Addressing the Nonprofit Leadership Drain

I re-read a sobering report the other day originally published in 2007 by the Bridgestone Group.  They studied the leadership requirements of nonprofits with revenues greater than $250,000 (excluding hospitals and institutions of higher education) and 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.
  • Depending on consolidation and turnover rates, this number could 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 report goes on to suggest that 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.

We’re halfway through the time frame addressed by this report.  How do you and your organization plan to meet this looming challenge?   What should we be doing to train and recruit new talent?

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