” obviously not all these are
copy of agreement letter
mission and/or vision statement
bylaws and organization chart
last annual report and audit report
latest financial statement
promotional material (brochures, flyers)
any special instructions specific to the project
2. The Consultant(s) arranges a meeting with the client. It is important that both client
and Consultants are comfortable with the assignment and each other. The Consultant
discuss with the client how the project will proceed
agree on frequency, days of the week, times for meetings and who will attend
agree on the subject matter for the next meeting
listen carefully to the client, test what the client asked ESC to do, and do this
several times in different ways. The need could very well be different than
originally stated and, if so, this needs to be agreed upon and put on paper and
would normally be prepared by the CRM.
3. The Consultants and the client having confirmed their agreement, the Consultants carry
the assignment to an appropriate conclusion. After each meeting it is helpful to provide
the client with written information as to:
 who attended
 what was agreed upon
 the date and time of the next meeting
 subject matter of the next meetings
 any tasks to be performed between meetings and who will do them
Sometimes, the real problem and/or need is different from the believed problem. In many
cases the client is simply too close to the picture to see its real dimensions. In other
cases, a client may be so concerned with the poor results of inadequate operating methods
that he/she overlooks their real causes. Sometimes deep differences exist between the
organization’s Board and its paid Administrator and are not always obvious. These major
differences can be identified only through patient observations and questions. Should the
Consultant decide a NEW agreement needs to be made, the CRM MUST be brought in to
negotiate this.
4. The Consultants prepare a draft of the final report with their recommendations. There
is no rigid format for the final report. The Consultant has latitude in deciding how it is to
be written and what it should cover.
5. The final report is reviewed and approved by the Consultants and the appropriate
Client personnel. It is important to:
determine how the final report is to be submitted, to whom, and what points are to
be covered, long before it is due. Will the Consultant(s) be expected to present
the recommendations in person? Will the report be given to the client’s Board, to
a Committee, to the organization’s Administrator, or to the Chairman alone?
Answers to these questions may influence your schedule and the way in which the
report is written.
anticipate how the client intends to utilize the recommendations in the final report.
Would the assignment be called successful because the client’s board approves—
or will the organization’s management have control of the project assessment?
Does the client hope for a thorough overhaul of management practices, or some
operational changes? Would it be planned for a limited period, or for the years
6. The final report is submitted along with a cover letter. Assignments, therefore, reports
will vary with the client and with the type and extent of the work. The following
guidelines may be helpful.
A. Assignment of information
 a copy of the final report, which includes: overview of the organization,
summary of the work, and recommendations
 relevant notes of meetings and attendees, interim reports
 copy of any memos written by ESC personnel, which should be on file
B. Organization information, including, if pertinent:
 Mission/Vision Statement
 bylaws
 financial information (monthly or annual report or audit)
 Promotional Materials (i.e., brochure, flyers)
C. The Cover letter should:
 thank the Client
 state the work done and how (if pertinent)
 make general comments (if any)
- meetings held
- research done
- strengths and opportunities to improve observe
- possible future needs identified
D. Sample Report in section V may be helpful, but since projects are so varied, so are
reports. Consult your CRM.
E. Thank the client again and leave the door open for future service
1. Letter of Agreement
Key Elements
Sample Letter of Agreement
2. Final Reports
Elements of a Final Report
3. Evaluation
4. Questions to ask at 3 month follow up
1. Letter of Agreement
The Letter of Agreement is “the contract” between ESC and the client.
Attached are what ESC considers the “key elements” that need to be included in each
Letter of Agreement AND an example of a Letter of Agreement.
The process of preparing a Letter of Agreement is as follows:
1. After meeting with the client, you discuss with ESC’s Executive Director the services
you propose to provide and come to an agreement with regard to the fee and
scholarship funds, if any.
2. Generally it is a good idea to then confirm with the potential client the services you
propose providing and the fee proposed so they are not surprised by what you propose
and the fee involved.
3. You draft the Letter of Agreement and send it to the ESC office where it will be typed
on ESC letterhead and mailed.
Key Elements of a Letter of Agreement
Each Letter of Agreement must, of course, be customized to the individual situation and
the services ESC proposes. There are, however some key elements that should be in each
Letter of Agreement….these include:
Greeting: Thanking them for the opportunity to work with them
Understanding of the issues and the clients objectives:
It is extremely important for you and the client to be on the same page with regard to the
issues, the clients’ objectives and the challenge ESC is facing.
Here you briefly outline your understanding of the issues and the objectives of the Client.
The services you are proposing:
Here is where you outline what it is you are proposing…some of the things it might
include are:
Name of the service: i.e.: Board Self Assessment and Retreat
Developing a Fund Raising Program
Creating a Strategic Plan, etc.
Description of what the service will provide
When it will be provided
Developing the agenda, if required
Number of preparatory meetings or interviews you will conduct
Who is responsible for what…i.e. the meeting room, flip charts,
Mailing of questionnaires, summarizing responses, etc
The consultants names (if known)
Final Report:
Here is where you articulate what you will be providing after the assignment is complete,
when you will provide it.
This is usually the final report (see criteria for final report), but may also include
additional data and information.
Advisory statement:
This statement MUST be included: “It is understood that our services are advisory in
nature and decisions to implement and recommendations are the responsibility of your
The standard fee statement is as follows: “You agree to pay, and we have agreed to
accept, a fee of (insert amount). One half of this fee (insert amount) payable with the
return of this signed letter of agreement, the other half upon completion of the
Follow up Statement:
The standard follow-up statement is as follows: “You agree to assist us in evaluating the
results of this agreement within 90 days of the completion of the engagement.
Confidentiality Statement:
This statement MUST be included: “We will not divulge, to third parties, without your
prior consent, any confidential information that we may gain in the performance of this
engagement. This obligation with respect to confidentiality will survive the termination
of the agreement.
Closing statement:
Thank them again for the opportunity AND include the following statement: “If you are
in agreement with the above, please sign and return one copy and include one half of the
agreed upon fee.
The CRM for the client should sign as a representative of ESC
A signature block for both the Executive Director and the Board Chair to sign as
accepting the agreement.
The original and one copy should be sent to the client, AND one copy to the lead
consultant if known.
Sample Letter of Agreement
Contact name and title
Street name and address
City, State, Zip
Dear: (Contacts name)
We at ESC are delighted with an opportunity to provide management services to (Clients name)
We understand from our recent discussions you wish for your Board to not only better understand
their roles and responsibilities but also to become more engaged and active in board activities.
With this in mind, we offer the following proposal for services to be provided to your
Board Assessment and Retreat
ESC will work with you to design, administer and analyze a Board Self-Assessment survey
during (insert date) of this year. The purpose of this self assessment is to elicit Board members
feelings on a wide variety of topics concerning your organization. Your part in this will be to
mail the self-assessment questionnaire and to follow-up to ensure returns.
We will then work with you to develop an agenda for a Board Retreat and will facilitate that
retreat on (insert date of retreat)
(Consultant’s name) and (consultants name) will be the ESC representatives working with you
on this engagement.
