originally appeared as a Independent Sector article. www.independentsector.org,
Recent studies by CompassPoint
with the Meyer Foundation and the Annie E. Casey Foundation looked
carefully at the challenges of nonprofit executive leadership and
CEO turnover. Both found that more that half of the CEOs who responded
to their studies planned to leave their jobs within five years.
DRG's 2006 CEO survey found that 40 percent of nonprofit CEOs planned
to leave their position within two years. If you add those who will
have an "unplanned" departure for reasons of health or
performance, the number of potential transitions in the sector is
in DRG's survey, 58 percent responded that neither their board nor
executive team had discussed executive transition plans in the past
two years. We hope the findings
of these studies will change that. Our field needs to engage in
considerable conversation and planning about transition and executive
development in organizations and professional associations.
Equally disturbing were
the findings about executive development. 84 percent of the CEOs
responded that they consider themselves to be actively involved
with internal staff development. Yet only 34 percent reported that
their organization had any formal training programs for senior-level
As search consultants
who work exclusively with nonprofit boards on executive recruitment,
we constantly hear their concern that the sector has not adequately
prepared a next generation of nonprofit executive leaders. They
fear that the organizations that they have helped to build have
leadership challenges beyond the capabilities of "MSWs and
social workers." As they consider alternatives, boards ask
recruiters to find prospective candidates among business executives,
government officials, and other "celebrities" who might
be interested in a change in workplace and compensation. The board's
expectations of the CEO focus on the ability to raise funds, attract
influentials to the organization's leadership, public relations
savvy, and management skills. They seek executives with knowledge
of their field and management experience coupled with "polished
presentation and style"-often called charisma. Yet in the DRG
survey, most CEOs believe that their organization will ultimately
prefer to hire executives from nonprofits in the same field, other
nonprofit organizations, or internal candidates. That confirms our
experience that boards are interested in looking outside the field
but hire from within.
In short, we have learned
that that there will be considerable turnover at the executive level,
that plans for executive transition are not discussed in most organizations,
that nonprofit board members are concerned about where the next
generation of executives will come from and that most organizations
do not have executive training programs to prepare a next generation
In my writings, I have
encouraged nonprofit organizations to pay attention to the issues
of recruiting and retaining executive talent. The best near-term
solution for the imminent flurry of executive turnover is for organizations
to begin to build a corps of talent within their organization and
to provide opportunities for them have training and responsibilities
that prepare them for executive leadership. Organizations can serve
themselves and their fields well by "growing their own"
area, nonprofit organizations can learn from the private sector.
Retention activities are not focused solely on compensation, titles,
and recognition. Rather they describe programs that identify small
groups of talented executives with the potential for executive leadership.
That group is publicly recognized and executive development programs
for the group and its members are developed and tracked. The training
may include courses, graduate education and coaching. More important,
it must also give them assignments with responsibility in areas
unique to executive management. That means work with board and board
committees on program and policy development and strategic plans.
It also means assignments related to finance and fundraising with
major donors and foundations. We know that the ability to build
trust with board members and to raise adequate funds are the two
major measures that define nonprofit executives' success or failure
in the eyes of their board.
development programs must provide skill training, coaching, and
work experience in these areas to ensure a trained pool of prospective
leaders to fill the upcoming executive openings. We also
know that talented executives will stay with organizations that
recognize their abilities, invest in their growth, and show them
The message is clear.
Unless boards and CEOs begin addressing leadership transition right
away, they will find themselves scrambling and competing to recruit
talented senior executives and to deal with the disruptions that
these transitions can cause. With the growth of nonprofit management
education, there are many resources available to enhance these programs
and even funders interested in supporting executive development.
These studies have identified the problem and waved the warning
flag. There is concern about the issue. Now is a critical time for
organizations to act in ways that enhance the pool of talent to
lead the nonprofit sector in coming decades.