The Philanthropy Roundtable and our members have greatly benefited from Bridgespan’s reports on the nonprofit leadership deficit. An important implication of these reports for funders is that one of the best ways a foundation or donor can strengthen a favorite grantee is to enable the grantee to hire the key executive leaders (e.g., chief operating officer (COO), chief financial officer (CFO), chief technology officer (CTO)) that will be necessary for the organization to grow. This is especially important in a recession year, when nonprofits have an excellent opportunity to invest in internal systems that will put them in a position to grow rapidly when the economy picks up again. Frequently this investment in systems will require hiring executive talent with operating and functional skills and experience.
One significant finding in the most recent Bridgespan report is that “the inability to offer the level of compensation necessary to attract the right person” is the single biggest obstacle to finding suitable nonprofit leaders. In their efforts to guard against abuse within the charitable sector, it is important that Congress, state legislatures, and the IRS not interfere with the ability of nonprofits to attract and retain executives who can deliver superior performance and growth.