Hiring a New CEO Resource Guide

Non-profit executive searches generally take a minimum of four months, and can take as long as six to eight months. A clear sense of mission and a well understood position description for the new President and CEO will be absolutely essential for success in identifying and, more importantly, attracting the right kind of person. This kit includes a look at finding an Executive Search Firm, sample timelines, job descriptions, and compensation.

Using an Executive Search Consultant 

The primary role of an Executive Search Consultant is to "consult". That means working closely with the Chair and members of the Search Committee to understand what is needed and to help describe the position and the search process so that the search can have every expectation of a timely and successful conclusion.

Things to look for when considering a Search Consulting Firm:
  • Experience in recruiting leaders of major not-for-profit organizations and working effectively with Search Committees (as opposed to working for an HR Director or CEO)
  • Ability to move a search forward by building consensus and gaining closure
  • Teamwork: other office professional resources and consultants that are available to support the candidate sourcing and search process
  • Consultant's incentives are based on quality of work (as evaluated by clients) and intra-agency teamwork
  • Openly demonstrates a commitment to diversity
  • Evidence of “staying the course” when the Search does not go smoothly
Typical Fee Arrangements

Fees may range from a “flat” or “fixed fee” to 1/3 of the total compensation required to attract a candidate to the position. Total compensation is usually defined as base salary and any paid, accrued, or deferred extra compensation or bonus earned in the first 12 months of employment. There may also be a minimum fee.

An initial mutually agreed upon fee is usually invoiced in three monthly retainers (at the start, and at 30 and 60 days). Any additional payment is based upon the successful candidate's actual compensation due on completion of the assignment.

Some consulting firms also charge a fixed amount for the cost of assignment communication activity, including telephone, facsimile, messenger/courier, duplicating, information technology, online research, etc. A norm would be in the $2,000 range per search. Also, all normal out-of-pocket, recruiting related expenses such as travel/meals for recruiter/prospect related meetings, etc. are invoiced without mark-up.

Typically, a client may cancel an assignment at any time.

Search Process & Timetable Examples

Example 1

Weeks 1-5

Conduct client needs analysis:

  • Meet with the decision makers (Search Committee, Board Chair, etc.)
  • Meet with selected constituencies to help define skills, personality, etc.
  • Assist in developing job specifications and position description
  • Provide competitive market intelligence
  • Formulate search strategy

Prospect universe developed:

  • Draw on previous projects, research, and industry knowledge
  • Access public information to target appropriate institutions and people (e.g., ads, newsletters, etc.)
  • Contact sources and prospects
  • May include electronic and media sourcing techniques

Client calibration meetings:

  • Provide market feedback on client, position, and opportunity
  • Review prospective candidates with Search Committee. Test effectiveness of process to date. Develop a “roadmap” for balance of the search

Introduce candidates:

  • Produce detailed, comprehensive candidate reports on fully qualified candidates
  • Brief candidates on opportunity and client organization/community

Weeks 5-7

Facilitate client interviews of candidates:

  • Arrange client/candidate meetings (including scheduling, transportation, and accommodations)
  • Provide client reactions back to candidates (and possibly amend Search criteria where needed)
  • Debrief candidates and provide client with relevant feedback
  • Schedule follow-up meetings with lead candidates and then with finalist candidate

Weeks 8-10

Conduct reference checks on lead candidate(s):

  • Contact appropriate references and present client with verbal and written confirmation of discussions (site visit with former employer may be in order)

Structure and negotiate offer:

  • Discuss with client current compensation of lead candidate and client compensation parameters
  • Make offer
  • Successful candidate accepts offer

Candidate hired:

  • Consult with candidate and board on proper “launch” of new CEO
  • Follow up periodically with successful candidate and client to ensure smooth transition
Example 2

Month 1

  • Announce retirement of previous CEO
  • Select Search Committee
  • Conduct orientation for Search Committee

Month 2

  • Develop Search Firm prospect list
  • RFP sent out/due back in two weeks to screen/invite three firms to meet with Search Committee
  • Choose firm and finalize contract
  • Search Firm takes time for introspection and targeted outreach to learn, listen, and interview key influential individuals
  • Compile information learned from listening sessions to create search criteria and position description (“leadership profile”)

Month 3:

  • Complete Leadership Profile; including insights into the Foundation, a vision of where it is going, explanation of the opportunity for candidates (i.e. what the Board is looking for), the responsibilities of the new CEO, the working relationship, and the competencies and qualities of the successful candidate

Month 4:

