Just as a general topic for discussion, here's one I have been
pondering for years.

What are some of the pros and cons of a 501c3 not for profit
railroad museum hiring an executive director as a salaried, paid
employee?

My opinion of it is that it is very risky at best.

I know of at least one example of this, where the hired person
squandered lots of museum cash on stuff such as a new car...
The issue was swept under the rug by the board of directors, hushed
up, and it's not talked about in polite company any more.

But seriously though, it kind of seems to me that there is a current
trend toward the hiring of a paid executive director by 501c3 rail museums
these days. What is going on?

Anyone have any insight? It makes very little sense to me.

Thanks,
Chuck

Twenty-five years ago, my museum hired an executive director to help us reach our goals. The twelve trustees each contributed one month of his salary to get through that first year. It was absolutely the best investment we ever made. Why? Because the XD brings in the money that makes everything else possible. Even that first year, starting from scratch, he brought in several times his own annual salary in grants and significant donations, finding money in places we would never have thought to look. Having a paid XD gives enormous credibility to our grant requests by, for example, making it very clear to potential funders that we are a legitimate organized museum and not just (as Frank Rowsome, Jr. described early trolley museums) an “oddly specialized junkyard”. If you’re content being a private club that owns a junkyard, you don’t need an executive director. But if you want more than that, you should give serious thought to hiring somebody to run the show, and, in particular, find the money. Whether he (or she) is called an “executive director”, “general manager” or something else may be immaterial.

/s/ Larry
Lawrence G. Lovejoy, P.E.

Besides Larry Lovejoy's museum there have been other Museums that are successful because of their paid Executive Directors/General Managers or whatever title. A couple which come to mind are the Colorado Railroad Museum (Golden, Colorado) and the Northwest Railway Museum (Snoqualmie, Washington).

Some Museum have been lucky to have very dedicated volunteers that have had the time available to fill that slot in the organization chart.

Other Museums of all kinds have suffered because they failed to define what the job duties, expectations and the candidates requirements were. Or the governing Board has failed to perform the necessary oversight.

Paid staff may come on-board and stay with an organization for a long time. But small museums need to be prepared to have a successful employee move on to other opportunities at larger museums after a few years.

The relationship between the board and the executive director is crucial to the success of the organization. The board must be willing to step back and allow the executive director to do his or her job and be open to their recommendations, while still providing oversight, general direction, and support in fund raising activities. This can be a difficult transition if board members are accustomed to engaging in day-to-day management.

- Alan Maples

An Executive Director manages the business operations of the museum. A Director of Development is a fund raiser primarily. A Director of Marketing is responsible for the branding and activities to promote your organization to the public at large, and in some cases within the organization as well. None of these positions are mutually exclusive - multiple tasks and crossover are common. In a strong director structure, the ED pretty much runs the place with BOD approval but little oversight, and each BOD member is responsible for giving or getting money or getting off the BOD to make room for somebody else who will. In a strong BOD structure, the BOD is very hands on and involved in minutia, and the need is probably for filling a development or other technical role not present on the BOD. If it's funding, you might not need to do more than contract with a freelance fund raising contractor.

You need to hire to make up for what's missing in your organization first. If you have good project management don't hire a project manager. If you have good fiscal management, you don't need an accountant (apart from a disinterested third party annual audit.)

There's a real danger of the BOD being populated with people who are great project people or train runners and therefore have popularity, but no damn business sense at all, or are so close to the railroad club playing with trains on weekends that they can't see outside of the old comfortable box into the outside world. Please limit these people to their area of greatest strength and populate whatever your BOD / management structure is with people who are more outwardly directed and can think broadly and in the long term. They will otherwise hold you back by caring way too much to be objective.

God luck, think carefully.

I spent a fair amount of time with one non-profit unsuccessfully lobbying for the hiring of an executive director. The problem with that organization was that they prided themselves too much being an all-volunteer organization ("by fans, for fans"--ignore their attorney on retainer) unlike the somewhat crassly commercial nature of other organizations in their field. Last I heard, whoever gets elected President of the organization, as well as VP, etc., can expect to put in almost a thousand hours of unpaid work that year, but also gets a lot of perks, such as paid trips overseas (legitimate business, mind you--and they have to be fluent in the foreign language to negotiate deals!). I left the organization in part because I viewed this as an unsustainable operational model given the size of the organization (about a ten million dollar annual budget, from what I recall).

