# Dear Executive Director, please fire your staff

It’s important that everyone involved in a nonprofit’s mission be accountable. We are working to find the organizations that use their resources in the best possible way. You all are hopefully keeping an eye on our work to test the reasoning in our reviews, and to make sure that we are choosing the best organizations for each cause. And watchdogs like our colleague Mr. Straw Man are always checking to make sure that certain line items in the budget don’t get too out of hand.

What about nonprofits’ employees? From my experience starting a national non-profit and working with a number of others, one difference between the nonprofit sector and for-profit sector that has really struck me (and I can only speak for what I’ve seen) is that nonprofits are much worse at doing internal evaluation of personnel, and most of the time it barely happens at all. What does it matter if Bill is not as good as he could be at fundraising, or if Jane is as good as she could be at managing a project, so long as they have their hearts in the right place? That’s what matters: people who share a common goal to make the world better in their cause, and who are willing to work toward that goal, regardless of whether they are necessarily the best at what they are doing…

Go ahead, ask a non-profit that you are considering donating to:

“Hey, when is the last time that you fired someone? Ok, not recently … well, how about a negative review, gave a salary cut as punishment, or put someone on probation?”

In a for-profit enterprise this sort of thing happens constantly, and most would argue that companies are better off because it leads to better employees and a better company. However, I bet that non profit organizations would be shocked if you asked that sort of question as part of a list along with the laundry list of questions related to program and financial management. But it’s the same thing: spending money wisely includes making sure that your employees are as good as they can be, and that is only accomplished through honest and fair evaluation … sometimes that means firing people.

So make sure you’re asking this question. And executive directors, have the heart to fire anyone who isn’t the best person for the job.

• Donald Lobo on March 13, 2007 at 11:56 pm said:

While we are at this, you should also consider the other parts of the system, the funders, the board, the executive director. Don’t see too much of accountability at the foundation level either? How many program officers or foundation heads have been fired for doing a bad job? (quite a few CEO’s have been pushed out in the for-profit sector). How many ED’s have been let go?

• In an earlier posting (The Customer Is On Your Side) you implied that you expect nonprofit employees to be working for less money than their counterparts in the for-profit world when you stated, “As a nonprofit employee, you’re presumably sacrificing some income to help the particular organization you’ve chosen – that makes you the donor.” Yet in this posting you advocate holding them to a high standard of competence. I agree there should be a high standard of competence, but I would suggest this should coincide with advocating competitive wages and a professional workplace in general.

• Holden on March 14, 2007 at 3:37 pm said:

I agree that nonprofit professionals should be compensated competitively – but getting to work for a mission you believe in is part of compensation. If my employer offered to pay part of my wage by donating to my favorite charity, I’d definitely be willing to take a lower salary in return (esp. since I would make that donation myself if they didn’t). I’m not saying the relationship is one to one (I might require $2 of donation for every$1 I forfeit), but it counts. That’s how nonprofit professionals should think of their pay: the extent to which they make less money is the size of their donation.

That’s how nonprofit professionals can simultaneously make less money and equal compensation. To be clear, I am NOT suggesting that pay be significantly lower – my impression is that many nonprofit professionals are currently underpaid to an extent that isn’t reasonable (i.e., such that their total compensation is also lower than their peers’). But conceptually, lower salaries with equal accountability/standards can make sense.

• MichiganBob on March 14, 2007 at 5:15 pm said:

Donald, thanks for the post demanding that I look at the broader picture. I totally agree that we need to look broader across the wide range of stakeholders to establish real accountability. In particular, I’ve had some personal experience related to the ED situation you mention that I’m hoping to explore a little bit in a future post.

More generally, I want to take this space to explore my views on the internal running of non-profit organizations, beyond the more programmatic work that we have focused on in our reviews (along with whatever else comes to mind). So look out for those thoughts in the future, and definitely keep on top of me to look at the bigger picture.

• Matthew Monberg on March 16, 2007 at 7:50 pm said:

RE: employee reviews, probation, and termination–I have done all of those things in the past year. Every employee gets a formal annual review and our CEO is reviewed annually by our board. I am evaluated more here than I was working in the for-profit sector.

• The GiveWell Blog - Exploring how to get real change for your dollar. » BRB on May 5, 2007 at 12:14 pm said:

[…] Dear Executive Director, Please Fire Your Staff. MichiganBob is fed up with charities’ being nice to their employees – at the cost of the needy. […]

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