  • Search firm begins to market the opportunity and develops 10 or more candidates so Search Committee can get the feel of types of candidates and experience (typically 2-3 of these will go forward in the Search)

Month 5:

  • Search Committee interviews 5-6 candidates

Month 6:

  • Search Committee conducts second round of interviews (2-3 finalists)—decides on degree of exposure to Board and Staff.
  • Lead candidate(s) identified
  • Lead candidate(s) makes key visits, addresses Board, and meets staff

Month 7:

  • Search firm conducts reference checks and creates compensation package
  • Committee coalesces around finalist candidate
  • Final interview

Month 8:

  • Board affirms appointment

Month 9:

  • New CEO begins

Sample CEO Job Description

Position Title: Executive Director

Position Purpose:

The executive director will manage the XYZ Foundation of America. She/He will provide expertise necessary to formulate, recommend, and implement policies and procedures for the operation of a new foundation. She/He will recommend grant recipients and present rationales for such grants to the foundation's board of directors.

Position Responsibilities:

  • Formulate and recommend initial policies, procedures, and bylaws necessary to operate a foundation
  • Recommend grant recipients and rationale to the board of directors
  • Implement funding decisions
  • Communicate with internal and external audiences about the foundation's contributions programs so as to gain visibility for XYZ foundation and the programs it supports
  • Work with communications staff to develop press releases and plan events to support the foundation programs
  • Make public presentations on the foundation's programs
  • Serve as a nonvoting member on the board of directors
  • Represent the foundation to the nonprofit community
  • Prepare the foundation's administrative budget. Develop foundation financial control procedures with assistance from the accounting department
  • Ensure that the foundation is complying with local, state, and federal laws, including the filing of all tax and other forms necessary to qualify the foundation for exemptions and deductions and other privileges accorded to the foundation
  • Ensure that appropriate computer databases are put in place to provide all necessary information on a timely basis


  • Candidates should have foundation/nonprofit experience and expertise to establish the policies and procedures for establishing and operating a foundation. Three to five years foundation/non-profit experience preferred
  • Candidates should have appropriate work and educational experience to interact with senior executives. Master's degree or equivalent experience preferred
  • Candidates should possess a solid understanding of education and the roles technology plays, or can play, in benefiting society
  • Candidates should possess effective writing, editing, and public speaking skills

Nature and Scope of Foundation:

  • Initial endowment of the XYZ Foundation is $10 million
  • The XYZ Foundation will initially focus its support in two areas: (1) science and engineering education and (2) the use of technology to provide the disabled with greater opportunities to fulfill their individual potential

Determining Reasonable Executive Compensation

The Council on Foundations strongly recommends that when reviewing and approving executive compensation, all foundations—private and public—adopt and follow the three-step procedure set forth in the regulations that implement the intermediate sanction rules for public charities.

1. Background

The Internal Revenue Code provides excise tax penalties that can be imposed by the Internal Revenue Service whenever unreasonable or excessive compensation is paid to high-level employees of charitable organizations.

When examples of excessive compensation come to light, they receive considerable media attention and negatively influence the perception of foundations and other charitable organizations in the minds of elected officials, their staff members (especially on Capitol Hill), and the general public. Most frequently, the examples that are publicized involve compensation paid to the president or CEO.

2. Purpose of this Memorandum: Best Practices in Determining Reasonable Executive Compensation

Over and above any legal requirements or public scrutiny, good stewards of philanthropic resources should go the extra mile to be certain that levels of compensation are reasonable. Thus, the Board of Directors of the Council on Foundations strongly urges all foundations to take great care in reviewing and approving the total executive compensation paid to all high level employees, particularly the top executive.

Position of the Council. The Board of Directors of the Council is firmly opposed to excessive or unreasonable compensation. Even the public perception of excessive compensation can be damaging to the whole field of philanthropy.

What is reasonable compensation? Generally, reasonable compensation is defined as what similar persons in similar positions with similar duties at similar organizations are paid.

Common procedures. Most foundations rely heavily on salary and compensation surveys to guide them in finding a reasonable level of compensation.1 It is also common for foundations to compare compensation levels with specific foundations of similar size, operations, and geographic location. Some foundations contract with independent advisors to provide advice and specificity regarding reasonable compensation and benefits.

