Inside Philanthropy

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

September 17, 2007

Nonprofits need leadership

Facing an uncertain economy, financial stress and increasingly tough scrutiny from donors, government and the public, nonprofits need more effective leadership, greater accountability and stepped-up efforts to build their organizational “capacity.”

Those are among the lessons offered by experts at the 2007 Nonprofit Leader Summit sponsored by Wachovia Nonprofit and Philanthropic Services.

“It’s tough to be in nonprofit-land right now,” Paul Light, professor of public services at the Robert F. Wagner Graduate School of Public Service at New York University, told hundreds of nonprofit leaders at the summit, held in New York City.

The economy is headed for a possible recession, nonprofits are headed for tremendous turnover in leadership as Baby Boomers retire, fundraising pressures are growing, and public confidence in nonprofits is eroding, Light said.

To address those issues, nonprofits must work to strengthen their organizations, he said, emphasizing that it is performance, not mission, that drives confidence in nonprofits.

“It’s whether you spend money wisely, whether you deliver on your program and perform,” he said. “We can control our performance.”

And that requires investing in capacity.

“Capacity-building is not a luxury,” he said, “It’s a necessity.”

H. King McGlaughon Jr., senior vice president and managing executive for Wachovia Nonprofit and Philanthropic Services, said creating “the right board for the right purpose” is critical for nonprofits.

The ideal board, he said, reflects its functions, not its structure.

The central roles for boards, he said, include creating a “shared” vision for the board, staff and volunteers; keeping he organization focused on its mission; helping to provide and allocate resources to mission; preparing the organization to respond to opportunities and threats; improve performance; guiding the organization to a smart future; and planning strategically, a role that should be the “centerpiece” of the life of the board.

“Governance and leadership of the nonprofit sector is the place where we have the most work to do,” McGlaughon said. “We have a long way to go in terms of having effective leadership and governance.”

Kathryn Miree, president of Kathryn W. Miree & Associates in Birmingham, Ala., said leadership also is critical for nonprofits in developing policies for gift acceptance and endowment.

Nonprofits face increasing pressure to be accountable and good fiduciaries and stewards of funds, she said.

Policies on accepting gifts “give you the ability to say ‘no’ when all you want to say is ‘yes,’” Miree said, and also help engage the nonprofit’s board and help the legal, finance and development staff work together more effectively.

“Good policies help you manage liabilities, build strong relationships with donors, and foster effective, cooperative internal communication,” she said.

As Light, McLaughon and Miree made clear, nonprofits hold their fate in their hands.

By building their organizational capacity and leadership, and setting policies that are clear to donors and the organization alike, nonprofits can go a long way to restoring and building the confidence and support they need to advance their mission.


  • At 2:19 AM, Anonymous Anonymous said…

    The challenge is that painting a simple picture of strategy and shared objectives can often be difficult outside the private sector where profit, customer satisfaction and cash flow can be relatively simple to explain.

    However, all the reserach shows that real benefits comes from the ability of leaders to create a 'line of sight' between corporate objectives and what people are doing day to day.


  • At 8:24 AM, Anonymous Anonymous said…

    Could this article possibly contain anymore buzzwords?

  • At 12:34 PM, Anonymous Anonymous said…

    While nonprofit leaders are passionate about the organizational mission, the need for ongoing fundraising and current budget demands place their focus on the short term. This tyranny of the urgent creates a hurdle to reaching the organization’s full potential. Furthermore, it hampers the ability to reach a secure financial future.

    Long term vision and communication are the keys. Developing the vision is the start. Nonprofit leaders including the board must then cast that vision to their donors who can make a difference.

    Developing long term relationships with key donors is a must. Keeping key donors involved with success stories, how the community was served, and expressing appreciation will cultivate the relationships.

    Getting to know donors beyond their philanthropic intent, getting to know their desires concerning everything from family to community heritage, will go a long way to forming a partnership in which the donor will champion the nonprofit’s cause. The nonprofit leader gets to know the donor as an individual.

    With this knowledge the nonprofit and donor can explore gifts that secure the organization’s financial future. Planning tools exist to structure gifts that keep on giving. These tools by their nature can lead to intergenerational relationships which are crucial to a secure future.


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