Arrangements for the retreat, its location, refreshments and equipment needed
by the consultants will be your responsibility.
Final Report
After the retreat, our consultants will prepare a report for you outlining the actions and
recommendations arrived at during the retreat including a summary of the Self-Assessment
survey and any other pertinent information developed at the retreat.
Advisory Statement
It is understood that our services are advisory in nature and decisions to implement any
recommendations are the responsibility of your organization.
You agree to pay, and we have agreed to accept, a fee of (insert amount). One half of this fee
(insert amount) payable with the return of this signed letter of agreement, the other half (insert
You agree to assist us in evaluating the results of this agreement within 90 days of the
completion of the engagement.
We will not divulge, to third parties, without your prior consent, any confidential
information that we may gain in the performance of this engagement. This
obligation with respect to confidentiality will survive the termination of the
If you are in agreement with the above, please sign and return one copy and
include one half the fee as agreed upon.
(Insert CRMs name)
Client Relationship Manager
Executive Service Corps of the Triangle
Client’s Name
(Insert name of Executive Director)
Date: _______________________
(Insert name of Board Chair)
Date: _______________________
Copy to: (Insert name of lead consultant if known)
2. Final Reports:
When an engagement is completed the lead consultant is to write a Final Report, review with the
CRM and then send to the client, with a copy to the ESC office. ESC considers the Final Report
to be an important part of each consulting assignment.
The Final Report serves several purposes:
1. It gives the client, in one document, a full summary of the engagement that can be used as a
“road map” as what was done and needs to be done.
2. It provides a record for the ESC’s client file for future reference
3. It signals the ESC office to send a bill for the final payment.
The attached outline of the elements of a Final Report will give you direction as to what should be
The procedure in preparing a Final Report is as follows:
4. The lead consultant prepares the Final Report in draft form.
5. The consultant then sends the draft to the CRM on the engagement for review.
6. When approved, the lead consultant will send it to the client with copies to the consultants,
the CRM and a copy for the ESC office copy for the clients’ file.
Elements of a Final Report:
Opening paragraph: Start with an introductory paragraph thanking them for the
opportunity to work with them and how impressed you and your partner consultant were
with the organization etc. etc.
The assignment: Outline the overall objectives of the engagement. Note these might be
taken from the “Letter of Agreement”, or, as often happens, the objectives change slightly
when you and the ED/Board Chair meet to work out the details of the engagement.
It is important to restate those agreed upon objectives/goals in the Final Report.
Consulting process: Summarize the various steps involved in the consulting process.
This might include a brief outline of the various preparatory meetings, surveys and the
actual engagement itself.
For example: “We conducted two meetings with the ED and Board Chair as well
as four interviews with staff members in preparation for the Board Retreat. We
also conducted a Board Self Assessment; a copy of which is attached. A four
hour board retreat was conducted on Jan 12, 2009. Attending were 9 board
members and the Executive Director.
Accomplishments: Summarize what was accomplished during the engagement. You
should also include, if it was decided, who was assigned to various tasks and target dates
for completion.
For example: “The Board members agreed to immediately work on the following:
Recruit a new Executive Director by……..”date”
Develop a fund raising plan by……”date”
Develop a communications plan by…….”date”
Next steps: Summary and “next steps” that should be taken…these are usually developed
during the engagement. If there were none, then omit this portion of the report.
Recommendations: Summarize any recommendations you may have along with
suggestions regarding priorities, scheduling, target dates etc.
For example: You might list the major items that need action that appeared in the
Self Assessment survey and recommend that action be taken. You should also list
and recommend action be taken on any “parking lot” issues that were brought up,
but not discussed. You may also have other recommendations that you feel are
important…such as…”Updating the strategic plan”
Closing paragraph: Thank them again for the business and indicate the willingness of
ESC to work with them again.
Appendix: List and attach data used or additional information that was used in the
performance of the engagement.
Examples: A copy of the Board Assessment, if one was done
Copies of relevant material developed during the engagement…
i.e. notes taken on easels
Copies of slides used in any presentation made during the engagement.
Sample of Final Report
Sample: Final Report
TO: Client’s contact
FROM: CRM and consultants
SUBJECT: ____(client)_______(project)
The purpose of this memo is to report the successful conclusion of our efforts to facilitate the
(project) for the (client) in (city), North Carolina.
In addition to the introductory meeting with the Strategic Planning Committee we had with you,
we met six times with the full Committee and for the purpose of developing a SWOT analysis we
met once with representatives of the (client) to develop Mission and Belief Statements.
We used a process which included describing and agreeing upon the overall process with the
members of the Strategic Planning Committee, reviewed and revised the Mission and Beliefs
Statements, and conducted a SWOT Analysis with the committee, members of the staff, and a
group of parents. This was followed by the development of critical issues, goals, and objectives.
We made recommendations, which were accepted, regarding the format of the written plan and
the process to be used in carrying out and monitoring the plan.
Attached is a copy of the plan, which has been approved by the Strategic Planning Committee
and which we are told, will be provided to the (client’s) Board of Directors. If there is any
revision to the plan and we receive a copy, we will forward that copy to you as well.
Even though this seems to have been a fairly lengthy course, because of when the Committee
members were able to meet, we believe it was a successful one. The activity resulted in a plan
that will allow the (client) to achieve the goals identified in the process.
We believe it is appropriate to finalize any billing for this consultative service that is appropriate.
ESC Client Engagement Evaluation Survey – See Website Vault for Current Details
ESC Client Coaching Engagement Evaluation Survey – See Website Vault for Current Details
4. Client’s 3 Month Review
A review with the client by the CRM is an important step in ESC’s Quality Assurance
program as well as a marketing tool.
The ESC office will alert the CRM responsible for an engagement when a three month
review is required.
The CRM is to call the client and get a feeling as to what has transpired three months
after the completion of the engagement.
The following are some questions intended to assist the CRM when conducting this 3 month
follow-up review with a client.
a) if what we did is helpful,
b) can we do anything more for the client, and
c) can they refer others who could use our consulting services.
Suggested questions For Clients’ 3 Month Review
1. Have you had a chance to implement any of the change or recommendations
that were made as a result of our recent engagement?
a. If yes, what has been the impact?
b. If no, what have been the inhibiting factors?
2. What could have been done during the engagement to have been helpful
in implementing those changes/recommendations?
3. You received a “Final Report” from our consultants, was that useful?
a. If not, any thoughts on what could be done to improve it?
4. What can we do now to help you?
It is expected that if the CRM uncovers any ideas, suggestion, problems or opportunities that the
CRM pass them on the appropriate person or committee.
Some Basic Principles for Consultants
What Makes a Successful Consultant
Trust: The Precursor to Success
Common Challenges You Might Face
Culturally Competent Consulting
The difference between For Profits & Nonprofits
Learn all the Rules Before You Enter the Nonprofit Game
What Business Execs Don’t Know – but Should – About Nonprofits
1. Some Basic Principles for Consultants
Principle #1:
Enjoy what you are doing, the people and the challenges, is a must.
Principle #2:
Listening and feeding back are the most important skills. Often solutions/ideas exist in
the client organization, so that the consultant’s job is to find them and feed them back in a
manner that makes them acceptable.
