The Golden Opportunity

 Post by James V. Toscano

As someone about to retire from his current position, I was intrigued to see the third Daring to Lead report and its significant findings, somewhat changed from the last two reports in this decade.

As reported by my friends at MAP for Nonprofts, there were three key findings in the latest version:

1. “Though slowed by the recession, projected rates of executive turnover remain high and many boards of directors are under-prepared to select and support new leaders.”
2.  “The recession has amplified the chronic financial instability of many organizations, causing heightened anxiety and increased frustration with unsustainable financial models.”
3. “Despite the profound challenges of the role, nonprofit executives remain energized and resolved.”

Energized Executives

In reverse order of the above, it is interesting that this special breed of nonprofit executives keeps coming on, energized and willing to lead. I see this in my nonprofit management graduate students at Hamline University’s School of Business. Now in my 50th year in nonprofits, I see this in myself, who can’t wait to get to the office in the morning and who spends probably too much time working.

So we have people with a Mission in mind. We have infinite ways to get involved. While eagerness is important, training is as well. Do we have enough trained executives to meet the coming need?

While an MBA or Masters in Nonprofit Management is not really necessary, it is a gauge of those interested in gaining the executive skills necessary to run an organization, for profit as well as non-profit. ( I would argue most of the training necessary for leadership is the same for both sectors, although this is another posting).

All of the prospective graduates in all MBA and Nonprofit Management programs nationally over the next ten years are insufficient to fill the “top” spots just in non-profits. This then calls for a number of additional steps to ensure a well-run, well-led nonprofit sector.

Chronic Financial Instability

Add in now the second finding, an amplified already chronic financial instability and a larger challenge emerges. Do we have too many nonprofits competing for les and less money, or do we need to discover new ways to add significant resources, or both?

The first finding says we will experience this very large turnover, reportedly 34 percent of executive directors in the next two years, regardless of being prepared. Boards are found to be wanting, policies not in place, transition plans insufficient and on-the –job training almost non-existent. Even if only half of these EDs leave, the others talked out of it, not being able to find a new position, not having their IRAs in good shape, whatever, we still have a massive problem.

Or is it the Golden Opportunity of the title?

The Opportunity

In finance, we often see market adjustments; in fact, a few most recently have been not adjustments but total realignments in incredibly unstable environments. Sounds a bit like the nonprofit world. With all of these directors leaving, is it time for this realignment of the nonprofits themselves?

Recently, on a panel to pick the outstanding nonprofit in Minnesota, based on Minnesota Council of Nonprofits Principles and Practices for Nonprofit Excellence, it became very clear that two aspirants were in the same area essentially doing the same thing, one much better than the other.

Is this a wonderful opportunity for cooperation, confederacy or consolidation? I’m not sure, given the need for much more detailed information and due diligence, although it is clear that the Boards of both, especially if they are among the one-third losing a director, should talk.

It is time for the three C’s mentioned above. It is time for a shake-out that results in a more highly efficient, productive sector, There is a common misconception that nonprofits are not as well managed as for profits; that is a myth. Nevertheless, in all three sectors of the economy, there is need for continuous improvement in quality, efficiency and productivity.

Increase Training Opportunities at All Levels

We need to get on with this, as well as understand that we need much more training opportunities deliberately structured into nonprofit organization policies. We need more in-house training, we need more certificate training, we need much more online training and we need, above all, continuous mentoring and coaching at each level of an organization.

How often do we appoint new executive directors, then leave them high and dry after welcoming them? We not only need better transition policies in searching for an executive, we need a plan that has continuous mentoring and coaching after the executive is in place. The same is true for all levels of management, for all levels of employees, given future organizations will be run bottom up, rather than top down.

The results of such a two-fold approach to nonprofit organization in the future will more than pay for the resources invested, both in terms of finance but, more important, in terms of benefit to the community.

And if we had to describe what it is we do, it isn’t primarily about nonprofits as an economic force, but as an engine of social good, as the sector of the society that brings benefit, that helps correct the failures of the marketplace in ways that creates a caring, positive community.

Copyright 2011, The Good Counsel, division of Toscano Advisors, LLC. May be duplicated with citation.

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