Your Nonprofit's Backbone: CEO and Board Essentials with Special Guest Bob Lonac
Your Nonprofit’s Backbone: CEO and Board Essentials with Special Guest Bob Lonac
Welcome to the Nonprofit Launch Plan podcast! In this episode, host Matt Stockman sits down with special guest Bob Lonac, a seasoned expert in nonprofit leadership with a remarkable career, including roles at Young Life, International Justice Mission, and CRISTA. Bob is also the author of "Live Large: Seven Lasting Lessons for Navigating Life's Twists and Turns" and a sought-after consultant specializing in the crucial relationship between a nonprofit CEO (or Executive Director) and their Board of Directors.
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What You'll Learn in This Episode:
• Understanding Core Roles: Bob Lonac breaks down the fundamental differences between the CEO/Executive Director's responsibilities and the Board of Directors' functions in a nonprofit.
• "Working In" vs. "Working On" the Mission: Discover the critical distinction between day-to-day operational work and strategic oversight, and why your board should primarily focus on "working on the mission."
• Building Your Board: Learn what to look for when adding initial board members to ensure a healthy and effective governance structure.
• The Power of Blue Ocean Strategy: Bob introduces the concept of Blue Ocean Strategy and how identifying a unique niche can significantly impact your nonprofit's success and growth, drawing examples from organizations like International Justice Mission (IJM).
• Key Board Responsibilities: Get clear on the essential duties of a nonprofit board, including CEO evaluation, ensuring financial health, and providing strategic guidance.
• Establishing Clear Boundaries: Practical advice on how to unwind situations where board members are too involved in daily operations and how to foster a spirit of openness and transparency.
• Speaking with One Voice: The importance of the board making unified decisions through resolutions, not individual directives.
• Board Evolution and Term Limits: Why and how a nonprofit board should evolve over time, including the benefits of implementing term limits for board members.
• The Importance of Humility in Leadership: Bob shares a profound insight from the Harvard Business Review on the most important quality of a great leader – finding people better than you and empowering them.
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Key Takeaways for Nonprofit Leaders:
• Define Roles Clearly: From day one, establish clear job descriptions for both the CEO/Executive Director and the Board. The CEO sets the vision and strategy; the board hires and evaluates the CEO based on outcomes and oversees long-term success and financial health.
• Strategic Board Engagement: Your board's primary role is to "work on the mission"—focusing on future planning, governance, and accountability, not day-to-day tasks.
• Embrace Feedback: Annual, written evaluations of the CEO are crucial for growth and accountability, provided they are delivered with a spirit of support for the CEO's success.
• Don't Go It Alone: Building a successful nonprofit requires a team of diverse talents and a deep commitment from leadership.
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Resources Mentioned:
• Guest: Bob Lonac
• Bob Lonac's Website: boblonac.com
• Book: "Live Large: Seven Lasting Lessons for Navigating Life's Twists and Turns" by Bob Lonac
• Book: "Blue Ocean Strategy" by W. Chan Kim
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Connect with Nonprofit Launch Plan:
• Subscribe: Don't miss future episodes – subscribe to the Nonprofit Launch Plan podcast!
• Free Consultation: Book a free, no-obligation call with Matt Stockman to discuss your nonprofit journey: Contact | Nonprofit Launch Plan
• Free Resource: Access the "Fearless Fundraising Framework" workbook and videos to build your fundraising confidence: Nonprofit Launch Plan | Consulting & Fundraising for Nonprofits
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SEO Keywords to Consider (already integrated above, but for your awareness): nonprofit, nonprofit leadership, CEO, Executive Director, Board of Directors, nonprofit board, startup nonprofit, small nonprofit, nonprofit management, nonprofit governance, fundraising, operations, strategy, vision, accountability, Bob Lonac, Nonprofit Launch Plan, Blue Ocean Strategy.
Bob Lonac: So that's really the board's responsibility, is keep it financially healthy and keep a great functioning CEO.
Matt Stockman: Welcome to the Nonprofit Launch Plan podcast for startups, small and growing nonprofits. This podcast exists to help you build your nonprofit from the ground up on a strong foundation. So in every episode we give you the frameworks and the tools and the personalized guidance that you need to create lasting impact.
My name's Matt Stockman. I'm your host, thrilled you're here. At Nonprofit Launch Plan, we believe that every nonprofit has gotta be operating at peak performance in six key areas in order to be successful. And those six areas are leadership, development or fundraising, marketing, programs and services, operations, and finances. So on every episode of the podcast, we talk about a topic that is core to one of those six areas, and sometimes all of those six areas all at once.
