Littleford & Associates :: Global Issues

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Executive Searches

Littleford & Associates conducts searches for heads and interim heads of independent schools and non profit organizations. The Firm's niche in this market is a customized approach to this politically sensitive process including: in depth knowledge of institutional cultures; insights into the unique challenges and opportunities which leadership transitions represent; the largest and most accurate database in the world on nonprofit CEO and head of school compensation packages which allows for benchmarking within safe harbors limits (for US based schools); and the network of Littleford & Associates' Newsletter that 5000 schools and not-for profits receive four to five times annually.

Littleford & Associates does not reach into a "stable" of resumes to fill positions. Through our consulting work on a variety of topics, our Firm maintains contact with heads and executives of hundreds of schools and nonprofits in a worldwide network. Our consulting practice also allows us to establish relationships with senior managers below the level of the Head and CEO. We learn about emerging leaders' skills, personal and professional aspirations and potential fit with organizations seeking a change in leadership.

We are not a placement firm. All searches are personalized to help the school or organization define clearly its needs and identify the best individual who fits with its culture and will help to achieve its goals. Mr. Littleford is the sole Partner assigned to each search. Our Firm intentionally takes on only three to five searches per year in order to give each client the attention and ongoing contact that it deserves and needs.

Our Firm advises the search committee on candidate screening, interview and selection process so as to make the entire search effective, sensitive and constructive. Our counsel includes the following key elements:

Exploring the marketplace for CEO’s, both experienced and new and establishing the regional and national "net"
Forming the search committee and possibly advisory committee(s)
Developing an appropriate and enticing profile the CEO position by using an inclusive focus group approach with client constituent groups
Controlling search costs and using advertising dollars wisely
Communicating the search to the larger community
Emphasizing the importance of healthy board governance in supporting the critical search process
Ensuring that a new Executive Director (and his family) make an effective, healthy and safe transition
Recognizing when an interim appointment and process may be important or even vital to the health of the organization
Understanding the risks as well as the opportunity of including an internal candidate in the pool
Exercising the important fiduciary responsibility of checking references while respecting confidentiality particularly for "sitting" CEO’s
Benchmarking the compensation package to ensure that it is fair, competitive, meets the unique needs of the candidate and his or her family
Manages the overall process strategically by keeping preferred candidates in play and guiding the search committee towards landing the candidate of its choice.

Board Governance: Keeping Boards Healthy

Littleford & Associates has over 800 clients world wide on the subject of board governance, board/head relations, board evaluation, head evaluation, and the structure of boards.

To insure the long-term health and stability of the board, and hence, the institution, boards need to understand and implement principles of good practice on terms of office for trustees and the chair; the role of the executive, committee on trustees, and other subcommittees; the cultivation, recruitment and training of new members; and the use of appropriate channels and boundaries for the board and other constituencies.

Institutional memory and the vital role played by the committee on trustees are two important areas that most boards ignore.

Board members who are educated and effectively trained in healthy governance practices support and guide the independent/ international school or the nonprofit organization in the advancement of its strategic initiatives. It is crucial that new trustees receive this training, but experienced trustees also benefit from board governance review, as the board dynamics and the challenges and opportunities facing the institution change.

Mr. Littleford conducts on-site visits/workshops that acknowledge the unique characteristics of each board of trustees serving an institution that has its own history, culture and issues. The workshops are not “canned” but tailored to the special situation and needs of each client. Ideally each workshop is preceded by the gathering of confidential input from board governance questionnaires completed by each participant as well as by individual or focus group interviews with each trustee. The workshop is lively and interactive using the Harvard case study approach.

Strategic Planning

In recent years, strategic planning has become a more "democratic" process leading to large committees with many staff members, clients served and/or other constituents involved in discussions and decision making. Not all clients should adopt this more "democratic" and "broad brush" approach, however. In some instances, it can lead to a diffusion of mission and direction, and create a loss of momentum for the school. It may be especially risky for a newly appointed CEO or an organization with a recent volatile political situation or an unsettled staff or “customer” base.

Some organizations choose a more directed planning process that includes substantial input from a number of focus groups of relevant stakeholders. This approach keeps final decision making more closely within the management and the board.

It is also possible to blend the two approaches: by including the focus group meetings of the second process with selected involvement of some key constituent decision makers involved in the first "broad brush" process.

