Mission Connected · Board Guide

Hiring a Fractional Executive Director: A Board’s Guide for Small and Mid-Size Nonprofits

By F. Jay Hall, Founder, ExecSearches.com

Published November 3, 2026 · Updated November 4, 2026

A fractional executive director is an experienced nonprofit leader who runs your organization part time, under contract, for as long as the arrangement works. It fits when the job needs senior judgment and the budget can’t carry a full-time chief executive.

I have spent 27 years listing nonprofit leadership jobs, and the question boards ask me has changed. It used to be “how do we find a great executive director?” More and more it is “can we afford one at all?” For a lot of small and mid-size nonprofits the honest answer is not full time. That is where fractional leadership comes in, and it is why boards need a plain guide to doing it well.

What the tax filings report about chief executive pay

We compiled the officer compensation lists on the Form 990 (Part VII) and Form 990-EZ (Part IV) returns in the IRS e-file data released for the 2025 and 2026 processing years, keeping the latest return for each organization with a tax year ending 2023 through 2026. Among community nonprofits (501(c)(3)s that are not hospitals or schools) with revenue under $1 million, 43,586 of 308,777 report a compensated chief executive working at least 20 hours a week, about one in seven. Between $1 million and $10 million in revenue, 37,836 of 64,589 do, about three in five. A return without one doesn’t tell you why. The leader may be a volunteer, may work fewer hours, or may hold a title we don’t count.

Source: ExecSearches.com analysis of IRS Form 990 and 990-EZ e-file data. Figures are reportable compensation (Form 990 Part VII, from the organization plus related organizations; Form 990-EZ Part IV), one figure per organization, for chief executives reported at 20 or more hours a week, so this is not a full-time-only sample. Titles are grouped as CEO, executive director, president and equivalents. Dollars are nominal and pooled across tax years ending 2023 to 2026. Organizations that file the 990-N postcard (gross receipts normally $50,000 or less) report no pay and are not counted. Details are under how we compiled the pay figures.

These figures describe what filers reported. They are not current salary offers, and they don’t measure what any organization can afford. They do give a board a reference point: in the middle revenue band, half of the chief executives in these filings reported $125,000 or more. A fractional leader is one way to buy senior judgment without committing to a full-time position.

When a fractional executive director fits

• The organization needs an experienced leader for strategy, funders and the board, but day-to-day work is handled by a small staff.
• Revenue can support a senior person for two or three days a week, not five.
• A founder or long-serving director has left and the board wants a steady hand while it decides what the job should become.
• The organization is new, merging, or winding down a program, and the work will change shape within a year or two.

It is a poor fit when the job is mostly hands-on program delivery, when staff need a manager on site every day, or when a major funder requires a full-time chief executive. Ask your largest funders before you decide; some grant agreements name the position.

Fractional, interim or consultant: three different jobs

Boards mix these up, and the contract should say which one you are buying.

Here is how we use the terms. Fractional leadership gives an organization executive capacity for part of the week or month. Interim leadership fills a role for a defined transition or a temporary need. An engagement can be both fractional and interim. Consulting describes the service provided, which may be advice, hands-on implementation or delegated leadership. None of these labels decides whether the person is an employee or an independent contractor.

CompassPoint’s 2005 monograph on interim executive directors observed that interims usually worked less than full time, 24 to 30 hours a week on average, and cautioned that outside a turnaround, interim periods longer than six months can leave an organization looking stalled. Those are one organization’s practice observations from 2005, not a current market survey. The labels also overlap: an interim can work part time, and a fractional arrangement can have a fixed term. What separates them is purpose. An interim is there for the transition; a fractional leader is there for as long as the board needs part-time executive capacity. Our companion piece on interim versus fractional leadership during an executive transition covers the handoff in detail.

Scope the job before you hire

A fractional arrangement fails most often because nobody wrote down what the leader is actually allowed to decide. Put these in the agreement:

• Hours and availability. Days per week, response time for staff and the board, and which meetings they attend.
• Decision authority. Spending limits, who signs contracts and checks, and whether they can hire and dismiss staff.
• Priorities for the first 90 days, in writing, with a review date.
• Who is the board’s contact. One person, usually the chair, so the leader is not managing twelve bosses.
• Term and exit. A trial period, how either side ends it, and how files and passwords are handed back.

