Whether you think the nonprofit sector is facing a leadership crisis or a leadership transition, the issue is difficult to ignore and is likely already affecting your organization in some way. It may look like generational differences that are causing workplace disharmony, a founding executive director preparing to retire, or a talented young employee leaving because of a lack of opportunity for advancement. From a more academic perspective, most research on this issue focuses on how generational differences and structural issues within the nonprofit sector, along with demographic shifts, have created something of a perfect storm that will leave the sector without strong leadership in coming years.
Ready to Lead? Next Generation Leaders Speak Out, published earlier this year by the Annie E. Casey Foundation, the Meyer Foundation, Idealist.org and CompassPoint, is the latest report to focus on the generational aspects of the coming leadership transition. (To read the full report, visit http://www.compasspoint.org/.) The report focuses on the perspectives of next generation leaders (defined as those under the age of 35) and is based upon a survey of nearly 6,000 respondents. Unlike many other writings on the topic, the report includes numerous calls to action and is intended to spark dialogue within organizations and the sector as a whole about what current leaders, funders and next generation leaders can do to enhance the sustainability of the sector by ensuring that a leadership crisis does not actually happen. Some of these ideas include:
1. Rethinking power structures
Hierarchical power structures within many nonprofit organizations generally frustrate next generation leaders who see top-down decision making, lack of transparency around decision making, resistance to change and poor communication as ineffective and alienating. Report authors stress that “Executives who adapt their organizational cultures for less traditional hierarchy, while holding everyone accountable for meaningful mission impact, are in the best position to attract and retain the next generation of leadership.”
2. Helping next generation leaders develop
Current nonprofit executives can develop next generation leaders by helping them establish networks, creating opportunities to expand their management and leadership experience, serving as a positive role model, and by providing opportunities for mentoring. Report authors call upon current sector leaders to take responsibility for helping next generation leaders by taking a serious interest in their professional development.
3. Work-life balance
Next generation leaders cite long hours, compromised personal lives and the lack of appeal of the prevailing executive director job description as key deterrents to taking on an executive leadership role in the future. This perceived lack of work-life balance among current executive directors, like constantly sending late-night emails or working impossibly long hours, is not worth the sacrifice for many next generation leaders.
4. Making nonprofit work more financially viable
In a similar vein, next generation leaders are seriously concerned about the financial viability of building a career in the nonprofit sector. While such concerns are often dismissed by those who have worked for low salaries for the bulk of their career as being a sacrifice one has to make to work in the sector, next generation leaders are finding the tensions between committing to mission-related work and financial insecurity as a serious deterrent to staying in the sector. According to report authors, “Presumed financial sacrifice can no longer be part of the nonprofit business model if we want to attract and retain next generation talent. The too often touted psychological rewards of nonprofit work are no substitute for decent pay and reasonable working hours.”
5. The role of boards in setting policies regarding pay and benefits
Another important observation from the report is that nonprofit boards often ratify compensation and benefits packages that would be unacceptable in their own workplaces. This type of decision making, on both the staff and board levels, should become unacceptable if organizations are serious about attracting and retaining next generation leaders and, more importantly, developing a more sustainable economic model for the nonprofit sector as a whole.
What this means for the sector today
Many solutions cited in Ready to Lead and similar reports are in the works or already underway. For example, next generation leaders have access to far more professional development resources, educational programs, internships and volunteer opportunities than their baby boomer colleagues ever had. More organizations are thinking creatively about work-life balance and seriously considering the impact of generational differences on workplace dynamics. And, in many ways, next generation leaders are taking responsibility for their own professional development and are creating resources to help prepare themselves for executive leadership in the coming years. These positive developments will likely help attract next generation leaders to the sector and help retain them over time.
From my perspective, however, the issue that most threatens the sustainability of the sector through the leadership transition is the one of better pay and benefits. Because this issue derives from the structure of the sector itself, it is the most difficult to confront. It is also the hardest to discuss in a sincere way for the reasons discussed above. The reality is, however, that today’s young nonprofit professionals are living under very different financial constraints than the young nonprofit professionals of the 1960s and 1970s. Comparing the two experiences, as often happens when forming opinions on this topic, is comparing completely different realities.
The call for higher salaries does not equate to being able to buy designer clothes or a fancy car. Instead, a higher salary means being able to pay off the student loans that were necessary to get the degree that is required to get an entry-level job in the sector; or to start an entirely self-funded retirement plan in anticipation of Social Security being gone in 30 years; or being able to give up the part-time job that helps make ends meet. Without higher pay, attracting and retaining next generation leaders will become increasingly difficult, because the financial sacrifice associated with working in the sector will be too great or simply impossible to make. With the establishment of more progressive for-profit businesses and the better pay and benefits associated with similar government work, the nonprofit sector’s mission-based appeal simply will not be enough to attract and retain next generation leaders.
While low pay has always been a liability for the sector, it may become the issue that brings significant and widespread instability, ultimately affecting the sector’s ability to achieve the missions we all care deeply about. Therefore, current and next generation leaders should see this leadership transition as an opportunity to redefine the sector in bigger ways—to entirely shift the paradigm of what it looks like to do social change work. While this will likely include redefining executive director job descriptions and establishing better compensation and benefits packages for employees, the larger result should be redefining the economic model of the nonprofit sector to make it sustainable.
By Sarah Fischler, director of consulting for the Community Resource Center, a nonprofit organization that provides capacity building and technical assistance services to nonprofit organizations throughout Colorado. Contact her at fischler@crcamerica.org.