In all cases, the culture of the organization, and the tenor and climate of the staff and constituents should temper and guide the board's decision about which process to use.

Littleford & Associates has successfully guided over 100 clients through these strategic planning approaches by emphasizing that the real strategic issues go beyond the classic (but still important) goals of funding new buildings, improving technology and increasing endowment. The nine key elements of strategic planning include:

Establishing mission clarity through a few key words that resonate with all crucial constituencies. They form the core statement defining the organization’s unique character and the starting point for all planning.
Ensuring a strong foundation of healthy governance through the careful work of the committee on trustees that guarantees institutional memory on the board and the longevity of service of effective leaders.
Developing a strategic long range financial plan that will guide how money is raised and spent to enhance and preserve the mission.
Acquiring appropriate understandings of potential future political, economic and legal challenges and designing contingency plans to meet them.
Providing for healthy staff cultures which includes designing a salary philosophy, salary system and evaluation plan that meets the strategic needs and mission and guarantees the ability to attract, retain and reward those who most reflect that mission.
Developing a communications and marketing plan that attracts and retains the market served and builds trust and support.
Ensuring that management is discussing innovative programs and centers of excellence that reflect mission and history yet convey relevance to the future..
Planning for risk management ranging from ensuring physical security; dealing with contagious disease; handling a scandal; reviewing policies regarding sexual harassment; and addressing attitudes towards alternative lifestyles.
Avoiding financial and other conflicts of interest, especially on the Board but even within the staff.

Littleford & Associates helps to lay the important groundwork for strategic planning by addressing these strategic issues. Ignoring them may undermine fundraising for important long range needs.

Head Compensation, Contracts, Deferred Compensation Planning

Littleford & Associates has been retained by over 2000 schools and other non-profit organizations to assist with the analysis of the compensation and benefit packages for heads and executives; to help develop contracts and evaluation processes; and to help boards assess replacement costs for current executives of non-profits. Our Firm has been providing this assistance for 20 years, long before head/CEO compensation in the corporate and not-for profit domains came under such close public scrutiny.

Compensation, contracts, and deferred compensation planning for executives of non-profit organizations and for heads of independent and international schools greatly impacts the lives of those executives and the organizations they lead. Our Firm offers assistance in each of these domains.

Littleford & Associates is retained ONLY BY BOARDS in the person of the chair or compensation chair on the topic of executive compensation. We do not work for the head or chief executive officer on this topic unless the compensation packages being reviewed are for other levels of senior staff, below that of the CEO. Our Firm strongly believes that it is a conflict of interest to work for heads on head compensation matters, and at other times, to work for boards on the same topic.

We can be retained only by the board, We further advise clients fully on developing the criteria for establishing no conflict of interest understandings between the decision-making body and the "disqualified person" (head/CEO) in the determination of compensation for that person.

Littleford & Associates has created and maintains the most accurate database in the world on the subject of the total compensation for the heads of independent and international schools and the CEO’s of a wide range of other non-profit organizations. Published statistics on this subject are notoriously inaccurate as those who complete the surveys often under report actual total compensation, omit certain information or interpret the questions differently.

Through our personal contacts with nonprofit CEOs, US, international and Canadian chairs and heads of schools, we have observed this pattern: while those conducting surveys may claim a high return rate, those who have very competitive compensation packages often do not return questionnaires. Those who may feel that they are not well compensated in terms of cash or benefits are eager to know what similar heads and executives are paid and may also hope that this data might be useful in future contract discussions. These are the individuals who are most likely to respond. Our Firm examines such published surveys carefully, and they are still not as accurate as the 990 forms on the Internet site, Guidestar.

At this time, Guidestar data is at least two years out of date and in most cases excludes school owned housing and certain other benefits. Furthermore, there is a wide range of 990 reporting practices. Some entities completely disclose deferred compensation and other benefits on the 990 while others do not report all components of the head’s or CEO’s package. Presently, data on the package may be found in multiple places on the Form.

Because of these discrepancies and omissions, the IRS redesigned and tightened up the 990 Form considerably. Some changes to the Form were indeed necessary and represent important improvements, but these will involve much more due diligence on the part of filers and increased oversight by boards beginning with 2008 returns filed in 2009. (See “The Big Dig: Digging Your Way Through the New Form 990” below.) Currently, most heads, CEO’s and board chairs are not even aware of how their compensation information is reported on the 990 until it is challenged.

