22 May The Missing Piece in the Nonprofit Puzzle

After years of working in and around nonprofit organizations, one thing has become crystal clear to me: nonprofits need a Chief Operating Officer (COO).

While the importance of a CEO is indisputable, the role of a COO is often overlooked—especially in the nonprofit world. There’s typically a limited budget and not enough “spare” cash to justify a COO hire (particularly for small and midsize nonprofits).

But here’s the truth: In these mission-driven organizations, the COO’s role is not merely an “operational” one, but a strategic one as well. Here are some factors I’ve observed.

3 Benefits Nonprofits Realize When Hiring a COO

1) Operational Management

A COO can lead the operational aspects, allowing the CEO to focus on vision and fundraising. Nonprofits are no different from for-profit organizations in that they need effective operational management to function efficiently. 

With a COO in place, the CEO can devote more time to cultivating relationships with donors, board members, and stakeholders—all of which are crucial for the sustainability and growth of the organization.

2) Vision in Action

A COO ensures the organization’s strategic goals align with its operations. They bridge the gap between the board’s vision and the day-to-day tasks, ensuring that the organization is moving in the right direction. By doing so, the COO aids in transforming lofty goals into tangible actions, driving the organization forward in a more cohesive and coordinated manner.

3) Resilience and Stability

The COO plays a crucial role in building a resilient organization. Through their focus on systems, processes, and people, they can create a robust operational backbone, providing stability during challenging times. This aspect has become increasingly important given the recent global uncertainties.

Let’s Not Forget One More Thing…

There’s one more factor that many nonprofit organizations don’t even consider when bringing on a COO: CFO acumen. Many COOs have experience with or skills similar to those of a CFO, which is invaluable when it comes to managing a nonprofit’s financial health. After all, nonprofits are much more complex than organizations that “raise money.”

The financial aspects of a nonprofit organization are as crucial as any other part of its operations. A COO with a strong financial background can help the organization maintain fiscal responsibility, optimize resource allocation, and make data-driven decisions to ensure long-term sustainability. This is particularly important for nonprofits, as they often operate on tight budgets and must carefully steward their resources to have the most significant impact on their mission.

Additionally, a COO with financial expertise can help develop and implement financial strategies that align with the organization’s overall goals. By creating robust financial systems, they can ensure that funds are allocated effectively, expenses are controlled, and the organization’s financial position remains strong. This, in turn, can give donors, stakeholders, and board members greater confidence in the nonprofit’s ability to deliver on its mission.

Having a COO who is well-versed in financial management can facilitate better collaboration between different departments within the nonprofit. This is particularly important when it comes to budgeting and financial planning, as it ensures that all aspects of the organization’s operations are considered and integrated into the financial strategy.

Bottom Line: COOs Are Not a Luxury for Nonprofit Organizations

Nonprofits are complex entities that require leadership beyond just a visionary CEO. They need a COO to translate that vision into action, to align the organization’s strategic and operational aspects, and to build resilience for uncertain times ahead.

At the end of the day, a COO is not a “luxury” for a nonprofit, but a necessity. They provide an essential balance, complementing the CEO’s role and ensuring that the organization operates effectively and efficiently. 

I think it’s high time we recognize the COO’s role in the success of nonprofit organizations, no matter the size of the organization. I hope I’m not alone in that perspective! 

If you’re a nonprofit leader who is questioning the validity of a COO, I’d love to have a conversation with you. I really do think it’s crucial to invest in leadership that drives both vision and operational excellence for our nonprofits. It’s not just good management; it’s good stewardship.

You can contact me here via my website or email me directly at michael@consultstraza.com.