It’s that time of year again – the Nonprofit Finance Fund’s annual State of the Sector Survey of nonprofit leaders.
If you are a nonprofit leader struggling with increasing demand for services amid diminishing funding, if you are frustrated with funders’ lack of understanding of the challenges you face, if you want the sector to recognize the hurdles and get better at addressing them, you need to voice your perspective by taking the survey.
The Nonprofit Finance Fund is one of the country’s leading community development financial institutions (CDFI) making millions of dollars in loans to nonprofits and pushing for fundamental improvement in how money is given and used in the sector.
They started the annual State of the Sector survey when the recession hit in 2008. Collective efforts to understand the extent of the challenges the economic restructuring was having on the nonprofit sector were decentralized and largely anecdotal. NFF’s survey is an effort to bring information about the nonprofit community together so that it can be used to address these challenges. You can view the results from past surveys here.
The anonymous survey takes 10-15 minutes to complete and asks about your organization’s recent financial and management challenges. The knowledge gathered through the annual survey is shared with funders, government officials, nonprofits, media, lending institutions, and many others through conferences, policy recommendations, and other efforts. And now with more than 5 years of Sector Survey data, we can analyze and understand trends and begin to make a larger argument about what nonprofits need and what funders and policymakers must do differently to support their work.
The survey really is the only effort of its kind to take the pulse of the sector. And I am excited to see how the results are increasingly used to advocate for some significant improvements to the state of the sector.
This year’s Sector Survey will be open to responses until February 17th, so if you are a nonprofit leader, click here to take the survey and let your voice be heard. The results of this year’s survey will be available in early April.
Photo Credit: Nonprofit Finance Fund
Earlier this month, there was a great post by Linda Wood from the Haas Fund bemoaning the fact that 73% of nonprofit leaders in a recent Center for Effective Philanthropy study said they lack resources to build their leadership skills. And the recent Meyer Foundation Executive Director Listening Project found that nonprofit leaders’ biggest challenges are fundraising, human capital management and board of directors management — all leadership challenges.
This doesn’t surprise me at all.
I constantly witness the lack of support nonprofit leaders receive for building their leadership skills. Leading a nonprofit is an incredibly demanding task and the challenges are only growing. Nonprofit leaders are expected to magically solve the world’s problems, on a shoestring, while herding a disparate group of volunteers, funders, clients.
Which is why I think nonprofit leader coaching holds so much promise for the sector. If a struggling nonprofit leader had a strategic partner who could help her think through staffing, fundraising, board management and strategic decisions, instead of having to figure it out all on her own, it could be transformative.
Nonprofit leader coaching is one-on-one strategic counsel from someone with deep management, financial, and strategy expertise. With a strategic coach, a nonprofit leader can find solutions to issues like how to:
- Create the most effective staffing structure for growth
- Recruit and engage an effective board
- Diversify and grow funding streams aligned with the nonprofit’s specific mission and operations
- Analyze strategic opportunities for the organization
- Develop effective collaborations that build on the organization’s assets
The return on investment of coaching can be really exciting. Let me give you some examples:
Increased Board Fundraising
Fundraising is such a tricky business. Often nonprofit boards are fairly ineffective at it, largely because they and their nonprofit leader don’t know how to focus the board’s efforts. This was true for one of my clients whose board didn’t understand fundraising and was confused about their role. Through coaching, both with the executive director and board members, the board now understands how each of them individually can contribute to bringing money in the door. They also understand how to focus their efforts on the most profitable activities and now have the skills and knowledge to move the organization’s financial strategy forward. As a result, the board has dramatically increased the number of new donors to the organization.
Clearer Strategic Thinking
Nonprofits are constantly bombarded with new opportunities, new partnerships, new funding ideas. A coach can help a nonprofit leader think through how a new opportunity might fit with the overall organization strategy, ask hard questions and analyze the costs and benefits. In this coaching role, I encourage nonprofit leaders to take a step back and examine all of the implications of a decision, how it might draw resources away, what impact it will have on the larger work, how it moves the organization closer to or farther away from strategic alignment, and so on. Coaching can get nonprofits away from group think and towards making smarter, more strategic decisions.
