The Great Nonprofit Leadership Transition
On Organizational Turnover, Governance, and the Current State of Nonprofit Leadership Models
Have you noticed the leadership churn in our nonprofit sector recently? Everywhere I look, new searches for nonprofit leadership are being announced, often with less and less time since the last one. Leaders are announcing their departures without announcing a new role. New staff are celebrated, immediately followed by news of program closures or downsizing. Executive search firms are at capacity and turning down work, and are reporting diminishing applicant pools.
Our nonprofit and mission-focused business communities are under ever-increasing pressure, leading to unprecedented leadership turnover and threats to the sustainability of our sector. Just recently, it was reported that 80% of nonprofit organizations in Minnesota are just months away from financial distress.
It certainly matches with my experience. Over the past several years, as I have been connecting with leaders, so many of them are exhausted, burned out, lonely and frustrated. It's been exciting to see leaders who are new to our sector — and who bring diverse and fresh perspectives from both lived and professional experiences — elated to be starting their new career. And it’s been equally disheartening to see them flee (yes, flee) or be jettisoned from their roles within six months to two years. Tenured nonprofit professionals are no different, noting near-record levels of stress, burnout and fantasies about leaving the field altogether. At the same time, the shrinking workforce means there are more opportunities to pursue new roles. This means that rather than staying in a dysfunctional environment, there are more options for self-preservation and career mobility than ever before.
The reasons are many and varied for the current state of nonprofit leadership, but these are some of the themes I’ve heard:
1) For new leaders, especially those who follow long-time leadership, the role described during the recruiting process is drastically different from the reality of the organization’s current state — and not a good fit for their skills and strengths.
2) Nonprofit funding models are unsustainable and cannot support the pay our staff deserve. Meanwhile, demand and need for nonprofit services are at a record high.
3) The dynamics of our divided country are showing up in the workplace, distracting staff from the organization’s mission and derailing day-to-day work.
4) Boards of directors either lack governance knowledge, or our governance models aren’t meeting the needs of modern nonprofits. It’s challenging to know how to best support the leader — and because we’re all living in the same stressful world, it’s easy for board members to be distracted by the demands of their own full-time work.
Lest I think it’s just me in my own little bubble, the evidence is starting to support that what’s happening in the Minnesota nonprofit community is actually part of a larger, national trend.
According to this article from the Chronicle of Philanthropy, It’s been a challenge for nonprofits to retain and recruit staff at all levels since the height of the pandemic and CEOs are turning over at rates experts have never seen before.
These departures are contributing to significant destabilization, as organizations struggle to maintain continuity and momentum at a time when their work has never been more critical to the communities they serve.
All of this likely sounds overwhelming, but we can embrace this shift and learn to evolve our business models to leverage the opportunity and the change in perspective, skills and connections that these new leaders bring.
Yes, that is optimistic, because we have a lot of work to do. But I believe we can do it.
Speaking as a lifelong Minnesotan — the land of thousands of lakes and nonprofit organizations — we have built an incredible ecosystem of talented, passionate people who are thinking through these challenges and building innovative models to help move through the transition. And as I’ve been preparing for my own pivot, I’ve spent time with many of these people. Here’s what I’ve learned:
More sustainable business practices ARE succession planning. Having the right systems in place can support shorter tenures without sacrificing historical knowledge or requiring a new leader to take a year just to get up to speed.
Boards of directors are a critical component to maintaining stability and consistency in vision and strategy, but our murky-at-best governance models are hindering their ability to know the business well enough to do their job well, or sometimes at all.
Interim executive leadership is a profession, building standards and practices that enhance and develop the organization during transitional periods rather than just keeping the lights on. Experts in process and transitions are key to maintaining an organization’s momentum while preserving the bandwidth and energy of the organization’s executive leaders.
Executive search professionals are also stepping into this moment, adding increased time for a discovery period to really listen to stakeholders about the traits and expertise needed for the next leader. They’re also leaning into supporting the transition and onboarding period, sometimes staying involved for two years post-placement.
The bottom line is this: We can no longer rely on just one person, or even one leadership team, to be the only expert on and within an organization. Back when leaders stayed on for 20 years or more, this was possible — and common. The organization would go through a large transition, and a new leader could take 2-3 years to understand their role, build their own team and create a new vision for the future. How luxurious! But also limiting, suffocating and too much to expect of just one person. And it’s gotten us to the problems we’re now facing today.
Instead, let’s leverage everyone (and every tool) in our ecosystem to sustain the organization and allow the executive leader to be one (albeit critical) role, rather than shouldering the burden of the whole. Our sector requires that we do better by our leaders; together we can embrace change, evolve to meet dynamic needs, and build the sustainability critical to our future.