Now, before we jump into today's episode and the topic I've got for you today, if you just found the podcast, take a moment to subscribe right now so that you don't miss the next episode. And also, as a quick reminder, it's really easy to get some free time on my calendar. You can just go to nonprofit launch plan.com and click on book a call. It's free. There's no obligation. I would love to hear everything that's happening as you are starting your nonprofit journey, or wherever you happen to be at in your nonprofit journey.
Now, today I am stoked to be able to introduce you to a special guest with me on today's episode of the Nonprofit Launch Plan podcast. My guest is Bob Lonac. Bob has a long career in nonprofit leadership, including 30 plus years with the organization Young Life. Bob was also the COO of the International Justice Mission, which is based in Washington, DC and also spent 13 years - and this is where I met him -Bob was 13 years as CEO and President of CRISTA, a family of nonprofit ministry organizations that's based in Seattle, Washington. Bob is also the author of a book called Live Large Seven Lasting Lessons for Navigating Life's Twists and Turns. And he's a consultant that specializes in working with organizations on the relationship between the CEO or the executive director and the board of directors, and for startup and small nonprofit leaders - This is a crucial relationship, that is important to set up properly from the beginning. So if you are at the beginning of your nonprofit journey or you're new in your leadership role in a nonprofit, I think you'll find a few really practical ideas and principles in the podcast episode today from Bob to help you set up a clear relationship and clear boundaries and functions of the CEO of the organization or executive director or whatever the title is, and the board of the nonprofit and also if you're inheriting a board structure that maybe you didn't have anything to do with setting up, you're the new leader, or you are a new board member - This conversation today will shed some light on how to create a healthy relationship between a board and the executive director or CEO of the nonprofit so that the relationship exercises the power that it holds.
And also, I'll pause the conversation at a couple of points throughout the episode to be able to recap and synthesize some of the thoughts and ideas. So I'm excited for you to hear it. Without further ado, let's jump into the conversation with my author and my friend Bob Lonac.
Matt Stockman: So well, let's start at the beginning then, Bob, just kind, kind of help, uh, um, a listener to the podcast to understand if they're just starting in their nonprofit journey. Can you kind of help break down the fundamental differences that you see that there are in roles between the CEO or the executive director, the person running the operation?
Bob Lonac: Well, believe me, when it comes to founding, I've had some, you know, recent experiences with people that have had great ideas. Mm-hmm. I think probably a real vision and they, because they're those kind of people, they have friends around them, and those are the first people that they asked to be on their board.
And, um, neither side knows anything about what boards are supposed to do and what founders and CEOs are supposed to do. They just have a passion for the ministry. So I think the first thing that really helps if you either work in the mission or you work on the mission. So working in the mission is you do the stuff which everybody gets involved to wanna do.
That is. Whatever it is that means, you know, when I was way younger, I was a young life leader. Well, you working in the mission was like leading a young life club. You go to the place you find kids, you talk to 'em about Jesus, you raise money, you do all this stuff that's working, uh, doing mission.
Well, working on the mission has to do with planning the future. There are some deep, difficult questions right away. That I see always raise their head. Mm-hmm. I think the number one thing is when I ask people, how are you gonna know if you succeed or not? What's the purpose and how do you know what that's gonna be? And then the same is for the board. What's the purpose of the board? One of the things that also helped me, uh, in life was reading a book called Blue Ocean Strategy. I don't know if you're familiar with that book. Well, I'll tell you who started a Blue Ocean Strategy business.
Bob Lonac: Amazon. Nobody else is doing it. Right. So if you, you have no competition, you got a lot better chance of succeeding. Yeah. The same thing is, is true in God's work. You know, I fell into a big ocean strategy ministry, um, called the International, uh, justice Mission. Their goal was to change the way the church thought about God's heart for justice.
Bob Lonac: That fell out of favor with the church about a thousand years ago, and nobody really thought about justice as a ministry. Mm-hmm. Well, Gary Hogan founded it. If they had a few leaders, they had three people on the board, and uh, I came along and thought, man. This is amazing. Nobody else has done this. And actually we, we more than doubled the size of it every year for the five years are there?