More Productive Staff
Management of staff is one of the hardest jobs of being a leader in any setting, but I think it’s particularly tricky in the nonprofit sector where resources are tighter and nonprofits are often encouraged to play nice at all costs. In coaching around staff challenges, I help a leader create an effective staffing structure for the organization, analyze and resolve staff conflicts, and make sure all staff are playing to their strengths.
Strategic coaching is not right for every nonprofit leader because it takes a real commitment to change, a willingness to analyze situations, and an openness to making difficult decisions.
But coaching is right for a leader who:
- Leads an organization that is ready for change
- Is open to trying new approaches
- Wants to have difficult, but important, conversations with board, staff and funders
- Needs a thinking partner to help make strategic decisions
- Recognizes that she doesn’t have all of the answers
- Is ready to build her leadership skills
Photo Credit: PhilanTopic
In this month’s Social Velocity blog interview, I’m talking with Monisha Kapila. Monisha founded ProInspire to develop the next generation of nonprofit leaders by expanding the talent pipeline, developing professionals, and increasing diversity in the social sector. She has created partnerships with leading nonprofits like Global Giving, Share Our Strength, and Year Up. Monisha’s vision to start ProInspire stemmed from her own experience transitioning from business to nonprofit, and her passion for helping organizations and individuals achieve their potential for social impact.
You can read past interviews in the Social Innovation Interview Series here.
Nell: One of the things ProInspire does is train business professionals about how things are different in the nonprofit sector. Can you, and how do you, teach people about fundamental cultural differences between the business and nonprofit sectors?
Monisha: Through our work with the ProInspire Fellowship, we recruit and train business professionals to spend one-year working full-time at a leading nonprofit. Fellows have the opportunity to use their skills for social impact, and gain an entry path into the nonprofit sector. Over the past five years, we have learned that it is less important to focus on differences between business and nonprofit sectors, and more important to focus on how to be successful at a nonprofit. We also help our Fellows think abut how to translate these skills to be effective in the social sector.
Before starting the Fellowship, we send Fellows articles on transitioning (some great ones from Bridgespan) and The First 90 Days book. During orientation, we have Fellows develop their transition strategy and their learning agenda. We also discuss the phases of culture shock that people typically feel when they move to a new country, as we have seen Fellows go through similar emotions as they move through sectors. Finally, we have our alumni share their experiences in moving from business to nonprofit. Just having a common language and a peer group helps Fellows with the transition.
Nell: In the past there has been a backlash in the nonprofit sector against people with a business background entering the sector and ignoring the complexities that differentiate the nonprofit sector from the for-profit sector. How do you address these tensions?
Monisha: We do this in a few ways. First, we have a very competitive selection process and evaluate candidates’ ability to be successful in the nonprofit sector before they are selected to be a Fellow. Things that we look for include humility, flexibility, initiative, and managing up. These are skills we believe are critical for anyone to be successful in the nonprofit sector.
Second, we talk about the challenges many business professionals face when moving into the sector and the Fellows think about how they will address them. The top ten we focus on are:
- Avoiding the “white knight” syndrome
- Proving that you are passionate about the mission
- Working with less resources
- Making decisions in a more complex environment
- Wearing many hats
- Learning to self-manage
- Getting feedback about your performance
- Finding professional development opportunities
- Creating your own career path
- Working hard for less money
Third, we emphasize that the Fellowship is a learning experience. Our partners are looking for Fellows to bring their business skills to the nonprofit, but they must first learn about the organization and then figure out how to adapt their skills in that context.
Nell: What is your view on arguments (like Dan Pallotta’s) that nonprofit leaders are sorely underpaid. Do we need to address social sector salaries in order to attract top talent or are there other more important hurdles to attracting talent to the sector?
Monisha: I think that compensation is definitely a factor in attracting and retaining nonprofit leaders. It will become even more important as we start to see convergence in the social sector, with leaders having opportunities to make social impact in nonprofits, for-profits and government.
I have no doubt that talented people are willing to get paid less to do work that is meaningful. Every year we have hundreds of talented professionals from consulting, banking and corporations who apply to our Fellowship program and take pay cuts to work in the nonprofit sector. But as we see Fellows grow in their careers, compensation becomes a bigger issue.
