When the Baby Boomers begin to retire en masse from the nonprofit sector, will the next generation be ready to replace them? And more important, will they be willing? These crucial questions are addressed in a new survey, Ready to Lead, conducted by the Meyer Foundation in cooperation with CompassPoint, the Anne E. Casey Foundation, and Idealist.org. Nearly 6,000 individuals took part in the survey, the majority of whom were employed within the nonprofit sector at the time, none of whom had ever served as an executive director.
Undertaken in September 2007, the survey is a follow-up to the 2006 report Daring to Lead, which revealed that three-quarters of current nonprofit executive directors planned to leave their positions within five years. The reasons given included general burnout and insufficient compensation for their efforts. This new survey suggests that the next generation of potential executive directors is well aware of this dissatisfaction and that they are watching it closely as they carefully choose the next steps on their career paths.
Although the results of the latest survey show an encouraging attitude among members of Generations X and Y toward the pursuit of a meaningful career in public service, they also reveal the numerous perceptions and stark realities that could drive potential leaders away from the nonprofit sector. The majority of the survey's participants had doubts about the financial viability of a nonprofit career, most notably worrying about their retirement years. More than two-thirds of the participants reported that they feel they are currently undercompensated.
Additionally, where about a third of those surveyed aspire to the position of executive director, the results show that many feel they are not being properly mentored to step up to leadership positions within their own organizations. This feeling supports—or perhaps feeds off of—the general perception that nonprofits tend to turn to outsiders for top positions rather than hiring from within as private businesses are prone to do. Another notable obstacle revealed is the participants' fear of being held responsible for an organization's fundraising efforts, more specifically the fear of being held responsible for failing to secure enough money.
As the workforce contracts with the departure of the Baby Boomers, competition for future leaders is expected to increase sharply. The nonprofit sector will have to battle with the government and private business sectors for the right to hire the next generation's best and brightest. So will nonprofits be able to compete despite these negative perceptions? Despite generally offering less money and fewer benefits?
The study concludes that the promise of direct involvement in social change continues to draw in potential leaders despite the sector's disadvantages, perceived or otherwise. The report strikes a strong cautionary note, however, as to the urgent need to take steps to make the sector a more attractive employer. The analysis outlines specific suggestions, including replacing dated power structures, paying employees reasonable salaries, and providing sufficient benefits. Current executive directors are urged to be better mentors and engage in serious succession planning.
The complete survey results and detailed analysis are available at both Meyer Foundation and CompassPoint.
Patrick Ferraro, June 2008
© 2008, Philanthropic Research, Inc. (GuideStar)
Patrick Ferraro is a freelance writer in Seoul, Korea, and a former editor of the Newsletter.
Kevin Kovaleski, on 6/1/08 8:00 AM
In the nonprofit sector, an estimated 60 percent of open positions are filled through referrals and networking. For this reason, nonprofit organizations benefit from building wide professional networks. Thanks to the proliferation of social networking Web sites, nonprofits can go on-line to grow their networks, promote their "employer brand," and connect with prospective employees.
As there are more than 200 social networking Web sites, the following article discusses the most effective options for nonprofit organizations to market to and recruit top talent.
Gail Perry, on 6/1/08 8:00 AM
Every nonprofit organization has goals, and these goals can change over time. Some organizations set out to raise money for research and then begin to provide education. Some set out simply to educate but then move toward advocacy. And still others serve to meet the ever-changing needs of their members. As new goals get added and old ones go by the wayside, nonprofits need to adjust their communications and fundraising efforts accordingly.
For most organizations, Web sites are at the top of the list of things to update, especially when goals change. Typically during the update process, the overall design and content of the Web site gets re-evaluated, and the navigation is usually modified to reflect changes in positioning. Sometimes organizations can get so carried away with the structure and design of the Web site that they forget that it can be used for more than just conveying information. The Web site can be an effective tool to support and advance many of the organization's strategic goals.
When reevaluating or updating your organization's Web site, list all of your strategic goals. If you have three primary goals, such as increase membership, increase on-line donations, and increase advocacy, use them to guide the design of the Web site. If there are secondary goals, list them as well. Simply enumerating each goal will help the Web team focus on creating pages or an entirely new site that support your strategic initiatives.
Here are some practical tips to help ensure that your organization's Web site supports your strategic goals:
Patrick Ferraro, on 6/1/08 8:00 AM
With the 2008 presidential campaign season officially upon us, some nonprofits and their employees could soon find themselves faced with gray areas regarding the types of political activities they may or may not be permitted to become involved with.
The issue is a serious one: engaging in prohibited political activity can result in excise taxes or even loss of tax-exempt status. In 1992, the Landmark Church in Binghamton, New York, took out newspaper ads opposing Bill Clinton's candidacy for president. Three years later, the IRS revoked the church's tax exemption. A federal judge and then a federal court of appeals upheld the IRS's decision.
On the surface, the rules are pretty simple. The Internal Revenue Code states that
501(c)(3) tax-exempt organizations may not "participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office." Within set limitations, however, these same organizations are permitted to advocate for or against specific issues or ballot initiatives.
To ease the burden of ambiguity, the IRS has announced that its Political Activities Compliance Initiative (PACI) is once again in effect. Education is one of the two main themes of this program, as the IRS seeks to ensure that charitable organizations have easy access to the information they need to make the proper decisions regarding political activities.
"We take very seriously our obligation to ensure that tax-exempt organizations have the information they need to make the right decisions about political campaign activities," said Steven T. Miller, commissioner of the Tax Exempt and Government Entities Division at the IRS. "The vast majority of organizations want to do the right thing, and, as in past years, we will continue our efforts to make sure they have the information they need."
Enforcement is the second theme of the program, with the IRS Exempt Organizations Division making it clear that it intends to impose these restrictions—as well as the punishments that stem from their transgression—both firmly and fairly.
In the interest of education, the IRS has: