Nonprofit Leadership Sea Change Requires New Skills

by Dan Schipp

We knew it was coming and now it is staring us in the face.  Yes, ready or not . . . there’s a considerable change coming in the leadership of our nonprofit organizations. 

With many baby boomers holding top executive positions in the nonprofit sector and reaching retirement age in the next few years, there’s a sea change in nonprofit leadership taking place. 

According to research conducted by the Bridgespan Group (“The Nonprofit Sector’s Leadership Deficit”, T.J. Tierney, 2006), over the next decade nonprofit organizations will need to attract and develop 330,000 to 640,000 new senior-level managers.  In just four years, the not-for-profit sector will reach a point where it will need almost 80,000 new senior-level leaders annually.

Not only will the nonprofit sector need many new leaders, it will need leaders who will be ready to handle the ever-increasing demands and complexity of nonprofit management.  What are the competencies they will need to excel in their roles?  This is the question that the Nonprofit Leadership Alliance pursued in a study it undertook in 2010.  The results of this research were released in the past year in a report entitled, “The Skills the Nonprofit Sector Requires of its Managers and Leaders” (Nonprofit Leadership Alliance, June, 2011). 

The study, perhaps the first ever comprehensive assessment of the skills required by the nonprofit sector, involved 3,200 nonprofit leaders from various areas of focus within the sector.  Human services (35%), education (17%), heath (10%), and cultural arts and humanities (7%) were the top-represented areas in the study.  I recommend reading the full report but here are a few highlights.

The competencies deemed to be highly important for mid-level and executive leaders to have are the following (ranked in order of most importance):

• Ethics and Values – understanding the importance of personal and organizational ethical standards, accountability structures, and a code of conduct for an organization devoted to public service.
• Board and Committee Development – understanding the purpose and role of the board of directors, the dynamics between an organization’s staff and its volunteer directors, and staff support strategies.
• Nonprofit Accounting & Financial Management – understanding basic nonprofit accounting, budget development, audits, and the monitoring of fiscal operations.
• Diversity Awareness – understanding professional practice and interaction skills in culturally diverse settings, enabling one to navigate dilemmas and challenges in such settings.
• Nonprofit Management – understanding the central importance of mission orientation, as well as public policy processes, human resource procedures, and strategic planning.
• Community Outreach/Marketing and Public Relations – understanding the role of community outreach and marketing strategies in building public awareness of the mission and messages of nonprofit organizations.
• Risk Management and Legal Issues – having a working knowledge of risk management, crisis management, and the basic laws and regulations under which nonprofits operate.
• Fundraising Principles and Practices – understanding the variety of fundraising strategies and methods used to support the mission of an organization, including grants, major and planned gifts, annul funds and special events.
• Program Planning, Implementation, and Evaluation – ability to assess needs within a population, ascertain the feasibility of a program, calculate the resources and staffing necessary, implement a program, and then evaluate and improve the program.
• Volunteer Management – understanding of American volunteerism coupled with the ability to create a volunteer program that harnesses volunteer service to advance the organization’s mission and also fosters the spirit of volunteerism.

How do you feel about the leadership bench strength in your organization?  Is it properly preparing entry-level and director-level professionals for future leadership roles?  Are your current and future leaders equipped with these competencies?  Do you have a talent pipeline in place to ensure a smooth leadership transition from the baby boomers to the next generation?

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