Bob Lonac: Mm-hmm. It went from, um, about a, I think about a million dollar budget, and today I think it's over a hundred million. Wow. Now you can't go to a church without anybody saying God's heart for slavery, God's heart for rescuing, you know, forced prostitution. Right. That was all started by IJM. So you get the idea about the blue, blue ocean.
Bob Lonac: Yes, absolutely. Now, so then what if somebody comes along and says, well, I, I'm gonna start a ministry to meet lead people to Jesus that are 30 years old or more, well join the crowd, right? Um, I'm gonna start a new church. There's, there's the ultimate not blue strategy, right? Now that doesn't mean you couldn't dream up a new way to have the church.
Bob Lonac: Right. But if you're just doing the same thing down the street, it's gonna be a tough, tough deal. To start up. When it comes to adding board members, what should an executive director or somebody in a CE CEO role, what should they be looking forward in initial board members? Well, it should first of all have a very clear idea what the job description for the CEO is, okay.
Bob Lonac: And what the job description for the board is, and what's the purpose. See, most people join a board because they love the idea and they want to contribute to the mission. They don't want to contribute to being. On the mission. They want to do the mission and 'cause they came to a meeting or they know the person or whatever.
Bob Lonac: Right? Right. They don't know anything about a board. So founders and CEOs, okay. Their job is to paint the vision and develop the strategy by themselves and, and because think of this, look at the Bible. How did God call people? He didn't call groups. One by one. One by one. He called Moses. He called Abraham, he called whatever it's like and spoke to him and people, they say, yeah, God spoke to me.
Bob Lonac: Okay, that's good. If God spoke to you and said that he, you want you to do this, that's fantastic. Hmm. Write it down, get your vision out, and then find people that that either know are willing to be trained to be on the board. Because the board's job is very simple and strategic itself. That is to hire the CEO.
Bob Lonac: Mm-hmm. And to evaluate the CEO every year on how they're doing on the outcomes of the organization.
Bob Lonac: Alright. A couple of key points to spotlight here at this point in this conversation with Bob Loick. First, it's important that as a nonprofit leader, you recognize the essential difference between working in the mission and working on the mission. To Bob's Point, working in the mission. Is doing the actual work that your nonprofit has created for, that's the drilling of the wells, feeding the meals, teaching kids to read, helping teenage moms, all that.
Bob Lonac: Working on the mission is casting vision, creating strategy and processes that guide the nonprofit. And working on the mission is the sole function of your board. As the CEO or executive director, you've got a unique role, especially early in the life of a nonprofit to kind of switch hats to at times work in the mission, handing out the meals, and also work with the board in working on the mission.
Bob Lonac: And it's important that the CEO and the board are both understanding of the unique differences of working in and working on. The other key takeaway is Bob's recommendation of the book Blue Ocean Strategy. This is a book that came out back in 2005, which I've just now picked up at his suggestion since the recording of the conversation.
Bob Lonac: It's written by w Chan Kim. And the goal of the book is to shift the focus of businesses away from competing in saturated markets with a lot of competition, otherwise known as Red Oceans, to creating new market spaces, blue oceans, in other words, where you can thrive without a lot of competition. And as a new nonprofit leader.
Bob Lonac: Or a board member, it's really crucial to know that from the get go. How unique is your nonprofit? What specific and unique niche does it fill? And if it's not particularly unique, that's fine, but the growth curve early on could be a lot slower to build. Also don't miss what Bob said about the difference between the job description of the board and the CEO or executive director.
Bob Lonac: The job of the CEO is to cast the vision of the future because of the work the nonprofit will do and to develop that strategy to get there. And the job description of the board is to hire the CEO and evaluate the CEO on the outcomes of the organization. Now Bob unpacks some more functions of the board a little bit later on in the conversation, but understanding the fundamental job descriptions of both the CEO or executive director or founder and the job description of the board is crucial.
Bob Lonac: So let's jump back into this conversation with Bob Nik. So. CEO or the executive director, the leader of the organization comes up with the vision, comes up with the strategy. Right now, they don't have to come up with by myself suddenly, if they have a few other people that they trust and Sure. Yeah. But they present it to the board.
Bob Lonac: The board doesn't come up with it. Okay. And then the board, uh, is there just to hold the CEO accountable to what he's presented to them to begin with. Yes. And the spirit of this, of course, has to be taught too, because they're usually both pretty much rookies. Yeah. That's why I say it's good to have a consultant, which is what I do.