Our compensation data is highly comprehensive and accurate because we supplement information available in the public domain with additional information gathered through ongoing assignments on this topic and annual confidential phone calls to, and confidential one-on-one meetings with heads of schools and CEOs. Our data meets and exceeds the requirements set forth by the IRS for obtaining and relying upon "comparability data", as part of a tax-exempt organization's process of creating a "rebuttable presumption of reasonableness" in accordance with the Intermediate Sanctions Act.

Our data includes all elements of pay which the IRS considers “compensation” such as but not limited to: cash salary and bonuses; standard retirement plans; deferred compensation plans with and without substantial risk of forfeiture; standard benefits; tuition remission in excess of that granted to other employees; tuition assistance at alternative schools; assistance in providing for college education; housing or housing allowance; auto allowance; club memberships; and loan forgiveness.

One of the forms of compensation which has become particularly “tricky” is a 457 (f) plan or deferred compensation with substantial risk of forfeiture. With the advent of new legislation called 409A in 1994, these Plans became somewhat less attractive but still very viable under certain circumstances. While we are not attorneys, our Firm counsels clients on the general risks and opportunities that these Plans represent to the head/CEO. (See Section III under “Head Compensation: Understanding the Changing Rules” below.)

Littleford & Associates never makes its database available to our clients on the topic of executive compensation except in a “blind” format in which numbers are unrelated to specific organizations. We do not allow ANY access to our proprietary database.

Littleford & Associates provides expert counsel in the design of a compensation and benefits package for a head/CEO at any point in his term of service to the institution. This includes assistance in designing retirement packages for long serving heads and executives. We keep our data current for concluding such packages.

We can also supplement the work of another search firm by helping to create a complete package for a newly appointed head/CEO to address his or her needs and goals at the start of the relationship with the school or organization. This may result in longer-term satisfaction for both parties.

Littleford & Associates does not provide legal or accounting services and never counsels a client on how to fill out and file 990 or similar forms.

As Senior Partner, Mr. Littleford facilitates each contract review. Closure is achieved within a short period of time with both parties feeling gratified. Our track record for successful contract review is unparalleled. Over 2000 clients have felt that the process as well as the product helped to reaffirm the relationship between the CEO and the organization.

For additional information about this topic, please see these articles:

Why Retain Professional Assistance Regarding Head Compensation?

Section 4958 - "Intermediate Sanctions"

THE BIG DIG: Digging Your Way Through the New Form 999

Head Compensation: Understanding The Changing Rules

Safe Harbors Compliance

In 1996, responding to the United Way executive compensation scandal, the U.S. Congress passed the "Taxpayers' Rights Act." All U.S. based non-profits and internationals chartered in the U.S. are subject to this Act, which is referred to as the "Safe Harbors Act" or the "Intermediate Sanctions Act."

The Act requires that every year 501 (c) 3 institutions review the CEO's compensation and establish "safe harbors" for that remuneration. "Safe harbors" refers to ensuring that the compensation for the CEO of any non-profit falls within a normal range of compensation for similar positions in like institutions or for the market replacement cost for that position.

Littleford & Associates’ database serves to establish and confirm the required safe harbors. National, international and regional associations cannot provide this completely because that data is gathered in survey form subject to varying interpretations and omissions by the respondents. Littleford & Associates' data is gathered from individual confidential interviews and pursues all aspects of the CEO’s package including elements not reported to regional or national associations.

In addition, the Safe Harbors legislation made it possible for anyone in the US to obtain a 990 Form on a head or CEO's compensation. The availability of this information in the public domain heightens the need for due diligence in setting a nonprofit executive’s salary or in the DESIGN of his or her total package. (The web site Guidestar is the most frequently accessed source of 990 Forms on 501(c) 3 organizations.) The present 990 Form contains the CEO's salary and benefit package but not all forms of compensation.

Because of the discrepancies and omissions inherent in the current 990, the IRS redesigned and tightened up the 990 Form considerably. Some changes to the Form were indeed necessary and represent important improvements, but these will involve much more due diligence on the part of filers and increased oversight by boards beginning with 2008 returns filed in 2009. (See “The Big Dig: Digging Your Way Through the New Form 990” below.)