If you are fortunate, or blessed, enough to have a wealthy retired patron with enough business acumen to effectively run your organization as a hobby, more power to you. But if you are big enough to have significant assets and operations, it's a variation of "only a fool acts as his own lawyer." You pay an executive director, or she/he pays consultants, to devote full-time to such things as marketing, grant procurement, forming relationships with local political forces and government, etc. As noted above, a good XD had better be bringing in a LOT more than their salary in extra revenue. You are, in effect, paying someone to make your operation more successful both logistically and financially, and they should be motivated to earn a higher salary or bonuses based on that greater success.

(One recent example: I know of an operation where a group of volunteers tried out dinner trains, and in the first year, netted a paltry three figures in "profit" after all was said and done over a dozen or more train trips. A new director took over, and completely revamped the operation--new caterer, different operation mode, made the staff more professional, marketing, etc.--and in spite of higher expenses netted mid-to-high five figures in "profit" after expenses.)

The railroad industry gets accused far too often of "conservative" mentality, i.e. "that's the way we've always done it" or "not invented here" apathy. This has too often, by default, extended to rail history and museum operations. Times change. What might have worked for a rail museum or excursion in the 1950s or 1970s doesn't work in 2019. You can't sell a tourist railroad with "Petticoat Junction" or "Wild Wild West" themes even if you're operating out of Old Tucson or Carson City, never mind southwest Virginia or Florida. Three of the most successful tourist railroads in the United States now run trains that are approximately half "premium fare" carriage each trip--plush seating, wine & dine, dome cars, etc.--and others have been following suit if they're intelligent. Typically, hiring an "outsider" gets you a fresh perspective.

On the other hand, there remains the legitimate risk of hiring a character like Michael Scott or Robert California in The Office: a strange, enigmatic soul that seems nonsensical or driven to self-destruction but does pull amazing tricks out of the hat--or even hiring an experienced embezzler.

There's an adage in the business world: "Dress for the job you want, not the job you have." To some extent, hiring a professional administrator is in that league.

“You can't sell a tourist railroad with "Petticoat Junction" or "Wild Wild West" themes even if you're operating out of Old Tucson or Carson City, never mind southwest Virginia or Florida. “

Well you can if you are right off the Blue Ridge Parkway in North Carolina! As always there is no definite in this world.

Just like there is not a definite yes or no for needing to hire an Executive Director for a non-profit. There is a case to be made for organizations like Hesston and Illinois Railway Museum and their all volunteer operations. Most non-profits grow into wanting to act like a for profit tourist attraction. I’m not saying that’s good or bad, I’m just saying that means you will need to hire the right people to be a part of their staff and to keep them around.

One downside is a good Executive Director from the outside can make good business decisions for the organization which go against the mission.... the mission moves towards financial and attendance goals like a for-profit would have, vs. a conservation and restoration goal.

This where having established the mission statement (and related statements for collection goals, restoration procedures, education programs, etc.) need to be in place. There is nothing wrong with promoting any museum to attract more visitors (and other income sources) if the programs offered meet the education and other goals of the museum.

Also reasons to have a system of oversight or approval other than at an annual review.

Then the board of directors weren't doing their job making them just as guilty as the person doing the squandering. I don't know about the laws in the U.S., but here in Canada the directors could also be charged with a crime if they ignore any potential wrong doing. It is their duty to investigate and go to the police if they suspect money is missing.

Oftentimes it seems these horror stories about executive directors derives from the caliber of individuals railroad museums attract. What I mean is an incredibly small minority (perhaps less than 1%) of those who seek to make museum administration a profession envision their future office in a railroad station or backshop. The best of the field aspire to six-figure, prestigious positions with museums that possess generally universal recognition (Washington's Mount Vernon, Smithsonian, Boston MFA, etc) Oftentimes what is left are those who are merely looking for a paycheck or are using lesser paying positions as a stepping stone/resume builder. And if you do find a good one, the learning curve if they are unfamiliar with the challenges of rail preservation are steep.

What would a reasonable figure be for budgeting for hiring an executive director, (for a year)? Salary is part of it but you also have costs that don't show up on the paycheck. So an answer might be "$75k offered salary which will cost you about $150k at the end of the year"

Where would you find them? Attract from another organization or would an operation making this new plunge be perhaps 'forced' to hire a collage grad.

Start here and at the Alliance. Your ideal candidate could be from any variety of backgrounds.

Brent’s post above brings home the point I was trying to make even more clearly-

A director whose goal is to use the RR as a stepping stone will want to make himself look good on future resumes- I increased the attendance by this much etc.

Increasing the attendance is of course a good thing! And that’s the problem, nothing that the “exec. Director” does is wrong, but with only his or her personal goals in mind, many things might get lost that should also be focused on.