Principle #3:
The steps usually are:
Collecting of information, i.e., study
Developing a work plan, having plan reviewed, writing formal document (outline)
Assisting personnel in developing and documenting the recommended changes
Being there with the people involved to hear their concerns, to suggest actions, to
provide ideas, to encourage, and so on
Staying with them through early implementation
Ending the project before they become dependent on you
Writing the final report
Documenting the project for ESC
Understanding the importance of nonprofit organizations in America and
understanding their disparate needs for help in management, since their ardor is in
mission rather than in management
2. What Makes A Successful Consultant?
a. Listen! Listen! Listen! Listen, take notes and absorb.
b. Leave your ego at the door. Probably the biggest problem.
c. Get used to working on your own. Nobody’s going to do anything for you. There’s
no staff to delegate things to. Secretaries to do your expenses, make phone calls, set up
meetings, type the recommendations and/or give the final presentation. The client
doesn’t have the time or people. You must be prepared to resource the entire project by
d. Always show you care. Your mission is to help your client do a better job in
achieving his/her organization’s mission. Be sensitive and helpful.
e. Never show your age. The perception is older people play too much golf, are
preoccupied with Medicare and Social Security benefits and only read the AARP
Bulletin. Keep current. Better yet, stay ahead of your particular specialty (i.e., read trade
publications, newsletters and business magazines and attend seminars.)
f. The client knows more about what’s wrong than you do. He/she just doesn’t know
how to fix it.
g. The client is buying your expertise – and not your experience. Expertise is skills
like computer programming, fund raising, marketing, etc. Your mission as a Consultant
is to take your special expertise and translate it into finding the best practical solutions to
your client’s problems.
h. You must fight to earn your client’s trust. Unless you are Bill Gates, chances are
nobody’s ever heard of you, your past affiliations and your past accomplishments. Or
even cares! Keep in mind Consultants mean something is going to change. And most
people fear change because it means re-engineering (i.e., unemployment). Or having to
work harder. When you finally break this barrier, people will open up and tell you what’s
wrong and where the problems are. And even how they feel about the people they work
for. Learn to be discreet and never disclose confidences.
i. Understand the mind set of a nonprofit organization. It’s very different from what
you may be used to. Many nonprofits traditionally operate on a “crisis du jour” basis.
Unpaid bills, poor cash flow, introvert “them vs. us” culture, housed in a disorganized,
hectic, frantic atmosphere, with no, or at best little, planning.
j. Most non-profits are not entrepreneurially run. Nonprofits are typically “mom and
pop” oriented, bear little resemblance to matrix corporate world, are constantly under
funded and understaffed. In addition, they are usually led by strong, passionate
individuals who often get things done by the sheer force of their personalities and
commitment to mission.
k. When developing your final proposal, you must always consider: Who’s going to
do it? How are the program, strategy, actions going to be implemented? Most plans sit
on a shelf – never to see the light of day because they’re not very practical. Unless your
ideas are simple, affordable and easily executable, you’ve wasted everyone’s time
and money.
l. Tell your client something he/she doesn’t already know. Present fresh solutions. The
client is seeking new ideas about improving his/her organization.
m. Good Consultants have better eyesight. They have to see through the cluttered, often
confusing environment in order to stay focused as to what is really important in
achieving the nonprofit’s objective.
n. Learn when to let go. They didn’t hire you, marry you, and certainly don’t want you
hanging around the office. But when the assignment is over, it’s over. Start preparing for
the next project.
Lloyd Highbloom,
Volunteer Consultant
from NESC Consultant
3. Trust: The Precursor to Success:
The experience and judgment you bring to your assignment are important determinants of your
success as a consultant, trainer, or coach. However, good communication, showing respect for
the individuals and the organization, and establishing trust are fundamental to the client’s ability
to use your expertise.
The following behaviors will make your volunteer experience a success.
1. Be a patient listener/learner and do not jump to conclusions.
2. Be honest about what you can do and by when you will have it done. Always do a little
more than you promise.
3. Don't say anything to or about your clients that you wouldn't want passed around.
4. Speak the client's language. Don't force them to learn yours.
5. Pass your knowledge and experiences on to others. Share, coach and advance the abilities
of others.
6. Respect the strengths and accomplishments of the organization.
7. Communicate with team members, ESC, and the client more than you think is necessary.
8. Focus on the client’s future results, not your past experiences or accomplishments.
9. Keep aware of the relationships and interdependencies between the project tasks. Ensure
that what you're doing is what the client is paying for.
10. Keep learning and sharing new and better ways of getting things done.
Our evaluations incorporate many of these characteristics so that consultants and coaches are
given feedback on their communications behaviors. What makes a person successful as a
volunteer in the non-profit sector are the same characteristics that make a person successful as a
corporate executive, professional, or nonprofit manager.
Since ESC consultants are often working with people of cultural backgrounds different from
themselves and with organizations that are based in communities of color, the principles of
culturally competent consulting that are outlined in Culturally Competent Consulting are critical
to our success. Please review this and refer back to this document when you are on an
assignment where these skills and attitudes are particularly important.
You should feel very much at home at the Executive Service Corps of the Triangle. Enjoy the
work, take pride in it, and have fun with it every day!
4. Common Challenges You Might Face:
No consulting assignment is without its challenges! Here are eight common challenges that you
might encounter in your work with ESC clients:
It may be difficult to get a fix on the client’s real problem
Following your initial meeting with the client, you may discover that the client’s real problem is
different from the problem that was originally identified. As you uncover areas that need to be
addressed, you and the client may decide that the initial Statement of Work needs to be modified.
(Contact your ESC CRM to assist with revising the contract.) Your skills in ferreting out the real
problem, earning the client’s acceptance, and together seeking solutions are a great value. Asking
questions and listening to answers is paramount— the most difficult thing for most of us is to
really listen!
You may find it difficult not to jump to conclusions and may need to cultivate your
listening skills.
Since the initial phase of your consulting entails fact-finding, you will first find yourself in the
role of listener. Hearing the client talk about the organization, its mission, and their personal
motivations will give you important information you will need to do your job. In turn, as an
impartial listener, you are also laying the groundwork for a relationship based on openness and
trust. Patience, flexibility, and persistence are needed in the consultant role — and cultivation of
these skills will likely pay off for both you and the client in the overall satisfaction with the job
you have done. It is particularly important to avoid specific suggestions or judgments during the
initial phase of consulting.
You may need to gain a better understanding of how non-profits differ from for-profit
The process of managing all organizations — establishing objectives, directing the attainment of
objectives, and measuring results — is fundamentally quite similar in business, government, and
non-profit environments. However, there are differences that impact how you work with the
organization and what recommendations are appropriate.
If you have worked in government or in large business environments, the most important difference
to consider may be one of scale. In smaller nonprofit organizations administrative staff often carries
out multiple roles, sometimes including roles for which they have little formal training. Smaller
organizations also have less formal structures for communication, processes and decision making.