In sum, the Intermediate Sanctions Act requires the following: an annual compensation comparison; a written record of decisions made; no conflict of interest between those making the compensation decision and the organization; documentation demonstrating that the compensation package falls within the "safe harbors" for that particular kind of non-profit. Littleford & Associates provides that safe harbors information including the Rebuttable Presumption of Reasonableness Checklist that the IRS requires by detailing where the proposed compensation package falls compared to similar organizations.

We would be happy to work with your organization to help you understand the "safe harbors" issues and prepare the written support you need to avoid any difficulties or challenges. Our clients on this topic range in size from very small ones just getting up to speed on the requirements of this legislation to complex sophisticated nonprofits.

We will also assist the organization in responding appropriately and quickly to a "constituent attack" by uninformed individuals who may use head/CEO compensation data available in the public domain to voice grievances.

Littleford & Associates, however, does not provide legal or accounting advice. We do not advise clients on how to complete or file the 990 forms. We recommend that our clients retain their own counsel on technical legal and accounting practices.

For additional information about this topic, please see Section 4958 - "Intermediate Sanctions"

Staff Compensation Systems, Levels and Benefits

Littleford & Associates assists with the analysis of staff compensation systems, workload assessments, salary levels, and benefits design. In today’s challenging economic environment, boards are worried about managing endowment and about meeting annual giving and/or capital campaign targets. Equally important in the realm of financial management is for boards to ask how wisely the organization is spending its money allocated for its most important resource- the staff.

Littleford & Associates has helped to implement successfully flexible salary systems that incorporate the concepts of a career ladder, "range", "band", performance based pay and other creative compensation designs that are based on criteria in addition to longevity of service, advanced degrees and extra pay for extra work.

"Range", "band" or "broad banding" and "career ladder" are similar terms describing the same concept. They refer to a compensation system that provides the predictability of future earning power that staff craves, while providing organizations with the flexibility to reward those who make the greatest contributions to quality of service and the working environment. Thus, these systems can reward good performance as opposed to some traditional models

Establishing at the outset a philosophy of compensation for the salary delivery system and for the benefits structure is imperative.

Many organizations have limited knowledge of or experience with effective benefit designs that provide flexibility for staff based on their varying needs. Those needs vary by age, career stage and family status. Effective benefit systems take these differences into account, while controlling costs. "Cafeteria plans", "benefit banks", "flexible spending accounts", and "reimbursement accounts" are just a few such systems.

In benefits management, nonprofits are faced with demands for medical coverage for families, for those who have retired but are under age 65, and for long-term care. They may be challenged also by single employees who are concerned about "discriminatory" benefits that support family medical coverage and other similar "family" oriented programs.

Littleford & Associates tracks the patterns of staff compensation and provides helpful, appropriate advice that fits with the culture and location of the nonprofit. Among all of the clients with which we have worked, none have arrived at the same conclusions or adopted the same salary or benefit system design. However, ALL have developed a more intelligent and thorough understanding of the effect of their current compensation practices and how they encourage or damage relationships with current and prospective staff. Most have been able to introduce more elements of flexibility and predictability into their compensation systems without going down the slippery slope of more stipends for which no job will be done without extra pay or down the path of increasingly expensive benefits without tradeoffs, both of which the fiscally responsible board fears.

Organizational Climate and Morale Issues

Many nonprofits suffer from poor staff morale that can affect overall constituent morale. Effectively managing change and staff are skills that are developed over time. Some heads and CEO’s manage by making few or no decisions. Others manage by making too many decisions independently and too quickly.

High turnover of boards leads to high turnover of chairs. High chair turnover leads to a high turnover of CEO’s. All of this turnover at the top can result in a power vacuum, often filled by the staff which may have the only institutional memory left. They may choose to exercise it in ways that most benefit themselves, but may not always be helpful to the organization as a whole.

A board anxious to retake decision-making authority for the administration may retain a new CEO who moves quickly on change initiatives. Staff morale may plummet as a result, and the board may fire the very leader who was directed to take the actions that most upset the staff. A cycle of low morale and high turnover may develop and undermine the long-term health of the institution and its ability to execute its mission.

Organizational culture is a product of past history, successes and failures, "lore" about staff’s real or perceived mistreatment at the hands of the board or administration, and of having little "voice" in decision making that affects them.

