March 1, 2005

What About the Market?

In this commentary on the 2005 Bridgespan Group report, "The Nonprofit Sector's Leadership Deficit," Jan Masaoka, executive director of CompassPoint Nonprofit Services, discusses how the market will likely help fill nonprofit leadership roles and notes that while doing so, the sector should also consider its racial and ethnic diversity in choosing its future nonprofit leaders.

A commentary on The Nonprofit Sector's Leadership Deficit

It's a great headline: 640,000 new nonprofit executives needed in the next 10 years! This article makes an important contribution through the exercise of making assumptions about nonprofit formation, growing management teams, and retirement rates, to draw a macro picture for us of the labor needs of the nonprofit sector. Those concerned with CPAs need to be concerned not just about how a particular firm attracts CPAs, they need also to look at compensation, accounting schools, and scholarships. In a parallel situation, too often nonprofit leaders and funders focus on the needs of one organization at a time, and as a result don't tackle interventions at the level of the sector.

At the same time, I couldn’t help but wonder, "What about the market?" Fifteen years ago, when there were similar cries in the accounting profession about a lack of CPAs in the pipeline, the invisible hand of the market showed itself. With more openings, more young people and immigrants entered the profession, older CPAs stayed longer, accountants who had left accounting returned to the field, and firms restructured their accounting departments. The market was aided by industry leaders who funded more scholarships, accounting clubs, and career days at colleges. But the market for talent responded, as it will for nonprofits—and it already is, as evidenced by more and more colleges with nonprofit degree programs, some consolidation and failures, and the retention of executives to older ages.

Tom does a terrific job of identifying the many streams through which the talent gap will be filled. And his recommendations for nonprofits and for the sector are sound and welcome. Just one area that goes overlooked is that of racial and ethnic diversity in tomorrow’s nonprofit leadership. Many studies, including CompassPoint’s Daring to Lead 2006, show that nonprofit executives continue to be largely white/Anglo. It is troubling that our sector, where so many civil rights movements have been nurtured, does not seem to be taking advantage of the talented and capable leaders of color who are ready to step into leadership.

This article is great example of the importance of bringing thought-provoking ideas to the table.

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