The focus nonprofit organizations give to carrying out their mission often results in administrative
functions being under resourced and in low investment in offices, furnishings, technology,
equipment etc. Nonprofit organizations are adept at making these tradeoffs and you should not
assume that their decisions are inappropriate without having a full understanding of the organization.
Decision-making in nonprofits may be more participatory. Organizations tend to have a much flatter
structure than corporate environments and boards play a role broader than bottom line shareholder
value. There may be legitimate issues in the organization about the need to define executive
authority, delineate the role of the board of directors and formalize decision making. However, you
should not pass judgment on consensus driven processes that may look inefficient until you have a
good understanding of who these processes work in the organization.
You may have to deal with a foot-dragging client
“I can’t proceed any further until the Executive Director has met with the staff and
Board/written a report/made a few calls….” This consultant’s complaint about a foot-dragging
client is a common one. Often the attention of the client’s Executive Director is appropriately
focused on the crisis of the day rather than following up on agreed-upon activities related to the
project. In order to avoid or mitigate this problem, it is helpful for you to:
Establish regular meetings with the Executive Director or whomever is your client;
Leave the Executive Director with “homework” to do between meetings; and
Refer to the stated objectives of the project and discuss them with the Executive Director.
The ESC Executive Director or the CRM are available as a third party if you wish to provide
an additional nudge when you reach an impasse with a foot-dragging client.
It may be a challenge to maintain objectivity in the face of organization politics
At times, you may find that factors within the organization interfere with you carrying out an
independent and objective analysis:
An Executive Director’s “hidden agenda” surfaces, and you discover that there is pressure to
make certain recommendations that you feel are inappropriate or unwise.
Uneasy relations exist between the Board and staff of the client organization, and you find
yourself in an awkward position in terms of your relationship with each.
The Executive Director attempts to limit your access to certain members of the Board or staff
— individuals who you feel need to be contacted in order for you to conduct an effective
Suggested ways to avoid or deal with these pitfalls are:
In your initial meeting with the client, try to establish an atmosphere of candor. Encourage
the Client, who is usually the Executive Director, to “lay the cards on the table” at the outset.
Use your best analytical skills in identifying and confronting any hidden agendas. Ask for
agreement from the Executive Director to allow you access to any Board members or staff
you feel would be appropriate in conducting your analysis.
Be mindful of who your client is. We may have been asked into the organization by the
Executive Director, Board or another staff member. You need to remain responsible to the
client. Do not contact board or staff members without ED permission, if the executive
director is your client.
Reassert the importance of the objective role of an outside consultant.
If organizational politics continue to stand in the way of your conducting the assignment in a
fair, accurate and thorough manner, discuss this with the CRM and/or ESC’s Executive
Director and the project may be suspended or terminated.
You may need to clarify the relationship between the Executive Director and the Board of
In most non-profit agencies, the Executive Director acts as the CEO with all staff reporting to the
ED. The basic role of the Board of Directors’ is to set policy, evaluate the organization’s
performance of its mission, and hire/evaluate the ED. It is not unusual for this relationship to be
very poorly defined and for each member of the board to have his or her own view of the board’s
role. The relationship between the Executive Director and the Board is critical to the
organization’s survival and success and it is rare that we consult with an organization without
getting involved in trying to clarify this relationship.
For most consulting projects it is helpful for ESC consultants to spend time with the Executive
Director, Board President and other Board members to find out how staff and Board interact.
Consultants often arrange one-to-one interviews with the Executive Director and appropriate
Board members involved in the consulting project to assess and compare the key players’
You must address the issue of implementation
You have only made an impact if the organization is able to successfully implement your
recommendations. ESC consultants need to go beyond answering the question “what should we
do” to asking “how can we get it done?” It may be helpful for you to stay available to the client
as an advisor as the client begins to implement your recommendations. The client may agree with
your recommendations but have difficulty implementing them. Keeping in touch with the client
during the implementation stage will help ensure follow-through on your suggestions. If you
need to lengthen the contract in order to ensure that the organization is prepared to make use of
your recommendations talk to the ESC Executive Director or the CRM about an extension on the
contract date.
You might encounter problems with implementation.
Be clear with the client that you are not the implementer of your recommendations. Your
objective is to work closely with the client so that the client is able to carry out your
Clients do not always implement consultants’ recommendations. A client’s calling in a
consultant does not guarantee that advice will be accepted and changes made. Throughout the
project have frank discussions with the client about their willingness and ability to implement
the recommendations
Be aware of and value cultural differences and strive for cultural competency
Executive Service Corps of the Triangle serves very culturally diverse organizations. Being
culturally competent is not about being blind to differences. Being culturally competent means
that cultural differences are not a barrier to your effectiveness as a consultant. Consulting work
with individuals and organizations in multicultural environment requires the following
Value diversity. Enjoy the experience of getting to know people and/or an organization
that is grounded in a different language, communication style, experience, customs,
beliefs, and values than your own.
Demonstrate openness, acceptance and a willingness to learn about the experience and
culture of others. Do not assume that you will be competent in an environment very
different from your own background and experience without asking for the guidance of
your client.
If you unintentionally offend someone, apologize and ask for the information you need to
be more effective in the future.
5. Culturally Competent Consulting:
Guidance on culturally competent practice for ESC is provided by the Alliance for Nonprofit
Management. The Alliance’s Ethical Standards for Nonprofit Capacity Building state:
Capacity builders shall be cognizant of the cultural dimensions of
their work and the relationship between their own cultural
identify and that of clients and communities. Capacity builders
shall continually seek to achieve a high level of competency
through self-awareness, learning, and building a diverse network
of colleagues and partners.
Based on the Minority Executive Directors Coalition definition of cultural competency, the
following describes ESC’s commitment to working in a culturally competent manner:
The consultants and agency staff of Executive Service Corps of
the Triangle will strive to utilize a set of behaviors, attributes, and
practices enabling the consultants to work effectively in cross
cultural and multicultural settings.
ESC consultants and staff will strive to demonstrate the following elements of a culturally
competent consulting practice. Consultants and staff will:
Become familiar with the history and characteristics of client agencies, including the
ethnic and racial makeup of staff, board, and clients.
Frame issues and the consultation process in a way that values multiple perspectives.
Examine both the assets and the needs of the agency and people with whom they work.
Review and assess ESC consulting tools to ensure that they are culturally sensitive and
Create emotional safety and build trust by treating people with respect.
Respect and value other cultures and demonstrate an appreciation for the various ways of
Build bridges across cultural differences, recognizing that there are individual differences
within cultural groups.
Consistently pay attention to their own assumptions and cultural background, and reflect
on how it may affect interactions with people in client agencies and their interpretation of
Engage in continuous learning and reflection, gaining an understanding of their own
cultural identity and its impact on their relationships with others.
6. Differences between For Profits & Nonprofits
Shares of Stock
Distributes profits to shareholders
Reinvest in business
Make money – maximize return to shareholders
Provide service to community
Accustomed to competition
Not usually mindful of competition
Board has oversight – reports to shareowners
Board does oversight & some
work, Board accountable to IRS,
funders, state & local governments
Generates its own income
Goes outside for funding
Covers own costs by generating revenue
Covers costs from grants,
donations, less from fee for service
Salaries, increases, bonuses
Salaried employees but many
Board members motivated by payment,
location, status, less personal connection
“financial reward”
Different motivations for board
service, personal connection.