CEO’s or executive directors are not oblivious to the extent of unhappiness in organizations, but they often avoid addressing it. It is easier and less confrontational to "lay low" with an angry culture than to take the risks associated with trying to improve it. Leaders are never sure if it is even possible to make such cultures more positive, or if tackling the issue is worth the risk.

Throughout the world, Littleford & Associates works with schools and organizations to help support "moral" cultures in healing old wounds and building new coalitions for positive change. Our Firm has more than 600 clients worldwide on this and related topics. The tool is a highly effective organizational climate workshop preceded by interviews with a cross-section of the staff and the senior administration.

Change does not occur overnight, but with prescribed follow up assignments that are outlined to members of the workshop group, this group is able to penetrate old behaviors and begin to modify and improve behaviors within the culture. These behaviors may have developed over many years, yet can be modified within 18 months to three years in significant and often remarkable ways.

The ultimate beneficiaries of an improvement in staff morale are the constituents they serve.

Marketing for Enrollment, Selectivity and Competitive Position

Littleford & Associates has over 100 school and nonprofit clients world wide in the marketing realm.

Mission and marketing are intimately related. Effective marketing to the community at large begins with internal marketing: ensuring consonance of mission, goals and the words that constituents served and customers use to describe them. The mission can also be revealed in practice through the actions and words of the administration and staff. These become the benchmarks by which all will judge the integrity and success of the organization.

Littleford & Associates has conducted workshops in conjunction with strategic planning or on marketing alone which have included a motivating exercise on mission statement brainstorming, clarification and development. Board members and administrators find this to be an enjoyable activity that kick starts long-range planning and marketing efforts.

Lack of mission clarity and a poor internal marketing foundation often lead to money wasted on misdirected external marketing. Admissions and retention analysis and surveys of current and prospective constituents are critical for guiding effective marketing.

Establishing and promoting unique "centers of excellence" (flagship programs) are vital to marketing schools and other nonprofits. Just as a president's long "coat tails" ensure the election of members of his own party, "centers of excellence" are the coat tails that draw new families to schools or new patrons and donors to other organizations.

Today, external marketing techniques for schools and non profits are becoming increasingly more sophisticated. There are new effective "image" tools, while at the same time proven open houses, coffees and public outreach functions, as well as word of mouth, continue to produce excellent results. Littleford & Associates guides non profits on how to design and staff them appropriately to gain maximum impact.

Mentoring CEO’s and Leadership Transitions

Executive Directors/CEO’s, who are new to the career or have moved from one position to another, often need the outside perspective provided by a consulting firm that can help view issues in ways that are supportive of both the leader and the organization.

A new leader faces a variety of demands from the board, the staff and the clients served. He or she needs to be very careful about managing the pace of change in a way that does not harm the school's climate, morale or culture. Sudden changes can undermine the new CEO’s credibility and legitimacy.

Even experienced directors who move into a new environment may find themselves surprised by a different set of personalities, circumstances and political history that can blindside even the most experienced leader.

Littleford & Associates has experience with hundreds of non profit organizations in helping to guide executives who are new to the profession or in a new setting. Our work in this area can be accomplished either by an on-site visit (preferred) or by teleconference and ongoing e mail and phone support. Our Firm has actually saved the leadership of a number of schools and organizations and in so doing helped to ensure institutional stability and success.

Friend Raising and Fund Raising

Effective Fund Raising consists of different approaches for different groups and goals.

The nonprofit organization must have a compelling vision of what it represents and of where it is headed. It must present a focused and powerful story. People give to other people and to causes in which they believe.

Feasibility studies must be conducted to make capital giving for both building and endowment campaigns realistic. Littleford and Associates can help organizations create realistic assessments on which to base their capital campaigns.

Planned Giving should be designed to maximize impact both now and in the future. Investment plans can greatly impact total revenues the entity has at its disposal now and over the next decades.

Properly designed volunteer programs assist development offices immensely in building morale and effective giving. Techniques for recruiting, developing, and directing volunteers that need not cost a lot of money can make the difference between lackluster results and powerful outcomes.

Finally, in approaching corporate givers, organizations need to know what those corporations are looking for when they award funds. Similarly, its senior managers must be skilled at making and presenting its case to this audience.

These approaches allow the organization to build enduring relationships while garnering funds. Both are essential to its continued health.

Littleford & Associates, Global Issues | Local Solutions