The job description still matters. If you need a starting point, our nonprofit CEO job description guide lists the duties boards usually assign; a fractional version keeps the ones that need senior judgment and moves the rest to staff.

The budget math

Compare total cost, not salary to hourly rate. The Bureau of Labor Statistics reports that benefits made up 30.0 percent of private employers’ compensation costs in June 2026. Take a hypothetical full-time salary of $125,000. If benefits match that average, total compensation cost is about $179,000 a year ($125,000 divided by 0.70).

Now divide that by the hours you would buy. At 20 hours a week for 48 weeks, the fractional rate that costs the same as the full-time hire is about $186 an hour. At 12 hours a week it is about $310. For a hypothetical $61,000 salary, the same math gives about $91 an hour at 20 hours a week and about $151 at 12. Quotes below those lines save money; quotes above them mean you are paying for flexibility and experience, which may still be worth it.

Treat this as an illustration. The BLS figure covers all of private industry, not nonprofit executives. A full comparison also counts the staff support you keep, onboarding, coordination time, travel and any difference in scope. A fractional engagement may cost less in total because it buys less time or a narrower scope. It does not give you a full-time executive’s capacity at a discount.

We don’t publish a going rate for fractional executive directors because we have not found a source we would stand behind. Get at least three quotes, and ask each candidate what is included.

The board’s job does not shrink

Hiring part-time leadership is not a way for the board to step back. A few things land squarely on the board:

• Your Form 990. The 2025 IRS instructions say the person with ultimate responsibility for carrying out the board’s decisions is treated as an officer on Part VII, whatever their title. If your fractional leader holds that role, list them. Separately, Part VII Section B lists your five highest-compensated independent contractors that received more than $100,000 for services, whether they bill as individuals or as firms, so a fractional leader paid by contract may appear there too.
• Contractor or employee. The IRS looks at the whole relationship and how much the organization controls how the work is done, grouped as behavioral control, financial control and the type of relationship. The title, the invoice and the contract wording don’t settle it, and rules for corporate officers can also apply to an executive appointment. Settle the relationship before you agree on pay and terms, and confirm payroll, benefits and reporting obligations for the arrangement you actually have. If you’re unsure, ask your accountant; either side can file Form SS-8 for an IRS ruling, which the IRS says can take at least six months.
• Compensation approval. Approve the contract the way you would a chief executive’s pay, with conflicted members out of the room.
• Succession. BoardSource found in its 2017 data that only 27 percent of nonprofits had a written succession plan for the chief executive. A fractional hire is a good moment to write one.

Risks to plan for

Your leader serves other clients, so a crisis may land on a day they are booked elsewhere; agree on emergency coverage up front. Staff can be unsure who to go to when the leader is off; name a deputy for operations. Knowledge can walk out the door at the end of the contract, so require shared files and written handoffs from the start. And if the arrangement works well, plan the next step, because a growing organization may outgrow part-time leadership within a couple of years.

How to find a fractional executive director

Post the role publicly, with the hours, authority and term spelled out, so experienced leaders can see it. You can list it on ExecSearches.com or the fractional and interim roles on the Nonprofit RFP & Fractional Work Hub. Ask your community foundation and peer executive directors who has done this work locally. Then interview the way you would for a full-time chief executive: references from boards they served, examples of decisions they made, and a conversation about how they divide their week.

If you also need a permanent leader later, a search firm may help; our explainer on how an executive search works walks through it. For finance specifically, see our guide to fractional CFOs for nonprofits.

How we compiled the pay figures

Compiled November 1 to 3, 2026, by ExecSearches.com from public IRS data. We used the IRS Form 990 series e-file indexes and all zip batches posted for processing years 2025 and 2026 (through 2026 batch 09A, the last one listed on November 1, 2026), keeping Form 990 and 990-EZ returns only. For each organization (EIN) we kept the return with the latest tax period; when two shared a tax period we kept the later-processed one, usually an amendment. Returns for tax periods ending before 2023 were dropped.

