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Needed: The Next Generation of Nonprofit Leaders

By Tom Watson on February 14, 2008No Comment

Needed: The Next Generation of Nonprofit Leaders by John Clinton

In the private sector, companies have lately taken a hard look at leaders and found them wanting: CEOs at Merrill Lynch, Citigroup, and other companies have recently been dismissed for failed strategies tied to sub-prime mortgage securities.  Indeed, businesses have grappled with a wide range of leadership issues in recent years, including questions about compensation, ethics, and succession planning.  Just last month, the Harvard Business Review (January, 2008) devoted its “special centennial issue” to “Leadership & Strategy” and included an article by L.A. Hill that posed the question, “Where Will We Find Tomorrow’s Leaders?”

The nonprofit sector, too, faces serious questions about the next generation of leadership.  One reason is demographic: baby boomer executive directors are soon to retire.  A 2004 survey of some 2,200 nonprofit organizations by the Annie E. Casey Foundation found that roughly 65% anticipated a change in top leadership by 2009.  At the time of the survey, more than half of executive directors were 50 or older.

The Casey report, which focuses on social-change nonprofits, is informed by detailed nationwide interviews with young nonprofit leaders (aged 25-40) who are often frustrated by their marginalized role in their own organizations.  The report’s recommendations include expanded intergenerational dialogue on leadership, increased investment in younger leaders—especially those of color—and more viable retirement paths for the current generation of leaders.

Other studies show that the leadership shortage springs from other factors, as well; some may prolong the shortage well beyond baby boom retirement years.  According to a report by the Meyer Foundation and CompassPoint, a 2006 survey of 2,000 nonprofit executive directors disclosed that about 75% do not plan to remain in that position in five years.  Among their reasons for leaving nonprofit sector leadership are burnout and a lack of work-life balance, along with low pay, the strains of fundraising, governance struggles with boards, and more attractive private sector opportunities.  Perhaps especially alarming is the finding that even with such looming turnover at the top, most leaders have not broached the subject of succession planning.  And at a time when successful business entrepreneurs increasingly turn to social entrepreneurship as a second act, nonprofit leaders may see an opportunity to straddle an ever-blurrier line between the private and nonprofit sectors. 

Given the durability of the baby-boomer leaders, many organizations confront the dilemma of “Founder’s Syndrome:” how to fill the shoes of the charismatic creator who gave birth to the organization long ago and shaped its culture over a span of decades. 
So what can be done?

The Casey report recommends investing in younger leaders, identifying and nurturing more leaders of color, developing better ways for current leaders (who may feel morally or financially obligated to stick with it–or both) to leave the organization, increasing intergenerational dialogue, improving organizational structures and decision making processes, and attending to work-life balance issues.

The Meyer report offers some similar suggestions, and advises greater candor among executive directors about their issues, while cautioning boards and funders about the severity of the problem and their own role in exacerbating it.  More optimistically, the study’s authors also note that a cohort of slightly younger nonprofit leaders may be poised to take the reins if given the chance; given the baby boomers’ disinclination toward full retirement, documented in AARP studies, this 47-50 year old group may be a key to the transitioning of sector leadership.

In the matter of Founder’s Syndrome, the graduate school at which this writer teaches has just launched “Leading After the Founder,” a program for nonprofit CEOs attempting to fill the shoes of long-term founders.  A six-month leadership development program started this fall, the program is designed to serve as a laboratory in relevant leadership issues.  Twenty Tenenbaum Fellows were selected for the program and fully supported financially by a gift from Tom Lee and Ann Tenebaum, who cited the need for “innovative programs that fill a specific, real-world need…to help strengthen (nonprofit) organizations’ strategy and leadership.”  A combination of one-on-one executive coaching, immersion in relevant leadership theory, and comparing notes with cohort colleagues is intended to guide these “next-gen” leaders toward preparing their organizations for 21st century challenges.

The crucial ingredients of effective leadership have long eluded both scholars and practitioners, almost to the point of reduction to the adage, “I know it when I see it.”  As the 21st century matures, and a generation of current leaders matures with it, the shortage of diverse, visionary, confident, ethical, energetic—and strategic—leaders is a pressing issue across all three sectors, with special needs for expanded financial resources, and other durable, non-financial forms of support, among nonprofits.

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