Lost Potential: Why Performance Evaluations Matter in Nonprofit Leadership

“You see, she was gonna be an actress,

And I was gonna learn to fly.

She took off to find the footlights,

And I took off to find the sky.”

— Harry Chapin, from the song Taxi

The late songwriter Harry Chapin’s 1972 anthem to loneliness and missed opportunity still resonates today. In the song, the narrator, Harry, dreams of becoming a pilot, while his former love, Sue, dreams of becoming an actress. Years later they meet again, only to discover that neither of them achieved the future they once imagined.

Both are left reflecting on lives that drifted far from their original ambitions.

So what does this story of lost opportunity have to do with nonprofit leadership?

Quite a lot.

In many nonprofit and association settings, performance evaluation systems unintentionally create the conditions for unrealized potential. Boards often rely on outdated evaluation forms, lengthy checklists, or subjective feedback processes that do little to support the development of their executive leaders.

At best, the process becomes a bureaucratic exercise. At worst, it becomes an anecdotal review driven by individual opinions rather than organizational goals.

In one instance, I reviewed an evaluation instrument used by a large association to assess its executive director. The document consisted of more than sixty rating categories completed by every board member, with scores neatly tabulated into a final result.

What was missing from the process was telling.

The executive director herself had no meaningful role in shaping the evaluation criteria.

This is a classic example of a top-down evaluation system: input is collected from everyone except the person whose leadership is being assessed.

In other organizations, the problem takes a different form. Some executives remain in their positions for years without ever receiving a structured evaluation. Without defined expectations or feedback tied to mission-driven goals, leaders struggle to grow and boards lack meaningful evidence of organizational progress.

Lewis Carroll illustrated the danger of this approach perfectly in Alice in Wonderland:

Alice: “Would you tell me, please, which way I ought to go from here?”

The Cheshire Cat: “That depends a good deal on where you want to get to.”

Alice: “I don't much care where.”

The Cheshire Cat: “Then it doesn't much matter which way you go.”

Alice: “...so long as I get somewhere.”

The Cheshire Cat: “Oh, you're sure to do that, if only you walk long enough.”

Most nonprofit organizations would hope their leadership goals extend beyond simply “getting somewhere.” Yet without a thoughtful evaluation system, that is often exactly what happens.

A Better Approach to Executive Evaluation

Effective leadership evaluation should not reduce performance to numerical scores or generic checklists. Instead, it should measure progress against clear objectives that have been established collaboratively and documented in advance.

Most importantly, the executive must be an active participant in the process.

When leaders are invited to help define their goals and expected outcomes, they often set standards that exceed what others might impose on them. This collaborative approach transforms evaluation from a compliance exercise into a meaningful leadership partnership.

In my book The Nonprofit Secret: The Six Principles of Successful Board/CEO Partnerships, I introduce the

Executive Support and Appraisal Team (ESAT) model.

Under this framework, a small team composed of board members and the executive works together to establish goals aligned with the organization’s mission. Progress is reviewed periodically throughout the year, ensuring that evaluation remains constructive and forward-looking rather than retrospective and punitive.

The results can be significant.

One executive director I worked with reported the following membership growth results after implementing the ESAT system:

• Before ESAT: recruitment of seven new “gold-tier” affiliate members

• After ESAT: recruitment of fifty-six new affiliates

• Result: an 800 percent increase

While financial performance alone is compelling, the true value of a thoughtful evaluation system goes far beyond numbers.

A strong evaluation process demonstrates respect for the executive’s leadership while strengthening the most important governance relationship within any nonprofit organization: the partnership between the board and its chief executive.

Unlocking Leadership Potential

We may never know why Harry and Sue from Chapin’s song failed to reach the futures they once envisioned. Perhaps they made a single decision that altered their path. Perhaps they lacked mentors who could help them see their potential more clearly.

Or perhaps they simply lacked a system that encouraged them to pursue their goals with clarity and accountability.

In nonprofit leadership, the stakes are higher than individual careers. When leaders are supported, evaluated thoughtfully, and guided toward meaningful goals, organizations are better equipped to fulfill their missions.

Without that support, potential can quietly fade.

And the cost is felt not only by the leader, but by the communities they serve.