Nonprofits have a lot of assets they can use to offset the lower compensation. Namely the level of responsibility that leaders get at nonprofits is often higher than they would get in a similar role at a for-profit. When I came out of Harvard Business School, I spent a year as an HBS Leadership Fellow at Accion International. I managed product development, marketing, and partnerships for micro-insurance products. Over time I developed strategic alliances with major companies like Visa. After my Fellowship, I joined Capital One in a product development role, but my responsibilities were more narrow. I was supposed to primarily focus on the product – there were other teams for strategic partnerships and for marketing.
So while I think compensation is and continues to be an issue, opportunities for nonprofit professionals to contribute to multiple aspects of the organization’s success are extraordinary. I always tell ProInspire Fellows that one of the benefits of being at a resource-constrained organization is that you will rarely be told “no” if you want to take on more responsibility. This is particularly exciting when you feel very strongly about an organization’s mission. These opportunities to wear many hats, especially near the beginning of one’s career, might not make up for a lower compensation, but we cannot ignore their importance.
Nell: Since ProInspire’s model is based on working with individuals (“Fellows”) how do you reach a tipping point that will address the approaching leadership shortfall for the entire nonprofit sector?
Monisha: ProInspire’s focus is on helping individuals and organizations achieve their potential for social impact. With our Fellowship program, we partner with nonprofits to bring in Fellows who address critical organizational needs. We work closely both with the organizations and the Fellows who are part of our program. The Fellowship demonstrates the ways that nonprofits can expand their talent pools and shows business professionals paths into the sector.
I don’t think we will address the leadership shortfall just by recruiting more people to the sector. Our next area of focus is on how do we support emerging leaders to grow and increase their impact at nonprofits. This summer we are piloting “Managing For Success”, a leadership development program for first-time managers at nonprofits. Our goal is to develop a high quality, cost effective program that can be scaled nationally and reach many more people.
Finally, we think it is important to show thought leadership around the issue of talent and leadership in the nonprofit sector. This is an issue that many organizations have put on the back burner and we are working with other partners to make it a priority. I recently participated in the White House Forum on Cross Sector Leadership and was excited to see this is a priority for our government, corporations, nonprofits, and foundations. We will only reach a tipping point when we have multiple players in the nonprofit sector thinking about developing talent to drive forward these important organizations that make a difference in the world.
Nell: ProInspire was launched at a time when record numbers of college graduates have an interest in social issues. What do you think makes this generation different in terms of their approach to social change and their approach to organizational structure?
Monisha: Millennials commitment to social change is unlike any generation before. This generation has been taught that they can do anything, and they feel drawn to doing work that has an impact. Communication and social media have played a big role in making them more connected to world events and causes they care about. We see this with the high level of interest in our Fellowship program. Young people who have great jobs at places like Bain, JP Morgan, and Microsoft tell us that they have been waiting for this opportunity to do work that has a purpose.
I have seen that Millennials are also “sector agnostic” – they want to make a difference and don’t care what sector they are in. This means that nonprofits will start to compete more and more with tech start-ups, social enterprises, and the public sector for talent that cares about social issues.
Last week I spoke to a group of nonprofit leaders about 5 Nonprofits Trends to Watch in 2013 and a woman stood up and said “These trends are all well and good, but we need to talk about the fact that the money just isn’t there anymore. We are having to compete with more organizations for much less available funding. We need solutions to that.”
Agreed — fewer resources and more competition for those shrinking resources is the reality we are facing. But it’s not going to change anytime soon. So it is up to nonprofit leaders to embrace and adapt to that new reality. Instead of beating our heads against the wall of change, let’s adapt to meet it.
In fact, it is time for a new kind of nonprofit leader, one who has the confidence, ability, foresight, energy, and strength of will to really lead the nonprofit sector forward.
This new nonprofit leader:
Moves to Impact. She realizes that it is no longer enough to just “do good work.” Nonprofits must create a theory of change and then find a way to measure and articulate the outcomes and impact they hope they are achieving.
