First of all, kudos to you for figuring this out and staying on top of the governance of this organization. Time and time again I've seen boards who are completely checked out, who have no idea what is really going on at a nonprofit.

Having difficult conversations with leadership must take place as soon as you possibly can manage it. Time is critical, especially now.

Second of all, I don't agree with the previous answer. This person assumes they know what's wrong with your nonprofit. Here are some questions.

Aside from not being proactive with fundraising,
Is this leader mistreating workers?
Is this leader not understanding how to interact with your development director?
Is this leader disorganized, harshly critical, and impervious to feedback?
Is this leader slandering workers and telling you they are all "stupid"?
Is this leader not good about keeping promises to board members about meetings?

If the answers to the above are all "YES" then to manage this leader, this is how I would have the conversation.

I would start with asking the leader what's going on in their life right now. I would tell them about one good thing that they're doing, if you can think of one. Then I would ask them if they thought they were having any challenges with this job right now. Then I would ask them if they saw their challenges, what they would like to do to begin to address them.

If the leader did not see any challenges, then I would say, This is what the board sees as your challenges right now. We are all fundraising as hard as we can. We are trying to set the best example for you. You have had 16 months to begin to fundraise for this organization. We are not seeing any forward movement on your part. We need you to have ten major donor meetings in the next three months. We need you to ask for large gifts. You can spend the first two months researching, cultivating, and narrowing down a pool of donors, but you need to do this now.

And then you can tell them that the fact that they have accomplished these meetings will count for 50% of their results to the board, and the actual monetary outcome of these meetings, the other 50% of results.

Tell them that you and the board and the development director will all be there to support them in these meetings, whether they need introductions, research, major gift coaching, etc. But that they need to get them done.

Then, if at the end of three months, they haven't gotten any gifts or gone on their meetings, then you have grounds to give them their one month notice.

I've got more about how to manage people at my website.

http://wildwomanfundraising.com