“psychic reward”
Board members paid
Board members are volunteers
7. Learn all the Rules Before You Enter The Nonprofit Game
You’re fed up with corporate life and all the pressure, uncertainty, politics, and avarice that go
with it. You’re searching for a career that has meaning beyond the weekly paycheck.
Such musings have led many wayward corporate managers into the warm bosom of the
nonprofit sector in recent years.
“The trend has definitely accelerated,” says Kames Abruzzo, managing director of A.T.
Kearney Executive Search’s nonprofit practice. Lucrative corporate buyouts and nonprofit
salaries that are “starting to approach a livable wage” have made the shift less of a sacrifice for
many, he says.
But before you make that leap, nonprofit experts say, make sure you’re ready to play in a game
that has some different rules. “I’ve seen people come from IBM because they believe in the
cause and they forget every-thing they knew about management,” says Elaine Athas, president
of Institutional Advancement Ltd., a management-consultant specializing in nonprofits. Others
come in as full-tilt management gurus and don’t understand what the cause is all about.” Both
are headed for a fall.
Of course, the world of nonprofits encompasses a wide variety of institutions, from charitable
groups to cultural groups, to quasi-governmental agencies. The requirements to succeed at a
nonprofit landing agency might not differ much from the requirements at a bank. But the
management challenge grows more complex at nonprofits whose managers must juggle paid
staffs, volunteers, corporate donors and the need to continually scrape together donations to
keep programs running.
Certainly, nonprofit careers offer some advantages, particularly for those whose training isn’t
as narrowly focused as many corporations prefer. “It’s an area where people from a great
many backgrounds can make a contribution,” say Beth Booalis Davis, executive director of the
National Lekotek Center, which administers programs for children with disabilities. At first,
Ms. Davis, an attorney specializing in corporate law and a former city councilwoman, worried
she wasn’t prepared for nonprofit management. But her background in public policy, law, and
government affairs all have “come into play,” she says.
Also, notes Win Hamilton, executive administer of Lions Club International, “nonprofits don’t
care how old you are.”
So, for those who think the nonprofit world might be for them, here are some points to ponder:
Walk a mile in nonprofit shoes.
Mr. Abruzzo looks for executives who have served on nonprofit boards or worked as
volunteers and thus understand their complex cultures.
That’s how Mr. Hamilton prepared for his transition from the corporate world. As a longtime
nonprofit volunteer, he started to see it as a possible second career about a decade ago, when he
noticed how few people were reaching retirement age at corporations. So he intensified his
involvement, serving as chairman of a local Chamber of Commerce committee, heading his
company’s United Way/Crusade of Mercy Campaign and shepherding major gifts for the
American Heart Association in Lake County, IL.
He learned that his marketing background translated well into fundraising. And he had
valuable contacts. “Six years ago, my last corporate position was eliminated along with 10,000
others and I was able to make the transition to the not-for-profit world in 10 weeks,” he says.
Put away your whip and chair.
Autocratic managers don’t last long in the nonprofit world, where the buzzwords are values,
diplomacy and consensus-building. Even though nonprofits increasingly recognize the need
for stronger management, the first priority is still the mission, not the bottom line. “The issue
isn’t making money off the homeless, it’s getting them shelter so they don’t freeze,” says
Dwight Burlingame, associate executive director of the Indiana University Center on
To make necessary changes, you need to build a consensus. “In an arena where you have
multiple constituencies and agendas,” Mr. Hamilton says, “people have to trust each other
more to make things move ahead.”
But how do you motivate paid staffers who could be working for more pay elsewhere and
volunteers who could be home watching “Seinfeld”?
In the corporate world, people are motivated by pay, Mr. Abruzzo says. “In the not-for-profit
world, you have to think of different ways, since they’re already subsidizing the institution by
taking below-market wages.”
Alex Plinio, president of American Field Services, which administers foreign-exchange
programs, said managers have to think about what the volunteers want.
And one thing they want is to feel good about what they’re doing, so he provides them with
plentiful reminders of how the organization is affecting people’s lives and the community.
Teach business to your boss.
Part of your responsibility as a management expert is to teach the business agenda to the
volunteer board and the executive director, who most likely won’t have your experience. “In at
least two instances, I was coaching the executive director more than doing what I was hired to
do,” Ms. Athas says. “Until that was done, you couldn’t get much else done.”
Email comments on this or other career issues to [email protected]
8. What Business Execs Don’t Know -but should- About Nonprofits
By Les Silverman & Lynn Taliento
Stanford Social Innovation Review, Summer 2006
Ask William Novelli, the CEO of AARP, if business executives underestimate the complexities
of running a nonprofit organization, and his head starts nodding. The former Unilever marketer
built Porter Novelli into a public relations powerhouse before embarking on his current career.
Twelve years deep into the nonprofit sector, Novelli can attest that navigating Washington,
D.C.’s land mines while running his sprawling $800 million operation is hardly the laid-back
retirement farm that many businesspeople imagine.
Too many business CEOs just don’t get it, says Novelli. “It goes beyond underappreciated.
CEOs are often disdainful of not-for-profit management. They think it’s undisciplined,
nonquantified.” But in fact, “it’s harder to succeed in the nonprofit world.” For starters,
nonprofits’ goals are both more complex and more intangible. “It may be hard to compete in the
field of consumer packaged goods or electronics or high finance,” he says, “but it’s harder to
achieve goals in the nonprofit world because these goals tend to be behavioral. If you set out to
do something about breast cancer in this country, or about Social Security solvency, it’s a hell
of a lot harder to pull that off.” And “it’s also harder to measure,” he adds.
It’s not always easy to persuade business leaders of what Novelli knows in his bones to be true.
Yet our experience at McKinsey & Company advising hundreds of nonprofits in recent years
suggests that it must be done. Business executives need to understand the leadership
challenges faced by their nonprofit counterparts if they are to cross the border between the two
worlds gracefully. And nonprofit leaders, for their part, need to have a firm grasp of these
issues so that they can help the business leaders they work with be more effective.
The gap in understanding between the two worlds has wide repercussions. Too many business
leaders take their nonprofit board membership less seriously than they do their corporate board
membership. Too many donors only half heartedly use their financial clout. Too many crosssector partnerships fail because business leaders can’t accommodate the nonprofit sector’s
different culture and demands. And too many well-meaning businesspeople who move into
nonprofit leadership roles end up frustrated and ineffective because they don’t fully appreciate
how uniquely hard their jobs will be. These underestimations of what it takes to lead nonprofits
not only erode individual organizations’ effectiveness, but also hurt the nonprofit sector’s overall
For these reasons and more, leaders who have served in both sectors agree that top business
executives need to better understand what makes the nonprofit world tick. Says Robert Higgins,
who ran the Robert Sterling Clark, John A. Hartford, and Florence V. Burden foundations
before co-founding the venture capital firm Highland Capital Partners, “The nonprofit sector is
such a big part of the economy that you almost cannot let someone run a company who doesn’t
appreciate [it].”