Finances the Work. He works toward completely integrating money into the mission his nonprofit is trying to achieve, understanding that big plans are not enough, he also must finance them. And beyond just recognizing his lack of infrastructure, he puts together a plan for raising capacity capital and convinces donors to start investing in a stronger, more effective organization behind the work.
Refuses to Play Nice. She overcomes the nonprofit norm of politeness at all costs and gets real with funders, board members, or staff who are standing in the way of the mission and impact of the organization.
Looks Outside. He understands that a nonprofit can no longer exist in a vacuum. He and his board and staff must constantly monitor the external marketplace of changing client needs, demographic and economic trends, funder interests in order make sure their nonprofit continues to create community value.
Gets Social. She embraces the idea of a networked nonprofit and is willing and able to open her organization and let the world in as fully engaged partners in the work her nonprofit is doing.
Asks Hard Questions. He constantly forces himself, and his high-performing team of board, staff, funders and volunteers to ask hard questions (like these and these) in order to make sure they are pushing themselves harder, making the best use of resources and delivering more results.
This new nonprofit leader is confident, engaged, and savvy. She will, I have no doubt, lead this great nonprofit sector to new heights.
If you need help figuring out how to adapt to this new reality, let me know.
Photo Credit: John Morton
I’ve been doing the monthly Social Velocity Blog Interview for 2 1/2 years now and have talked with more than thirty inspiring leaders in the world of social innovation. But now I need your help.
Over the last few years, I’ve interviewed
- Social investment gurus like Kevin Jones, Antony Bugg-Levine and George Overholser
- Philanthropic thought leaders like Phil Buchanan, Lucy Bernholz, Clara Miller and Sean Stannard-Stockton
- Nonprofit leaders pushing innovation forward like Dennis Morrow, Susan Comfort and Karina Mangu-Ward
- Social entrepreneur startups like Erine Gray and Ted Howard
- Sector activists like Robert Egger and Jeff Raderstrong
And many, many more.
It’s been amazing to hear from these leaders about where we’re going in the world of social change and where they hope to take us. You can see all of the past interviews here.
But now I’d like your ideas for who I should interview next. What all of these interviewees have in common is that they are people who are pushing boundaries, asking hard questions, creating new realities, making real social change. Who’s next?
So help me add to the list. If you have a suggestion for who I should interview next, leave a comment below or email me at email@example.com. Thanks for your help!
Perhaps it is the nature of trying to solve the intractable, but social change leaders are heading for burnout. I see it more often lately. A nonprofit leader gives me a dazed look, rubs her temples with exhaustion, throws her hands up in the air, seriously considers just giving up.
The exhausting, endless hamster wheel nonprofit leaders live on is just not sustainable. At some point they will give out.
But the leaders who are driving social change are the very people we need to persevere. Because if they give up, where does that leave those who so desperately need the solutions they are providing?
Here are some things social change leaders can do to overcome burnout:
- Get Brutally Honest. With your donors, with your board members. Stop telling people what they want to hear and start being honest about the limits of your time, your staff’s capacity, your program’s scope. And stop chasing rabbit holes for your board or donors. You know what the reality is, so stop hiding it.
- Stop Fundraising. The thing that burns executive directors out more than anything is the endless, dysfunctional fundraising cycle. But if you could switch to a more effective strategy for bringing money in the door, and start to engage others (board members, donors, volunteers) to help, you would have a much smaller burden on your shoulders.
- Raise Capacity Capital. Executive directors are tasked with way too much. Most nonprofit staffers are doing the jobs of 2 or 3 people. That’s fine for awhile, but not long term. The only way out of that vicious cycle is to raise some money to hire key staff, or buy effective technology. That’s capacity capital.
- Get Inspired. Social change can be very inspiring. When you hit a wall, read about other leaders and the hurdles they faced, visit your own program and see the change that is happening every day, ask your staff and board why they are involved, ask donors why they give.
- Forgive Yourself. One thing I absolutely love about social change leaders is their undying commitment to the cause. So many of them have a deep calling for the work they do. But that can also have a dark side. They can become so passionate that they think taking a day off would be to let down the cause. They sometimes picture themselves as Superman and deny their human need for rest and regeneration. But the only way to create lasting change is to make it sustainable. You need to know when to say when.
