Leadership in the Third Sector
by Carolyn Love
Nonprofit organizations are being asked to take on more responsibility
for the welfare of society than ever before in the history of the
sector. Traditionally, these type of organizations fill the “gap”
between the services provided by the government and the products and
services available in the private sector. As the needs of society become
greater, the nonprofit sector is being asked to do more, especially at a
time when resources are dwindling.
Also, too, they are being threatened by a shortage of seasoned
professionals who can assume a leadership role in a broad spectrum of
organizations. A 2004 Survey of Colorado Nonprofit Executives revealed
that nearly half of the executive’s surveyed plan to leave their posts
within the next five years. This alarming fact was also confirmed at the
national level. According to an article written by Thomas J. Tierney in
the Summer 2006 issue of the Stanford Social Innovation Review “over the
next decade nonprofits will need to find some 640,000 new executives,
nearly two and a half times the number currently employed.”
I believe there are three primary reasons for the leadership crisis:
executive directors that are part of the baby boom generation are
planning to retire; the compensation and benefits package for nonprofit
executives is not as strong as compensation and benefit packages in the
public and private sectors; and lastly, burnout – as an executive
director of a small to midsize organization, you are responsible for
fund development, board development, program planning and implementation
and at times copying, stapling and other miscellaneous duties which
can’t be assigned. While the passion for the cause is strong among
executive directors, the ability to carry the burden of leadership is
becoming far too great. People are leaving the sector in search of
different ways to fulfill their life purpose. As people leave their post
they tend to leave the sector instead of moving to a different executive
director position.
The question then becomes what can be done to counteract this trend? As
baby boomers are leaving the nonprofit sector, they are also leaving the
private and public sectors. There are people who have enjoyed a
successful career in corporate American and are now seeking an
opportunity to fulfill their life’s mission. The nonprofit sector may be
just the place for their advanced skill set(s). Marketing to this group
may yield leaders who are skilled, dedicated and willing to work in
exchange for doing something that adds value to our society.
Currently, the profile of a leader in the nonprofit sector has
predominately been White female. The Denver Foundation is leading ground
breaking work to ensure the leadership pipeline is filled with people of
diverse backgrounds. This model may prove useful to other nonprofit
organizations.
Click here for more information about the
Expanding Nonprofit Inclusiveness Initiative.
I, myself, had been an executive director for three nonprofit
organizations. I understand from experience the “dance” around the issue
of money and benefits. In the struggle to keep overhead costs low and
return on investment high, personal development tends to get ignored.
However, it is this investment that will attract and retain the
leadership talent needed to meet the leadership demand. The thinking
amongst the nonprofit community is people are attracted to the sector
because of the “cause.” People want to feel what they do in life will
make a difference in the world.
While this is noble thinking, people still need to be
able to earn a living that enables them to live comfortably and have
access to healthcare and retirement benefits. Nonprofits need to get
creative and think of ways to provide security for its employees.
Foundations and others in the funding community will need to rethink how
operational expenses are funded. What is reasonable in small, mid-size
and large nonprofit organizations? We must get past the notion that
nonprofit executives earn six figure salaries and have special access to
private jets. Over fifty percent of nonprofits in the U.S. have an
annual budget less than $100,000. They operate on a “shoe-string” and in
most cases money goes directly to the delivery of services and not
towards the personal benefit of the staff.
As mentioned earlier people who work in the nonprofit sector do so
because of the commitment they have to the cause and population being
served. Nonprofits frequently operate in a state of funding crisis with
some barely keeping the doors open from month to month. The constant
cycle of fund development, board development and design and delivery of
services can be fatiguing. People can grow weary of always working in an
environment where change comes at a slow pace. Taking time for self
becomes secondary to meeting the needs of the constituent group being
served. Placing personal needs ahead of the needs of the organization
may be considered selfish.
However, taking the time to renew one’s spirit allows
you to give more not less to your organization. One organization in
Denver, Colorado now requires its employees to schedule time for self on
a regular basis. It actually has become part of their performance
review. People must show evidence of what they are doing to nurture
themselves. This is an excellent way to demonstrate the commitment to
those in service of others.
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