To find out what exactly business executives don’t understand about nonprofit leadership, we
conducted a virtual conversation among 11 nonprofit executives who have also held senior
positions in the for-profit world – that is, crossover leaders. Although some of our interviewees
noted that the gap in understanding between nonprofit and for-profit leaders is narrowing, on
the whole they agreed that most business leaders sorely underestimate how tough nonprofit
leadership can be.
Our interviewees identified five challenges that most business leaders fail to appreciate. First,
nonprofit CEOs wield less authority and control than their for-profit counterparts. At the same
time, they must answer to a wider range of stakeholders. Nonprofits also lack straightforward
performance measures – there are no analogs to profit in social change – and yet they are
under greater scrutiny from politicians and the press. Finally, compared to the corporate
world, the nonprofit sector is underfunded, understaffed, under-resourced, and undertrained.
Below we discuss each of the five commonly underappreciated challenges of nonprofit
leadership, as well as how our crossover leaders deal with them.
Little Control or Respect
For business executives who are used to being the boss, the nonprofit setting harbors a rude
awakening. “In the world of nonprofits, deference to the CEO is rare,” says Reynold Levy,
president of Lincoln Center for the Performing Arts and a former AT&T executive. “You really
need to earn that respect. It doesn’t come by virtue of your title.”
Philip Lader, chairman of the communications services firm WPP Group and former White
House deputy chief of staff, says the lack of respect can be exasperating to those who don’t
understand the sector. “When I was a college president,” Lader says, “I sought to initiate
curriculum reform, establish certain cultural requirements, and apply for admission to the
NCAA, all of which required faculty consent. Contrary to a corporate setting, I would stand
before the faculty senate and plead for their support. Yet the board and media would ascribe to
me the credit or blame for the institution’s progress.
“It reminds me of what someone said life as an ambassador is like,” adds Lader, who also
served as U.S. ambassador to the United Kingdom from 1997 to 2001. “There you are at the
helm of the great ship, with everyone scurrying about. Only after about four months of steering
the wheel do you realize that it is not connected to the rudder. Everyone is saluting you and
saying ‘aye aye,’ [and then] they go below to steer the ship themselves. In many nonprofits, that
genuinely is the case.”
“I’ve seen some people try to move over to the nonprofit sector from the private sector,” says
Richard Schlosberg, who was CEO and publisher of the Los AngelesTimes before serving five
years as president of the David and Lucile Packard Foundation. “Their time frame, their
command-and-control orientation, and their view of the employee/employer relationship just
don’t translate as easily. It’s like they don’t quite get it.”
So Many Stakeholders! So Much Consensus Building!
Nonprofit leaders generally have less authority than their for-profit counterparts partly because
they have to honor the disparate concerns of many more groups, each with a legitimate stake in
the organization’s mission and activities. This diversity starts with the board of directors.
“In most for-profit organizations,” explains Higgins, “people arrive with common goals. The
board of directors may have different viewpoints, but shareholder value as a fundamental goal
is something shared by the board, by the CEO, and by senior management. You start off
differently in the not-for-profit world, with each board member arriving with a different set of
goals and often different agendas. To manage that as a CEO is much more complex.”
“You have to have a much more consultative, inclusive decision-making style,” adds Peter
Goldmark, who was president of the Rockefeller Foundation for nine years in between
publishing stints at the Times Mirror Company and the International Herald Tribune. He now
directs the Climate and Air program at Environmental Defense.
Asked to comment on the implications of having to work with so many different stakeholders,
Novelli rattles off a few: “Eternal consensus building, slow decision making, slow to act.” When
he first took the helm of AARP, Novelli brought in a business school professor to help him think
about the organization’s processes. “Around here it’s ready, aim, aim, aim,” the consultant told
“There’s nothing wrong with consensus building,” Novelli is quick to add. “It’s just that it
shouldn’t be 100 percent consensus. It’s not like the mailroom guy has to weigh in. There has
to be an end to it.”
Schlosberg has seen this dynamic at work. “In the for-profit sector you often had to make
decisions with incomplete information. In the foundation world, the time it took to make
decisions was uncomfortably long at first.”
“You have to lead by consensus and by influence as opposed to by pure management,”
explains David Chernow of JA Worldwide (Junior Achievement). Chernow, who ran numerous
for-profit cancer treatment centers and practices before leading JA Worldwide, says
this lesson was seared into him when Junior Achievement merged its international and U.S.
operations. “You can’t just come in here and wield a stick and make things happen.”
Harold Williams, who was chairman and CEO of business conglomerate Norton Simon
before becoming dean of UCLA Anderson School of Management, chairman of the Securities
and Exchange Commission, and founding CEO of J. Paul Getty Trust, counsels crossover
executives to be clear-eyed about how their authority will change. “You will have little
opportunity to lead by making decisions,” Williams says. “You’ll have the power of the budget to
some extent, but if you have a vision or you want to make any changes, you’re going to do it by
leadership and by inspiration and not by direction. You’ve got to be a Pied Piper.”
The Elusive Art of Nonprofit Measurement
Measuring performance in nonprofits is notoriously difficult. “You don’t have a simple financial
metric that is really central,” says Goldmark. “You are dealing with more squishy and intangible
issues of social change or public attitudes and behavior.” In spite of the challenge, our
crossover leaders agreed that it is important to develop meaningful metrics, however imperfect.
“The lack of having a bottom line is truly underappreciated,” explains Schlosberg, “as is its
importance in enabling an organization to have focus and come together. It becomes much
more of a challenge to evaluate not only the organization, but individuals and their performance
as well.”
“How do you do this in artistic organizations?” asks Levy. “My director of festivals will say, ‘I
want every festival I do to be the best, better than the year before.’ ‘Well,’ I say, ‘what do you
mean by that?’ Translating a better festival into results that are measurable and that you
can gauge over time is a major effort in an artistic organization and in most nonprofits.”
Most crossover leaders agree that the drive to measure performance often goes against the
nonprofit grain. “Bringing that tough-minded, analytical decision-making process is difficult
given the cultural differences,” says Judy Vredenburgh, a former fashion executive who spent
six years as senior vice president of the March of Dimes, and another five and a half years as
CEO of Big Brothers Big Sisters. In her for-profit life, Vredenburgh was almost obsessively
focused on speed and results, but she found the nonprofit world was decidedly not. “I
remember not achieving a number that I said I would achieve early on,” she recalls, “and I
thought, ‘Oh my goodness!’ But no one even noticed.”
Catherine Meloy, who was a senior executive at Clear Channel Communications before taking
over the Washington, D.C., region of Goodwill Industries, found that even bringing what she felt
were basic budget practices to Goodwill involved true culture shock. “I said, ‘Let’s benchmark.’
It became a joke. People said: ‘Does she have to question everything? Doesn’t she trust what
we’re doing?’”