- Get Some Help. You may be born to lead change, but a true leader knows how to engage others. You cannot do it all. Recruit and retain a staff to whom you can confidently delegate. Recruit a board that steps up to take key pieces off your plate. Ask your donors to tap into their networks to do some fundraising for you. This is not a one person show, rather you need to view yourself as a cheerleader, organizer, and leader of a vast army of people who are making social change happen.
When you feel your eyes glaze over, your head start to spin, a yearning for the family you haven’t seen in weeks, it’s time to take a step back. You are engaged in a marathon, not a sprint, and you can’t burnout after the first 5 miles. Long-term change takes time. Pace yourself.
Photo Credit: gb_packards
The news lately has been less than inspiring. The census data released yesterday reports that the economy may be worse than we thought, with 15% of Americans in poverty, and the median income decreasing. After an almost 3-year recession that followed two wars and the 9/11 terrorist attacks, I sometimes dwell on the fact that my oldest son, who will turn 10 in November, has grown up in an era of nearly constant uncertainty and fear. But instead of wallowing in these dreary days, we must find in ourselves, and particularly in those working toward social change, the will and determination to lead ourselves, our organizations, our communities away from despair.
These times require leaders who face the uncertainty with optimism, innovation and sheer willpower. And I don’t mean government leaders, although that would be nice for a change. I mean the leaders of even the smallest social change organization. In many ways, I believe it is up to the nonprofit sector and the countless organizations and funders that make up that great sector, to face, rather than shrink away from, the many challenges facing our country. It is so easy to become overwhelmed by the big challenges and the littler ones. And the leaders of our nonprofit sector are already so worn down by continuously being forced to do more and more with less and less.
But when the constant barrage of bad news gets me down, and I struggle to understand what my son’s life will be when he is my age, I think of a blog post that Kjerstin Erickson wrote on Martin Luther King day 2010. Kjerstin is the executive director of FORGE, a nonprofit working in African refuge camps. In writing her post, she was overwhelmed by the devastation following the Haiti earthquake and struggled to return to the optimism that a social change leader must have:
For a few days, I admittedly found myself struggling with the question of whether the change I’m seeking is even pragmatically possible. I asked myself what all the struggle is for if it can all come crashing down in an ugly testimony to our global shortsightedness. In the midst of the shame and grief, I even asked myself if I may be happier by not even trying. In this world of optimism and change, those thoughts are sacrilege. And yet, we’ve all found ourselves in moments like these. It’s part of the process of reconciling the world we want with the world we live in.
Because, in reality, if you are a leader working towards fundamental change to a social problem you must be inherently optimistic. The beliefs that a better world is possible and that you can do something to make it happen are, by definition, optimistic ones. But Kjerstin, like so many working for a better world, has moments of deep despair when confronted with a growing and seemingly insurmountable list of problems.
However, for Kjerstin, and other leaders driving social change, it is untenable to remain in the grips of despair. It is up to those leaders like Kjerstin who have envisioned a world without poverty, or homelessness, or uninsured children, or crumbling schools to face the bad news head on, dust themselves off, and find inspiration wherever they can. Kjerstin’s inspiration came from the words of a great leader who came before her, Martin Luther King, Jr:
When our days become dreary with low hovering clouds of despair, and when our nights become darker than a thousand midnights, let us remember that there is a creative force in this universe, working to pull down the gigantic mountains of evil, a power that is able to make a way out of no way and transform dark yesterdays into bright tomorrows. Let us realize the arc of the moral universe is long but it bends toward justice.
Now more than ever we need leaders who can point the way to brighter times ahead. And those leaders, that inspiration, I believe comes from the army of people leading social change: the inherently optimistic, passionate, driven, determined leaders who have never been content to sit idly by and watch problems go unsolved. They are the visionaries who believe, who have always believed, that there is still hope, that we can make something out of this mess. It is up to them to show us the way.
Photo Credit: kekecpp
- Download a free Financing
Not Fundraising e-book
when you sign up for email
updates from Social Velocity.
Sign Up Here