New guidance from IRS and Treasury. For many years, the IRS could impose penalty sanctions only for excessive compensation paid to executives of private foundations. However, in 1996, Congress passed the so-called “intermediate sanction” rules.2 These rules now provide similar excise tax penalties that can be applied in instances of excessive compensation involving public charities. In publishing the final regulations to implement the intermediate sanction rules, the Treasury Department set forth an important set of procedures that provide a distinct advantage and a presumption of reasonableness for any public charity that follows them. There procedures are known as the “rebuttable presumption” rules.

At the time of this memorandum, the opportunity to take advantage of these rebuttable presumption procedures was available only to public charities under the intermediate sanction rules. Public charities and their governing boards are not required to take these steps; rather it is an option with attractive benefits if done correctly. However, the IRS is currently reviewing whether or not to amend the private foundation regulations to provide a similar rebuttable presumption under the self-dealing rules.3

3. Rebuttable Presumption Rules: Three Steps4

What is a “rebuttable presumption”? The phrase “rebuttable presumption” is a legal term used in a variety of ways. Generally, it means that if certain steps are taken, then it will be presumed that the person taking those steps acted in a certain way (fairly, reasonable, without negligence, etc.). In the context of intermediate sanctions, when a foundation (or its governing board) approves a level of compensation, the law will presume that it is reasonable so long as certain steps are taken. Under most circumstances, when the IRS challenges the reasonableness of compensation, the burden is on the foundation and the person being compensated to prove the amount is reasonable.

The advantage of a rebuttable presumption in compensation cases is that the burden of proof shifts to the IRS. Having a presumption in your favor can often be a major advantage in a dispute or in litigation. Said another way, if the rebuttable presumption steps are followed, there is a presumption that the compensation is reasonable. However, the IRS may counter with sufficient evidence to disprove (or rebut) the presumption.5

What are the three required steps? Under the regulations implementing the intermediate sanction rules, three conditions must be satisfied to take advantage of the rebuttable presumption.

  1. Approval by disinterested governing board. The compensation arrangement must be approved in advance (before any payment) by the governing body of the organization composed entirely of individuals who do not have a conflict of interest with respect to the compensation arrangement (example: neither the executive whose compensation is being determined nor any of his/her family members may be present during the discussion/debate or participate in the vote).
  2. Reliance on comparable data. The governing body must obtain and rely upon appropriate data as to comparability prior to making its determination. Relevant information includes, but is not limited to, current compensation surveys compiled by independent firms, compensation levels paid by similarly situated organizations for functionally comparable positions, and written offers from similar institutions competing for the services of the person under consideration.
  3. Concurrent documentation. The governing body must adequately document the basis for its determination concurrently with making that determination (within 60 days of the decision or the date of the next meeting of the governing body, whichever is later). To qualify as concurrent documentation, written or electronic records of the governing body (such as meeting minutes) must note a) the terms of the transaction and the date it was approved; b) the members of the governing body who were present during the debate on the transaction that was approved and those who voted on it; c) the comparability data obtained and relied upon and how the data were obtained; and d) any actions taken with respect to consideration of the transaction by anyone who is otherwise a member of the governing body but who had a conflict of interest with respect to the decision on the compensation.
Legal Advice

The contents of this guidance memorandum provide a summary of applicable law. Foundations are encouraged to consult with experienced legal counsel for more detailed advice. Any questions may be directed to the Council on Foundations' Legal Department at legal@cof.org or 703-879-0652.

CEO Compensation Findings

The Council on Foundations conducts a survey annually of grantmakers' salary and benefits and produces a report entitled Grantmakers Salary and Benefits Report. Here is the salary table from 2014 for CEO compensation to aid in finding reasonable compensation.


Grantmaker Type

Salary Median

Mean Salary

Number in Position






































1The Council's annual Grantmakers Salary and Benefits Report covers base compensation levels for multiple positions including CEO, program director, senior program officer, program officer, program associate, program assistant, grants manager/administrator, executive assistant, administrative assistant, and secretary. The full report includes additional breakdowns by asset size and geogrpahy. The report is free to members.

2Section 4958.

3Announcement 2002-47, Internal Revenue Bulletin, 2002-18, (May 6, 2002).

4The rules are spelled out in Treasury Regulation Section 53.4958-6T.

5The IRS may rebut the presumption only if it develops sufficient contrary evidence to challenge the probative value of the comparability data relied upon by the governing body.



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Leadership Development
Non-profit searches for a new CEO generally take a minimum of four months, and can take as long as six to eight months. A clear sense of mission and a well understood position description for the new President and CEO will be absolutely essential for success in identifying and, more importantly attracting the right kind of person. This kit includes a look at finding an Executive Search Firm, sample timelines, job descriptions, and compensation.

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