The Nonprofit Leadership Deficit

The Nonprofit Leadership Deficit: The Case for Nonprofit Training and Retaining

The following is an excerpt from a sobering report from The Bridgespan Group on the coming nonprofit leadership deficit over the next decade.  The bottom line projection is that nearly 80,000 new senior managers will be needed in the nonprofit sector by 2016. 

If raising funds for programs in these tough economic times is not challenge enough, the task of re-educating donors, boards and fundraising professionals on the need to invest more in attracting, retaining and training current and future leadership (a.ka. overhead) is one of the underlying conclusions of this report.

“The leadership deficit looms as the

greatest challenge facing nonprofits

over the next ten years.”

                                              Thomas J. Tierney

Except from the Executive Summary Report “The Bridgespan Group recently carried out an extensive study of the leadership requirements of nonprofits with revenues greater than $250,000 (excluding hospitals and institutions of higher education). We found that:

·         Over the next decade, these organizations will need to attract and develop some 640,000 new senior managers—the equivalent of 2.4 times the number currently employed.

·         If the sector were to experience significant consolidation and lower-than forecast turnover rates, this number might fall as low as 330,000. On the other hand, given historic trends, the total need could well increase to more than one million.

·         By 2016, these organizations will need almost 80,000 new senior managers per year.”

“The projected leadership deficit results from both constrained supply and increasing demand. The key factors include the growing number of nonprofit organizations, the retirement of managers from the vast baby-boomer generation, movement of existing nonprofit managers into different roles within or outside the sector, and the growth in the size of nonprofits.”

“Addressing the leadership deficit requires, first and foremost, that all participants in the nonprofit sector—from boards and current managers to foundations and individual and corporate donors—recognize the enormity of the problem and make it a top priority. Three difficult but critical imperatives will need to be addressed:

• Invest in leadership capacity. Skilled management is the single most important determinant of organizational success. Nonprofits must invest in building skilled management teams—even if that means directing a greater proportion of funding to overhead. Philanthropy must deliver the operating support required, and boards must reinforce the importance of building management capacity and quality.

• Refine management rewards to retain and attract top talent. To recruit more and better leaders, organizations will have to structure more competitive management packages, particularly in light of the push to hold managers to higher performance standards. The greatest rewards of nonprofit careers will always be intangible, but more attractive compensation is critical in times of labor shortages.

• Expand recruiting horizons and foster individual career mobility.

Nonprofits traditionally tend to hire from a small circle of acquaintances. That practice is no longer sustainable. Recruitment efforts will need to expand to new pools of potential leadership talent, including baby-boomers who wish to continue working, mid-life career changers seeking greater social impact, and the young. At the same time, the sector will need to strengthen and expand its mechanisms for attracting and developing managers and enabling talent to flow freely throughout the sector.

The leadership deficit looms as the greatest challenge facing nonprofits over the next ten years. We can use our unprecedented wealth to strengthen the sector’s capacity to meet society’s escalating demands; or we can allow its leadership deficit—with its debilitating consequences—to widen. We are at a crossroads. The choice is ours.”

Commentary from Geoffrey Canada, President and CEO of Harlem Children’s Zone, Inc.

A number of successful nonprofit leaders responded to this wake-up call including Geoffrey Canada, President and CEO of Harlem Children’s Zone, Inc.  Mr. Canada understands what it takes to plan for the future and make difficult decisions to ensure you get there. 

Concerning the leadership deficit he says, “We will have to go out of our way to provide (young talented program people) with opportunities and experiences that they would not organically get in their present positions. We need to expose them to areas such as development, budgeting and working with trustees; and to provide workshops where they can begin to stretch their skill set.”

View the entire report, The Nonprofit Sector's Leadership Deficit, and all commentaries.

Posted by Kathy Sullivan, CFRE, ESCH Consultant