Communications in a Fishbowl
Communication is central to effective leadership in any setting, but our crossover leaders say it
is much more so in nonprofit organizations. “It’s extraordinarily more important in nonprofits as
a means of influencing and motivating,” says Vredenburgh. “In the end, the CEO of a nonprofit
has to be the external communicator and external relationship builder, and that means
he or she has to be the chief fundraiser. In a forprofit, you have investor relations – but it’s on
the side. It’s not a core function.”
A related challenge – one that trips up even seasoned for-profit leaders – is the public and the
press’s unblinking scrutiny of nonprofits. A few regulated for-profit industries, such as
healthcare, may understand what it feels like in the fishbowl. But in general, “people in the forprofit world don’t really think of themselves as operating in the public view,” says Richard
Leone, who ran the New York Mercantile Exchange and the investment bank Dillon, Read &
Company before taking the helm at the Century Foundation. “People in the nonprofit world tend
to deal with that much more than people in the for-profit world because they tend to have
broader constituencies. They have to fundraise, they have a community they’re trying to serve,
and they have the kind of goals that get spelled out in public ways.”
Novelli agrees. “Many for-profit CEOs and high-level executives don’t understand politics.
Politics is almost always present in not-for-profit worlds. You’re essentially using advocacy as
one of your tools.”
Doing More With Less
Our crossover leaders all agreed that the nonprofit sector’s funding shortages and lack of
training make building strong organizations especially hard. “For-profit executives don’t
understand how difficult our jobs are,” says Vredenburgh. “Every time we in nonprofits satisfy
customers, we drain resources, and every time for-profits satisfy a customer, they get
resources back. That sounds very simple, but it has huge implications, and I don’t think the
for-profit people really get that.”
“They’re [nonprofits] difficult to run,” adds Williams, “in part because they are more hand-tomouth, and because the quality and amount of staff is thinner than it is in a typical corporate
environment. In many respects the typical nonprofit leader is much more entrepreneurial
than the typical chief executive in the corporate world. You have fewer resources, fewer staff,
and less certainty.
“Many of the managers of nonprofits have come up what I call ‘the substantive side,’ without
management training,” says Williams. “It really limits the ability of people in the nonprofit sector
to scale up. It also contributes to the tendency of the for-profit people on boards to say, ‘This
guy doesn’t know what he’s doing.’”
“I had to become more of a teacher than I had been before,” says Schlosberg of his foundation
stint. “I spent a lot of time blocking and tackling. I put a management committee together,
upgraded human resources, got a planner in here, named a chief financial officer.”
Schlosberg, who also observed many smaller nonprofits from his perch at the Packard
Foundation, came away convinced that “in the nonprofit sector there’s much more reliance on
the leader, and less developed teams and talent underneath. I see under capacity all over
the nonprofit sector.” Many good managers in the nonprofit sector would agree on the need for
capacity building, but simply can’t get donors to support it. “In the forprofit business,” says
Chernow, “you spend an enormous amount of money on that training. Here, if we went out
to corporations and foundations to give us money to develop capacity in our organization and to
build leadership, it’s not as readily accepted. It’s hard to get that kind of investment.”
Beyond training a management team, even hiring the right people is harder in nonprofits.
Salaries in the nonprofit sector are typically not competitive with those in the commercial
sector, yet the need for management talent is just as great. “I come from a Wall Street
environment where if you really wanted somebody you just threw a huge amount of money on
the table,” says Leone. “The nonprofit world is obviously different.” Intense donor pressure
to keep administrative overhead low further hobbles many organizations’ ability to hire good
Despite all their drawbacks, nonprofits have one clear advantage when it comes to attracting
and retaining staff: their inspiring missions. “The missions are so powerful
that you can attract really good people,” says Novelli. “There was a guy from Levi Strauss who
said, ‘I don’t want it to say on my tombstone that I shipped a million pair of jeans.’ That’s
How to Be a Better Crossover Leader
Whether serving as nonprofit board members, donors, partners, or executives, business
leaders can play their nonprofit roles better by understanding the differences between nonprofit
and for-profit organizations. Below, we suggest how both business and nonprofit leaders can
help one another excel.
Board members. Too often, business executives who sit on nonprofit boards don’t take their
role as seriously as they do their corporate board role. Many consider it a hobby or a “do-good”
contribution, rather than a real responsibility, and so they don’t invest enough time or
energy into understanding the organization. “When it comes to a nonprofit board,” says
Vredenburgh, echoing the sentiment of many in our group, “the sophisticated,
smart, for-profit people sometimes leave their heads at the door.”
On the performance side, many for-profit executives on nonprofit boards come to understand
that measuring social change is challenging and costly. But rather than developing performance
measures that are both meaningful and doable, they often throw in the towel on measurement,
deeming it nearly impossible. Or they simply focus on keeping administrative costs low without
a careful consideration of what is needed to ensure program quality and impact. As a result,
they too often wind up starving nonprofits of much-needed managers, even though they would
never consider running their own businesses without, say, a COO just to keep overhead
Instead of abandoning performance measurement, Levy suggests that board members spend
more time applying for-profit pragmatism and creativity to the problem of nonprofit performance
measurement. For their part, nonprofit leaders must help business leaders recognize that
nonprofits also need to invest in management and capacity, instead of minimizing
administrative costs.
Board members from the business sector are often impatient with the pace of change at
nonprofits because they underestimate how long it takes to build consensus among the many
stakeholders. To counter this, nonprofit CEOs should be clear – and unapologetic – about
the need to consult with board members, staff (and not just the senior team), important donors,
and sometimes partners and policymakers before making major changes in how the
organization operates. Instead of being bogged down by frustration, for-profit board members
should offer to participate in discussions with other board members, donors, and staff. By
helping with some of the political heavy lifting, business leaders can accelerate the pace of
Donors. Many donors fail to use their considerable influence to push for better performance at
the nonprofits that they fund. Or when they do demand results, they focus on the wrong
metrics, such as low administrative overhead, which only hinders the building of a
strong organization. To counteract this, nonprofit leaders can teach donors about useful,
even if imperfect, measures of impact. As for overhead, nonprofits must inform donors that
an organization’s programs are only as good as its management, and that they should be
willing to fund administrative overhead.
Some donors advocate for their pet programs, or insist that the organization take on
activities peripheral to the current focus, leaving nonprofits unable to direct their resources
to the highest impact activities. Donors should make sure that they are not distracting the
organization from its primary mission. Meanwhile, nonprofit leaders should push back on
their donors – difficult as that might be – rather than venturing off-mission.
Donors often demand a tremendous amount of attention from the executive director, in some
cases seeing it as a return for their generous gift. Donors should understand that the executive
director is juggling many stakeholders, and so should minimize their demands on the executive
director’s time.
Partners. Corporate partners often don’t realize that nonprofits lack management, marketing,
and communications expertise and personnel. Because funding is often restricted to programs
and services, nonprofits simply lack the resources to develop these capacities. Unfortunately,
these are precisely the areas often needed for corporate partnerships. Or when nonprofits do
have the personnel, they are usually stretched thin from running day-to-day operations. These
people can’t free themselves up quickly to work on a corporate partnership without leaving the
organization dangerously undermanaged.