Bob Lonac: Right, right, right. So here, here's my list. Okay. I have actual, I've been working on putting this together. Right, right. Of course. So the board of director, principles of operation. Mm-hmm. What do board of directors really do? Every member shall make every reasonable effort to attend every meeting. Simple.
Bob Lonac: Right. Simple enough, right? Oh yeah. Some people say, well, I'll give 'em an E. Oh, you know, I, I'm busy. I can't come. I missed it. Yeah. I had to go do this. I had to do that. Well, especially early on, if you have three or five board P member, I think maybe four or seven or 10 is the, is the ideal when you get going.
Bob Lonac: Mm-hmm. Um, so, okay, come to the meetings, they shall, uh, demonstrate that. One of the top three priorities for each member adds to their volunteer service and financial support is this. If you're on the board now, you can give 'em money, you can do a lot of things to help, but don't be on the board if it's like your fourth or fifth or sixth priority.
Bob Lonac: Priority, understood. Board meeting shall be scheduled on a yearly basis, and reminders shall go out a month prior to the meeting. See, this is all simple stuff. Yeah, it's not very complicated. An agenda shall be distributed one week prior to the meeting. Resolutions presented by management shall be included with the agenda.
Bob Lonac: See, board can't come up with, Hey, I think we ought to do this. The board approved resolutions from the staff. New resolutions may be submitted in writing during the board meeting. In writing. Mm-hmm. During the board meeting stuff comes up, but that way I can't tell you how many PE times in organizations I've had somebody say, well we passed that organ re Well, did you write it up?
Bob Lonac: Do you have a written of the organization? Yeah. We all seem like very simple, fundamental things, but they mess you up big time. If somebody says, yeah, we passed that. Board responsibility oversees long-term success of the ministry, long-term success of the ministry. See, people think this is a little hard on the CEO, but the point is the board spirit is they want the CEO to to, to, uh, succeed.
Bob Lonac: You're not there to criticize. You're there to, right. Hey, I know something about that. I could help you do that. Nothing wrong with a board meeting. Say I board person, say, I know how to write strategy. Mm-hmm. See, 'cause the board has three hats. Board person helper to the CEO. Okay. And the third. And the third is resource development.
Bob Lonac: And resource development is donor support. And above and beyond then? Yeah. Like, hey, I know somebody that might fill that job or, gotcha. You know, it takes basically people in money to run the run things. Yep. Committee of the board shall con conduct in writing an evaluation of the CEO every year and set the compensation in according to that, and review the financial health of the ministry.
Bob Lonac: So that's really the board's responsibility is keep it financially healthy. Yep. And keep a great functioning CEO. I have to assume that you run into a lot of situations where what you've just described is anything but what's in place in a nonprofit organization. Yes. And there's a lot of sort of mingling and melding between the two roles.
Bob Lonac: And there's a lot of board members who are actively involved in the day-to-day operation mm-hmm. Of the organization and. For the executive director that finds themself himself in that place, whether it is by ignorance and it, you know, just sort of happened. Mm-hmm. Mm-hmm. Or they took over an organization that was kind of set up that way or has those issues going on, how do you start to unwind that?
Bob Lonac: Yeah. This is not easy doing, um, but I think this essentially comes down to the spirit and maturity mm-hmm. Of the people you choose. All discussions. And decisions regarding the ministry shall be discussed in session with a spirit of openness and transparency. Don't get decisions done in the men's restroom or the women's MMS restroom or anything.
Bob Lonac: If you've got a problem, say it. Mm-hmm. Because you want, that's what you want. You want a quality truthful interchange. Mm-hmm. Here's another one. The board speaks with one voice here. This is a classic one I've done. I ran into this, uh, just a little while ago. Mm-hmm. The CEO, the founder who had a administrative assistant and was hiring somebody else, the founder said, oh, the board told me I should do this.
Bob Lonac: Well, who, who, when did that happen? Mm-hmm. Well, you know, this person called me and said, that's what I should do. And they're on the board. No. The board speaks with one voice through a resolution. So you actually want differences on the board. You want 'em to argue about stuff among themselves and then have a resolution that's so they get clarity to the CEO.
Bob Lonac: So it sounds to me like when these two relationships are, are, are sort of working in symbiosis with each other, if that's a good way to put it. There's a funnel by which information travels back and forth. Sometimes nonprofits start with people on their board who are family members. Of course, which is, this is not really a family relationship we're creating.