• Who counts as a chief executive. Titles such as CEO, chief executive, executive director and head of school; “president” only when paid and listed at 30 or more hours a week. Assistant, deputy, former and similar titles are excluded, as is a plain “Director,” which can mean a board seat. Where two people hold the role, the higher-paid one is used.
• Who is included. Reportable compensation above zero, at least 20 average hours a week, and some pay from the filing organization itself. People paid only by a related organization were dropped so a parent organization’s executive isn’t counted on every affiliate’s return.
• Which organizations. 501(c)(3)s, using the IRS Business Master File. Hospitals (NTEE E20 to E24 or a Schedule H) and educational institutions (NTEE codes starting with B) are reported separately and left out of the community figures. Revenue bands use total revenue on the return.
• Compensation year. Part VII reports compensation for the calendar year ending with or within the organization’s tax year, so a return for a tax year ending in mid-2025 shows pay for calendar 2024.
• Ranges. The middle half is the 25th to 75th percentile, using linear interpolation. Figures are rounded to the nearest $1,000.

The underlying records, scripts and a 23-row spot check against ProPublica Nonprofit Explorer are kept on file, and every figure traces to a specific IRS return.

Frequently asked questions

What is a fractional executive director?

An experienced nonprofit leader who leads the organization for part of the week or month, on an ongoing or fixed-term basis. They report to the board and hold the executive authority the board delegates in writing. Whether they are an employee or a contractor depends on the facts of the relationship, not the title.

How is a fractional executive director different from an interim executive director?

An interim fills the top job for a transition and is meant to leave; CompassPoint Nonprofit Services observed in 2005 that interim periods usually ran four to eight months. A fractional leader provides part-time executive capacity, ongoing or for a set term. The two can overlap, since an interim can work part time.

How much does a fractional executive director cost?

We have not found a reliable source for market rates, so compare total cost. As an illustration, if benefits match the private-industry average of 30 percent of compensation costs (BLS, June 2026), a hypothetical $125,000 full-time salary costs about $179,000 a year. Buying 20 hours a week for 48 weeks, the rate that costs the same is about $186 an hour.

Does a fractional executive director appear on our Form 990?

Yes, if they have ultimate responsibility for carrying out the board’s decisions. The 2025 IRS instructions treat that person as an officer on Part VII regardless of title. Part VII also lists the five highest-compensated independent contractors that received more than $100,000 for services.

Is a fractional executive director an employee or an independent contractor?

It depends on how much control the organization has over how the work is done. The IRS looks at behavioral control, financial control and the type of relationship; the title and contract wording alone don’t settle it. Ask your accountant; Form SS-8 asks the IRS to decide, and the IRS says a ruling can take at least six months.

Sources

• IRS Form 990 Series e-file data (2025 and 2026 processing years) and Exempt Organizations Business Master File, Part VII officer pay, compiled by ExecSearches.com. irs.gov
• U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026 (released September 9, 2026). bls.gov
• IRS, 2025 Instructions for Form 990, Part VII (officers, top management official, independent contractors). irs.gov
• IRS, Annual Electronic Filing Requirement for Small Exempt Organizations (Form 990-N). irs.gov
• IRS, Independent Contractor (Self-Employed) or Employee? irs.gov
• Tim Wolfred, Interim Executive Directors: The Power in the Middle, CompassPoint Nonprofit Services with the Evelyn and Walter Haas, Jr. Fund and the Annie E. Casey Foundation, 2005. compasspoint.org
• BoardSource, Leading with Intent: Your Participation Matters (April 24, 2019), citing 2017 survey data. boardsource.org

About the author. F. Jay Hall founded ExecSearches.com in 1999 and has run it since, listing nonprofit, higher education and public-sector leadership jobs.

• Founder, ExecSearches.com (since 1999)
• 27 years running career websites for nonprofit leadership hiring