As a result, corporate partners often grow impatient with nonprofits’ inability to meet their
commitments, and walk away from the partnership. Instead of giving up, or complaining about
the nonprofit’s lack of capacity or sophistication, business partners should invest their time and
resources into helping the nonprofit build capacity. Although not all corporate partners will
be persuaded to do this, our experience suggests that if nonprofits are clear about their
management limitations, some business leaders will be responsive.
Executives. All too frequently, for-profit executives who venture into nonprofit leadership
expect to implement big changes as quickly as they did in the for-profit world. They often fail to
consult with key stakeholders before making important decisions. They don’t give the
organization time to get to know and trust them. And they don’t take the time to get to know the
organization’s culture, informal power structures, and ways of working.
As a result, their big plans are often rejected by the staff and board, and the executives
end up quitting in exasperation. The remedy to this problem may be obvious, but that doesn’t
mean it is easy to implement. Nonprofit neophytes need to get to know the organization before
proposing any changes. They need to take the time to talk with all stakeholders about any new
ideas before suggesting them. And they should avoid unilateral decisions, and instead should
involve their board, staff, and stakeholders as appropriate. (For more thoughts from our
crossover leaders on transitions, see “Crossing Over” on p. 40.) Their new nonprofit colleagues
should alert the new boss to these needs and help him or her make the necessary time and
Building Bridges
Two messages linger from our conversations with crossover leaders. They agree that nonprofit
work has been the most challenging and rewarding of their careers. And they emphasize that
everyone has a stake in creating a high-performing nonprofit sector, because the solution of
so many of society’s problems depends on it.
“These misunderstandings matter,” says Leone. “The business side’s failure to understand the
complexity, nuance, and criteria for judging success on the nonprofit side has tremendous
effects, both on fundraising [and on people’s] understanding of how we’re going to address
certain problems effectively.” That is why it is important for business and nonprofit leaders alike
to engage in frank discussions about the differences between the two sectors and how
executives can overcome them.
“The true measure of making all this work,” concludes Novelli, “is to get the talent flowing in
both directions. Make not-for-profit managers better so that they can be accepted on the other
side of the bridge. And make for-profit people more understanding so they see the value of
people from the not-for-profit sector. Not just value them because they know they can run a
piece of business, but value them because they understand missions, they understand social
change, and they understand social values.”
LES SILVERMAN and LYNN TALIENTO were co-founders of McKinsey & Company’s Global Nonprofit Practice in
2000. Silverman led the practice until his retirement from McKinsey in 2004. He is now an adjunct lecturer at
Georgetown University’s McDonough School of Business and also serves several nonprofit and for-profit
organizations as a board member and strategic adviser. Taliento is a partner in McKinsey’s Washington, D.C.,
office, where she co-leads the Global Nonprofit Practice.
Crossing Over
How do you make a successful transition from the business world to nonprofits?
Here’s advice from six executives who have done just that.
“You will have little opportunity to lead by making decisions. You’ll have the power of the budget to some extent,
but if you have a vision or you want to make any changes, you’re going to do it by leadership and by inspiration and
not by direction. You’ve got to be a Pied Piper.”
–Harold Williams, former CEO and chairman of the business conglomerate Norton Simon, and former CEO of the J.
Paul Getty Trust
“Unless that person is really unusual or unique, I think it would be a mistake for somebody to jump in and run
CARE or run AARP without any not-for-profit or public sector experience. If I were [on] a board I would never
choose such a person. … It would be very difficult for somebody to walk in out of a corporate setting and just
take over a not-for-profit. … We don’t teach humility in business school, do we?”
–William D. Novelli, CEO of AARP, and founder and former president of the public relations firm Porter Novelli
“Have a passion for that organization’s mission. Otherwise, the frustrations just wouldn’t be worth it. Recognize
that everything is consensus building. Know that you have the affirmative responsibility to project in every setting
the critical importance of what the organization does – to funders, to media, to potential volunteers, to all
the constituents.”
–Philip Lader, chairman of the communications services firm WPP Group, and former university president and
White House deputy chief of staff
“Don’t assume that the senior staff has the same business training and business background that you’re accustomed
to and that you may take as second nature. Be prepared to teach and be helpful in that respect. Finally,
don’t think that it’s less of a real job. One of the chuckles I got when I came here was from many of my friends in
Southern California, who to this day don’t believe I really had a real job. ‘How hard can it be, Dick, just writing
these checks?’ Don’t underestimate the degree of difficulty of working in a complex nonprofit organization.”
–Richard Schlosberg, former president of the David and Lucile Packard Foundation, and former publisher
and CEO of the Los Angeles Times
“The nature of passive resistance within a nonprofit setting is at levels that could teach Gandhi lessons.”
–Reynold Levy, president of Lincoln Center for the Performing Arts, and former president of International Rescue
“What people should do is stop and try to objectively assess what they’re best at and what those skills are. Then
bring those to the not-for-profit. I think people arrive and they actually hide. [Instead,] people should be exercising
those skills and leading with those skills. Some of the most outspoken people in the for-profit world arrive
at a not-for-profit board and become the least vocal.”
–Robert Higgins, founder of the venture capital firm Highland Capital Partners, and former executive director
of the John A. Hartford Foundation
Here are several resources with information on nonprofit and board development matters:
NC Center for Nonprofits
Almost all NC nonprofits belong to NCCNP. The organization is an excellent information
resource, lists job openings, organizes conferences and lobbies on nonprofit issues. ESC is a
1110 Navaho Drive, Suite 200
Raleigh, NC 27600
User name: Trudy.Smith
Password: doinggood
Board Source (formerly the National Center for Nonprofit Boards).
Wide selection of governance and related materials for sale – expensive but very well done.
Some information on website. ESC is a member.
1828 L Street, Suite 900
Washington, DC 20036
USER NAME: kwhescgt
PASSWORD: dumc3669
Minnesota Council of Nonprofits
A very helpful site with much governance and nonprofit guidance information.
2214 University Avenue W. 20
St. Paul, MN 55114
John Carver is a well known board governance authority who has created the Carver Governance
Policy Model a different approach to nonprofit board governance. The website has a summary of
his model and lists his books and publications.
National Center for Nonprofit Organizations
A network of state and national associations. Some resource information on website.
1030 15th Street, NW, Suite 870
Washington, DC
On Google – search using only the word NONPROFIT. You will find a surprising number of
helpful sites with good information.
Guidestar (Free, create your own account)
Network for Good
NC Gives
Triangle Gives Back
The Volunteer Center of Durham
www.the volunteercenter.org
New IRS Form 990 Link to this:
Understanding the Changes
The Minnesota Council of Nonprofits has published a series of videos to help managers better
understand the new Form 990. Click here to access the videos.
The IRS has a case study for a fictional organization that includes a sample completed Form 990
and a video series on common reporting issues.
Governance Policies
Did you know that the new Form 990 asks if your organization has specific policies and
procedures in place? This free set of sample policies and procedures addresses the governance
areas that the new form asks about:
Conflict of Interest
Document Retention
Private Inurement
These sample policies and procedures should be customized to meet the needs of your
organization. Click on the image below to download the document as an Adobe PDF file.
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