Bob Lonac: No. Between the CEO and the board as a nonprofit starts to grow, like talk about how the board might need to evolve or change over time. I think they just have to get better. Like this list right here? Mm-hmm. They kind of refine the list. For instance, most boards I've seen don't have term limits, so not good.
Bob Lonac: Um, for a lot of different reasons, it's not v very easy for any board people to say this person is not doing a good job. Mm. So the easy way around that is you, you have to say they're elected for three or four years. That's usually a good point. And at the end of that time, we can ask them to reelect for another three or four times, and after that you have to go off the board.
Bob Lonac: Hmm. And you can come back on the board after a year, here's the one thing that you gotta have, you gotta like change or you gotta at least say, I can accept change. Hmm. Okay. It's sort of a sophistication, like how do you evaluate the, the CEO? You should see my evaluation at Krista. Uh, uh, the board guy who was very, um, knowledgeable, had a written evaluation.
Bob Lonac: Mm-hmm. And the first thing he did sit me down and go. Okay, you're not gonna like some of this, you know, it's like, Hey, you know what, you, you gotta get better at this. And you know what? You gotta get better at that. You're great at this, you're great at that one to five. And he always had a spirit and a feeling that like he really wanted me to succeed, succeed.
Bob Lonac: And I took it that way, and then I'd come back. One of 'em, I'll give you an example. This is the, this is what's really hard with boards and staff. The second year as a Krista, the first year my evaluation said, Bob, you're, you don't really, haven't gotten out in the committee, out in the community very much, which is a distinctive of the CEO.
Bob Lonac: You need to also, you know, sell the organization outside. Right. You know, you don't, you haven't gotten to know very many people and you know, that's, that's something you gotta really change. Well, I thought I had, but I didn't have a record of it or anything. Right? So I told Kate, okay, every time I go visit somebody outside the organization, just ask me who would they do, what'd we talk about the next year?
Bob Lonac: I presented as my ovation. What I did, I got an a plus. The point is they didn't know and I didn't know they wanted me to do more of it. It worked to my advantage. You know, it's kind of amazing. But listen to criticism and those evaluations should come to the CEO from the board at least once a year. You actually have a tool.
Bob Lonac: Oh, I say only once a year. Okay. Only once a year. Gotcha. If you could sort of just think back to that guy we were talking about or that girl at the beginning of our conversation, and you could offer just from your years of knowledge and experience, you could offer just one or two. High level pieces of advice about developing a great long-term relationship with the board, putting the right people on the board.
Bob Lonac: Here's what your step one in step two really need to be in order to set yourself up for success in five years, 10 years, 15 years. Yeah. Yeah. What would that look like? Don't ever attempt to do it by yourself. It's the reason the Bible talks about spiritual gifts. Everybody has different gifts, talents, but two is if you're gonna succeed at this, you better be ready to give your soul time, energy to it.
Bob Lonac: That's true in business or anything else. So if it really is resonating with you for whatever purpose, it's gonna cost you something. Mm. Mm-hmm. One of the things that profoundly moved me early on in my career was the Harvard Business Review, which you wouldn't think of, you know, a ministry guy reads too much, but they did a research on what, what takes great leadership from a business standpoint.
Bob Lonac: Mm-hmm. What's the one quality of a, of a business leader? And they decided to measure it by the growth of the business and uh, astoundingly. The, the five they rated at the top that they found mm-hmm. Nobody had ever heard of before. Two, they never heard of the CEO before, really? Because the key to success.
Bob Lonac: In business or nonprofit, is to find people that are better than you are and ask them to call you, call follow you, and that's called humility. So it isn't, that's the thing. And see, it's not about you.
Matt Stockman: What a great conversation with Bob Lonac, nonprofit consultant and advisor with some really practical and common sense advice about the role the board plays in a startup or a small nonprofit. I think there's plenty of practical nuggets in this for you if you're a leader of a small nonprofit, as you develop and you grow a relationship with your board, I am.
Super grateful for Bob's Insight. Hope that you are too. Now, if you want to know more about the work that Bob is doing right now, or you want to check out his book, which is called Live Large Seven Lasting Lessons for Navigating Life's Twists and Turns, you can check out his website. It's boblonac.com.
Bob, B-O-B-L-O-N-A-C. Dot com. That's all for today's episode in the Nonprofit Launch Plan podcast. Thank you so much for listening. Thank you so much for investing the time and the energy and the effort to chasing after that thing that you have been called to. Now remember, if you've got a special question.
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