Managerial Excellence: A Funder’s Perspective
As senior vice president at Fifth Third Bank, Nicole Johnson-Scales oversees the bank’s community development efforts and forges strategic partnerships with nonprofits to support meaningful change. Recently Axelson Review asked her to discuss issues surrounding nonprofit managerial excellence.
Q: In your view, what’s the single most important component of managerial excellence?
A: It all starts at the top; when the right leader is at the helm, all other aspects of managerial excellence fall into place. A strong leader hires individuals who move the organization forward in a sustainable way.
I encourage all leaders to approach nonprofit work as they would for-profit work. If I meet with an executive director and she tells me all about the group’s mission and programs, but can’t answer questions about how the organization is run, then I get concerned. All organizations need a person at the top with a solid business sense.
Q: Are there aspects of nonprofit managerial excellence that need more attention?
A: I’d like to see human resources functions—in particular, employee engagement and succession planning—receive more energy.
Nonprofit staffers typically don’t earn huge salaries; they do their jobs to make a difference, not to make a buck. So it’s particularly important to give them professional development opportunities. After all, there are plenty of good nonprofits out there, and staffers may move to another organization if they are not being challenged.
I also look for succession plans. There needs to be a Plan B in place to replace an executive director. It’s hard for funders to get excited about a partnership if there’s uncertainty about future leadership.
Q: The Axelson Center names a “strong sense of integrity throughout organization’s culture” as one defining feature of managerial excellence. Any thoughts?
A: I completely agree. I want to see that the organization is transparent with all stakeholders—financials should be shared with everyone from board members and key investors to program staff and volunteers.
I also look for nonprofits that stay focused on their mission and resist the temptation to “chase the money.” Suppose I meet with the ED of an organization and I say, “My bank really likes to invest in financial empowerment programs.” If the director responds by offering to launch a financial empowerment program, even though it wouldn’t align with the mission, that raises red flags for me.
If we’re not a good fit for you, just say so. I’ll appreciate your candor—and I’ll remember you when I meet a funder who might be a better match. That’s a good way to start building a sustainable, long-term relationship.
Q: Can you describe a few ways that you measure a nonprofit’s performance?
A: I study the financials, of course, since they give me a sense of how well the group will manage any money I might give them. But the budget doesn’t always need to be balanced. If you can show me why it’s not balanced, and tell me what you’re doing to address the issue—in other words, if you can show me that you know your business from top to bottom—I’ll be impressed.
I also look for quantified program impact. If we’ve partnered before, I want to learn how the money was used, and what kind of effect it had on the community. If we haven’t partnered before, I want to see other examples of quantified impact.
Q: Do you have any other advice for nonprofits wanting to raise the bar on managerial excellence?
A: Step outside of yourself, and try to see things from the funder’s perspective. You and your funders should enjoy a win-win relationship. So ask what’s important to your funders. You need to know what matters to them if you want to be a true partner.