Developing and Retaining the Next Generation of Nonprofit Leaders
Strategy, capital, and talent build high impact organizations. But first among equals is talent. Nothing is more important than the leaders at the helm. They develop and adapt strategy, and they devise approaches to attract capital and put it to work in powerful ways. Despite its importance, leadership too often is overlooked as the most important ingredient in achieving results.
For 15 years, The Bridgespan Group has relentlessly researched ways to help organizations rise to the challenge of attracting, developing, and retaining first-rate leaders. The questions we pursued have produced insights that are having lasting impact on the sector, but there is much more to do.
"Nonprofits increasingly do the work required to fulfill our desire for a civil, compassionate, well-functioning society. Like most organizations, their ability to consistently deliver these results depends more on the quality of their people than on any other single variable."
Will there be enough leaders?
Ten years ago, when Bridgespan first projected a huge need for leaders in The Nonprofit Sector Leadership Deficit (Bridgespan's most frequently cited article), the research caught the attention of the nonprofit world. It put the sector on notice that demand likely would far outstrip high-quality supply over the years ahead. A follow-up report in 2009, Finding Leaders for America's Nonprofits, commissioned by the American Express Foundation, explored the nature and dimensions of the evolving deficit, and it offered guidance on cultivating a new generation of leaders. Concurrently, Bridgespan recognized the growing interest among for-profit executives—dubbed "bridgers"—in transitioning to the nonprofit world. To facilitate that shift, Bridgespan identified the most sought-after skills nonprofits were seeking in leaders, including cultural fit, and created a catalog of practical tools and advice that today remain the most downloaded content on our website.
"Until we as an organization—and the sector as a whole—become much more intentional about development of internal talent, we are doomed to an ever-growing leadership deficit."
How do we cultivate effective leaders?
Nonprofit leaders surveyed by Bridgespan identify leadership development and succession planning as their most glaring organizational weakness. To help organizations think differently about solutions, with generous support from the Omidyar Network, the David and Lucile Packard Foundation, and the Deerbrook Charitable Trust, we wrote a guide to systematic investment in building a pipeline of leaders within an organization: Nonprofit Leadership Development: What's Your 'Plan A' for Growing Future Leaders?.
Plan A provides a road map that helps organizations clarify their needs and it lays out the steps to develop and strengthen homegrown leaders. The book has been read by more than 11,000 nonprofit staff, and 80,000 people have used the practical development tools in the companion Nonprofit Leadership Development Toolkit.
"There are organizations that systematically develop and support promising leaders, but these are a rarity. In our survey, over 50% of respondents ranked their organizations less than 6 out of 10 on their ability to develop their staff. When asked why, their top two reasons were that they lacked the talent management processes required to develop staff and that they had not made it a sufficient priority within the organization."
How do we bolster the pipelines for leaders in the fields?
Talent development requires investments in recruiting, training, and performance measurement. Yet, in a recent Bridgespan survey, only one-third of nonprofit leaders said they believe their organizations are effective at developing a strong pipeline of future leaders. They place the blame, in part, on being resource strapped. And in fact, only about one percent of foundation funding has been earmarked for talent development over the past two decades.
But that is beginning to change. High-impact funders are taking a lead role in helping to cultivate strong leadership pipelines in targeted fields. To deepen our understanding of pipelines, Bridgespan recently helped a group of funders of Jewish nonprofits to take such a strategic approach, described in Leadership Pipelines Initiative: Cultivating the Next Generation of Leaders for Jewish Nonprofits. Building on the insights and frameworks developed during that research, we helped Ed Fuel produce a report on leadership pipelines in the education field called, "Hidden in Plain Sight: Tomorrow's Education Leaders already Work for You," and have commenced studying several other fields including workforce development and juvenile justice.
"Being a part of the home team for the long run prepares senior leaders to make courageous decisions that others will follow. That's in large part because they build trust and respect across constituents as they rise through the ranks, wisdom in the ways and means of their mission, and cultural savvy for getting difficult things done—internally and externally."
How do we retain leaders?
Today the social sector faces an additional challenge: a revolving door for talent. In our latest study, "The Nonprofit Leadership Development Deficit," we observed that a top concern expressed by boards and CEOs continues to be succession planning. Our research has indicated that over the past two years, one in four top leaders stepped down, and nearly as many plan to do so in the next two years. At the same time internal promotions filled only 30 percent of the vacant senior positions—about half the rate of the for-profit world. This dearth of internal promotions indicates that nonprofits are missing a major opportunity to address the succession planning issue: the homegrown leader. Developing leaders already on the payroll is an approach that any nonprofit, regardless of size, can pursue since it requires more of a commitment in time and effort than money.
Nothing is more important to an organization than its people and leadership. The social sector has been blessed with extraordinary talent that has managed to achieve amazing results. But the demands on social sector organizations are growing and the skills required to succeed are becoming more varied. Bridgespan remains committed to helping social sector organizations attract, develop, and retain outstanding talent.
"Recognizing the critical role leaders play in advancing social change, we have concluded that now is the time to develop new health-focused leadership programs that connect people across sectors as well as disciplines, capitalize on technology to promote networking and mentoring, and reach and help many more individuals. To achieve our vision, we need to produce even more well-prepared and well-connected scholars and leaders more efficiently."