Inside Philanthropy

A blog on philanthropy and nonprofit news and issues. A publication of Philanthropy Journal.

March 10, 2008

Nonprofits need to bridge leadership gap


Nonprofits face a leadership crisis, and need to move quickly to address it.

A study two years ago found three in four nonprofit executive directors were likely to leave their jobs in three to five years, while another study at the time said the nonprofit sector needed to attract 640,000 new leaders over the next 10 years.

And now a new study says a new generation wants to lead nonprofits but could be turned off by low pay, lack of mentorship and the prospect that fundraising would consume too much of their time.

The charitable marketplace needs to do better.

People are nonprofits’ most valuable asset, and nonprofits and their supporters must do a better job investing in the development of their human capital, particularly the people who will lead and manage their organizations.

So nonprofit boards need to pay much more attention to creating the working conditions and culture that will attract the leaders and managers their organizations need to survive and thrive.

First, though, nonprofit boards must retool themselves.

Often weak, disengaged and clueless, boards pose what is arguably the biggest challenge nonprofits face.

So nonprofits must recruit new board members who will take an active role in making sure the board sets the strategic direction for the organization, and provides the oversight and leadership it needs to be effective in delivering services, raising money, communicating its message, advocating for change and making sure it has the staff leadership and management it needs.

Funders also can play a critical role in helping nonprofits address the leadership challenges they face.

Moving beyond their traditional preference for funding programs, funders must be willing to invest in helping nonprofits strengthen their operations.

Nonprofits need competitive pay and benefits, inspired and committed staff, competitive back-office systems, ongoing staff and leadership development, and smart strategies to secure revenue for the long-term.

Nonprofits face a seismic shift in leadership: An older generation, underpaid and burned out, is preparing to depart, and a younger generation, smart and inspired, waits in the wings.

But unless nonprofits and their boards and funders clean up their act and address the internal challenges they face, the leadership crisis only will deepen.

2 Comments:

  • At 2:06 PM, Anonymous Bill Huddleston said…

    There are several things that the nonprofit sector has done exceedingly well, and now regrets. One is pushing the idea that all administrative expenses are "overhead" and that "all overhead is bad." This has had the effect of making it harder to raise unrestricted dollars, and because of that, the nonprofits don't always have the flexibility to pay their staff what they deserve to be earning.

    The nonprofit sector has also done a lousy job of informing the public of the fact that some percentage of the nonprofit workforce is indeed paid. I'm no longer surprised when I hear people make the comment, "But I thought everyone was a volunteer - no paid employees" and that's a perception the entire sector needs to work on clearing up.

    Thirdly, in case of the specific issue about leadership pipeline, I think that there will be a two part solution. One is better training, recognition, etc. for the younger employees who are currently in the nonprofit sector.

    The other factor that is not being talked about, but will be huge, are the number of government or private sector baby boomer retirees who will enter the nonprofit sector as a second career, having spent their first career in either public service or the private sector. The Casey report mentions the possibility of nonprofit retirees returning to work, but doesn't really address the potential number of people coming from a different sector.

    Two factors that will help drive this, are one, especially for government retirees, it usually is not allowed to come back to the government without a financial penalty.

    Secondly, demographics alone mean that baby boomers will continue to be an important part of the workforce. In 2010, there will be 81 million baby boomers, and 61 million Gen X, meaning that there will be 19 million more baby boomers than Gen X workers.

     
  • At 12:26 PM, Anonymous Frank K. Simon, Jr. said…

    Bill Huddleston’s comments are on target. Nonprofits often struggle to pay their staff competitively. Many nonprofit employees place their dedication to the organization well ahead of personal financial needs. The harsh reality is that some of these dedicated employees leave when faced with economic hardship. Others are recruited away with offers too good to refuse.

    He is also correct in noting that nonprofits have done a lousy job of informing the public. The community benefits from programs delivered by nonprofits. But what portion of the community understands the operational support necessary to deliver those programs? If the organization is not communicating their mission and vision successfully, neither the public nor the board will offer the necessary support.

    His third point is also well taken. Retention of promising new staff members can be enhanced by developing their skills, recognizing their contributions to the organization and offering mentorship.

    Tapping into the retiring baby boomers is also a great idea. While some boomers will seek new work for financial reasons, others will welcome new challenges and the chance to make a difference with the skills they acquired over the years.

     

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