Home / nonprofit / nonprofit executive director employment contract NONPROFIT EXECUTIVE DIRECTOR EMPLOYMENT CONTRACT 13/08/2021 True Story #1: An whole executive committee intimidated to reauthorize, fed up with the performance of the Executive Director. I walked them back from the ledge through a straightforward question: “Have you ever before offered her a performance review?”Uh. No.You watching: Nonprofit executive director employment contractWow.True Story #2: “Your board just fired you? What did your contract say around termination?”Uh. What contract?Wow.My frifinish Kevin Cathcart is a long time (lifer?) E.D. and a guy with a mission as soon as it comes to contracts. My 2 stories are emblematic of the dozens he has heard via the years. (Full disclosure: Kevin is an attorney and also may have a dispositional fondness for contracts.)So how specifically does a nonprofit organization advantage from Executive Director contracts?MYTH BUSTERS: EXECUTIVE DIRECTOR CONTRACTSLet’s start through the 4 major myths:E.D.’s are lucky to have their tasks and also thus don’t need contracts.E.D.’s need to be treated choose all other staff – they are at will employees.This is a nonprofit. We’re prefer family. Contracts break the familial bond.We’ve never before done this with any kind of previous E.D. so we should not collection a criterion.JOAN GARRY: MYTH BUSTERThese reasons are nonsense. First of all, while E.D’s are definitely lucky to have the possibility to do systematic work, they deserve to also have the right to standard employment agreements. These are not mutually exclusive.It’s crucial to remember that Executive Directors are NOT like all various other staff. They are leaders, exterior dealing with. The resigcountry or termination of an institutional leader is an entirely different kettle of fish as it relates to the stcapability and the credibility of the organization.As for nonprofits being “favor family,” I’m sorry. It’s simply not true. We carry out have actually a unique bond that originates from the shared endure of trying to relocate mountains. But change at the top is a vast point for an organization and also there have to be real framework and also stcapacity in that kind of adjust.Most importantly though, great ideas are worth doing – regardmuch less of whether or not they have been done prior to.So why are E.D. contracts such a great idea? Here are ten reasons.TEN REALLY GOOD REASONS EXECUTIVE DIRECTORS NEED CONTRACTSIndusattempt Standard. If you have even more than 5 employees and also a budget over $500K, it is the appropriate and responsible thing for a board to execute and also has end up being the sector traditional in the nonprofit human being.Feedago. Contracts set a schedule for an yearly testimonial. All employees are at their ideal via continuous (this means on time) feedback and clear objectives for the coming year.Risk Management. Contracts minimize the possibility of litigation. Maybe you think the reverse is true. Wrong. Ambiguity leads to litigation quicker than differing interpretations of a legal record.Dispute Processes. Contracts specify a process for hammering out debates. Wouldn’t it make all the feeling in the civilization to have actually that process in location BEFORE tbelow are disagreements?Recruitment.See more: Fundraising Consultant For Nonprofit Organizations, Full Service Nonprofit Firms Contracts aid tempt the best feasible candidates for the leadership function. Let’s say you want to leave a huge corpoprice job and also step into the unknown. A contract is a protection blanket and an illustration of trust.Clarity. Contracts plainly specify the role and also expectations.A solid contract goes better than a simple task description.Stcapacity. Transitions hurt establishments, regardmuch less of the caliber of the leader. The work is too crucial – tbelow demands to be an intentional carry of power.Retention. Contracts honor the leader and build trust with the board. A contract does not diminish trust in any way. In truth, the details in a contract store things clear and clarity builds trust. Trust drives retention – remember: excellent Executive Directors acquire good project offers.Maturity. Contracts are evidence of a grownup management in a grownup organization. A grownup organization values its leadership and creates real mechanisms for accountability.Here’s another item of compassionate truth telling:Boards Are Terrible Employers.This is a general statement and also tbelow are plenty of exceptions.But it is my firm idea that this part of the board’s responsibility falls by the wayside far as well regularly. Yes, board members are busy and volunteers. But this one – the monitoring and also supervision of your senior executive – is just one of the most important duties you have.And a contract through your senior executive makes that project much easier, not harder.Sold? I really hope so. At the exceptionally leastern, consider circulating this short article before the following executive committee or board meeting and also have actually a genuine conversation around it.