June 09, 2006

 

RESEARCH ROUNDUP

 

Executive Turnover a Major Capacity Challenge for Nonprofits

Daring to Lead 2006
A National Study of Nonprofit Executive Leadership
A Joint Project of CompassPoint Nonprofit Services and The Meyer Foundation
www.compasspoint.org/assets/194_daringtolead06final.pdf

This major national survey of nonprofit executive directors revealed some unexpected findings, including the fact that one in three executive directors is eventually fired or forced out of the job.  Perhaps less unexpectedly, the report finds that Boards of Directors are a major source of executive burnout.  Twenty-three percent of executive directors named consulting as their ideal next job, the second choice after working for another nonprofit (32%).  The study also found that executives over 60 are not planning on retiring soon – two thirds say they plan to stay in the current jobs for 3 or more years, 12% anticipate staying for more than five years, and only half said retirement is their ideal next role.  The report concludes with a series of recommendations for executives, boards, funders, and capacity builders.  Recommendations for capacity builders include questioning conventional wisdom about boards, providing fundraising and financial management training, and promoting succession planning.

 

Nonprofits Face Unique Challenges in Attracting and Retaining Top Talent

The Nonprofit Sector's Leadership Deficit
Published by The Bridgespan Group, Inc.
Written by Thomas J. Tierney
www.bridgespangroup.com/PDF/LeadershipDeficitWhitePaper.pdf

Bridgespan estimates that the nonprofit sector will need as many as 640,000 new senior managers (including executive directors, chief operating officers, and chief financial officers) over the next decade.  The report points to a lack of robust management education programs and intermediaries to help fill the gap.  While the private sector is able to invest in cultivating management internally, even large nonprofits are too small to do this effectively.  The report points out that businesses fill 60-65% of senior management positions internally, while for nonprofits, the figure is closer to 30 or 40%, with external recruiting being more risky and costly.  "Many successful business CEOs spend well over half their time on people-related issues.  In contrast, the executive directors of nonprofits tend to devote the lion's share of their time on fundraising."  The author recommends investing in leadership capacity, improving management rewards to attract and retain top talent, and expanding recruiting horizons beyond small circles.

 

Investing in Leadership: Volume 1 & 2

Volume 1:  A Grantmaker's Framework for Understanding Nonprofit Leadership Development
Published by Grantmakers for Effective Organizations
Written by Betsy Hubbard
www.geofunders.org/_uploads/documents/live/FINAL-InvestinLeadership Vol1.pdf

GEO's literature review provides a grounding of what is known about leadership development.  While there are scores of volumes on the topic of leadership, there is comparatively little research or evidence on how to develop leaders.  The paper underscores the importance of placing leadership in a broader view of organizational capacity building, not as a stand-alone intervention.  It points to "collective leadership" as a rising leadership theory that "involves facilitating participation, understanding divergent perspectives and drawing upon the collective wisdom of the group."  The report encourages funders to help grantees think strategically about leadership development, and focus considerable attention on attracting and retaining leaders. 

Volume 2:  Inspiration and Ideas from Philanthropy's New Frontier
Published by Grantmakers for Effective Organizations
Written by Kathleen P. Enright
www.geofunders.org/_uploads/documents/live/Investing in Leadership Volume 2.pdf

Volume II includes a series of case studies of grantmaker-supported leadership development programs.  It underscores the importance of collective leadership as outlined in Volume I, and "raises questions about the utility of leadership development programs that are focused exclusively on the executive director."  The report also focuses on strengthening the leadership capacity of networks to deal with community and systems change, and developing leadership within the context of the real challenges facing their organizations.  Finally, the report encourages grantmakers to develop strategies for continuous leadership support, including training, coaching, peer learning and other follow-on support.

 

High Turnover and Diversity are Major Challenges for Nonprofit Sector 

Workforce Issues in the Nonprofit Sector:  Generational Leadership Change and Diversity
Published by American Humanics Initiative for Nonprofit Sector Careers
Written by R. Patrick Halpern
www.humanics.org/site/c.omL2KiN4LvH/b.1537171/k.5CBD/Research_and_Resources.htm

This publication provides a literature review on nonprofit sector workforce issues and includes a general overview of the demographic changes in the United States and the relationship to the nonprofit sector workforce.  The report points out that the nonprofit sector has a higher turnover rate than the private and public sectors, and issues of retention and diversity need to be addressed.  The report finds that the nonprofit sector employs a greater percentage of African Americans but a smaller proportion of Latinos as compared to the pubic and private sectors, and overall employs a lower percentage of all people of color as compared to the general population.  Additionally, the report finds that women are paid less than men in the same positions.  To improve, the research shows that organizations must make a commitment to diversity at the leadership level, that organizational culture must change, and funder support is critical.

 

How to Make the Best of Charitable Oversight

The Value of Relationships between State Regulators and Philanthropy
Published by the Council on Foundations and the Forum of Regional Associations of Grantmakers
www.givingforum.org/policy/regulators.html

This report provides data and case studies on the relationship between state attorneys general and the charitable sector, based on a study of 16 key states such as New York, California, Pennsylvania, and Illinois.  The paper provides examples of regulator-philanthropy relationships, such as mandated Charity Advisory Councils, voluntary or ad-hoc advisory groups, and project based collaboration. Based on the study, the report offers lessons learned for strengthening this relationship, including getting buy-in from the top, setting clear expectations and building trust.

 

Study Identifies Seven Core Components of Learning Foundations

Learning for Community Change: Core Components of Foundations that Learn
Prepared for The Program on Philanthropy and Community Change of the Chapin Hall Center for Children at the University of Chicago
www.chapinhall.org/article_abstract.aspx?ar=1422&L2=63&L3=110
(Users are requested to register to download the publication.)

This report is based on interviews with funders, foundation board members, experts and researchers in the community-change field about ways to build and strategically apply knowledge.  The authors identify seven core components of learning foundations, including the importance of leadership on staff and board that promotes learning, developing a learning-oriented organizational structure, and a commitment to share learning with the broader field. 

 

Women Gain Career Skills through Volunteering

Power Skills - How Volunteerism Shapes Professional Success
Study conducted for WOMENS WAY
www.markitects.com/mtx/powerskills.html

This study of 75 professional women's experiences with volunteering showed that professional women gain a great deal of experience through volunteering that directly enhances their careers.  The report finds that "technical business skills, such as financial and human resource engagement and strategic communications, were gained as participants learned to exert influence... and build leadership skills and self confidence.  Some study participants attribute their confidence and business success more to their nonprofit endeavors than to their professional experience or formal training."  The study also found that women at the peak of their careers also play a leadership role in their chosen nonprofit endeavors.

 

Foundation Giving Continues Modest Growth in 2005, Forecast Flat for 2006

Foundation Growth and Giving Estimates:  Current Outlook
Published by The Foundation Center - part of the Foundation Today Series
www.foundationcenter.org/gainknowledge/research/pdf/fgge06.pdf

The Foundation Center reports that Foundation giving grew by 5.5% in 2005, marking the second year of modest growth after two years of decline.  The growth was attributable to a "modest rise in the stock market, new gifts into foundations, and the establishment of new foundations."  The Foundation Center forecasts minimal growth in giving in 2006, based on a survey of grantmakers.  While 52% expect to raise their giving in 2006, 32% expect to reduce their giving in 2006, a far higher percentage than in previous years (25% in 2005 and 18% in 2004).  Of note:  community foundations experienced far less of a dip in assets in the early 2000s and have benefited from larger asset gains, thanks to diverse pools of individual donors.

 

 

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