Non-Profit Leadership Crisis

Great article in the Palo Alto Daily News on the current leadership crisis in the non-profit sector. 

Nonprofit organizations face an unprecedented challenge in recruiting and retaining the next generation of leaders, according to a sobering report released this week by CompassPoint Nonprofit Services in San Francisco.

And unless it meets the challenge, virtually every sector of society will feel the effects, noted Linda Wood, senior program officer with the Evelyn and Walter Haas Jr. Fund, a San Francisco organization that three years ago began offering leadership development grants for nonprofits.

"As a society, we are more and more dependent on the nonprofit sector to deliver services to have strong cultural organizations, to fight on behalf of people with respect to civil rights, to create strong and healthy communities, and even to educate our children," Wood said.

Government is outsourcing more work to nonprofit organizations, said Jeanne Bell, executive director of CompassPoint. And most environmental organizations are nonprofit, she added, as are a growing number of community health clinics.

"If we're not building leadership in that sector, it's a no-brainer that there's a lot at stake," Wood said.

It goes on to say...

"What you're seeing are big cohorts retiring all at once, which is creating a lot of questions about the future of the leadership," said Marla Cornelius, projects director with CompassPoint and one of the authors of the report.

In addition, the number of nonprofit groups keeps expanding, fueled in part by baby boomers who made fortunes in industry turning to philanthropic ventures, according to a 2006 article in the Stanford Social Innovation Review called the "The Leadership Deficit," published by Stanford University's Graduate School of Business.

Between 1995 and 2004, the number of nonprofits with annual funding exceeding $250,000 grew from 62,800 to 104,700, a growth rate of nearly 6 percent, the Stanford article stated. And between 1992 and 2002, each year saw the formation on average of 2,900 new foundations, which disseminate grant money to nonprofit groups that directly provide services.

As a result, noted Thomas Tierney, the study author, the nonprofit sector will need to recruit an estimated 640,000 new executives in the next decade - nearly two and a half times the number currently employed.

Many nonprofit organizations, Tierney wrote, are "one person away from a leadership crisis."

So, what are some of the conclusions on how to counteract this problem?

To attract enough high-caliber nonprofit leaders to meet the growing demand, the report outlined a series of steps that executive directors, boards of directors, individual donors and foundations can to take to recruit and retain leaders.

A key is for nonprofit boards and foundations, as well as the public, to support increased salaries and benefits for those working in the nonprofit sector. The report noted that "we tend to undervalue nonprofit work and the people who do it."

And along with better compensation, more support is needed to fund internal development programs.

Also, the job of executive director needs to become less onerous, emphasized Wood, as younger nonprofit workers report wanting better work-life balance than their predecessors.

"One of the goals is to take the burden off the shoulders of the executive director, and build a senior team," she said.

"In the past, our job was to roll up our sleeves and do the good work for the good cause, and not focus on infrastructure needs and professional development," Glenn said.

"The for-profit world is very mindful of developing within and spending lots of money to do it," she continued. "And that isn't part of the culture of the nonprofit world."