We Baby Boomers are rapidly aging out of nonprofit leadership.
Meaning, there’s a huge impending leadership void in the sector that needs to be filled.
Also, nonprofit board members tend to skew older and are often quietly distrustful of youth and “inexperience.” And so the cycle continues.
Yet, in less than a decade, millennials will make up 75% of the workforce.
It would behoove your nonprofit to upgrade any outmoded staffing practices to facilitate the growth of the organization’s next generation of leaders—many of whom may already be in your organization.
Millennials care deeply about climate change because they are living through it. They care deeply about excessive tuition and awful lending practices in higher education, so eliminating student debt is high on their priorities list. They understand big tech, so their gifts in that area can help the nonprofit sector tremendously. And last, but certainly not least, millennials are deeply interested and involved in social movements for greater equality as regards race, income, and access to power. With these concerns in mind, is your organization attractive to the next generation?
The Reality
Shockingly, the average tenure of a fund development professional may be as low as 16 to 18 months as noted by a DickersonBakker Executive Search survey reported in the Chronicle of Philanthropy. Nonprofit executive directors and CEOs remain in their roles for an average of six years, but this tenure is expected to decline (Nonprofit Quarterly, Oct 13, 2021.)
When we consider the five greatest challenges in nonprofit management– money, membership recruitment and retention, staffing and volunteers, technology, and decision making – the impending leadership void affects each one.
Here’s what you can do to better plan for the next generation of fundraisers.
- Create (or update) your succession plan.
Most nonprofits don’t have leadership succession plans. Executives move on to other work opportunities, or their personal circumstances change unexpectedly, often at a crucial point in a fundraising program. Organizations need a solid leadership succession plan in order to prevent potential crises resulting from life’s curveballs, as well as the aging trends already noted. Here is a toolkit for how to develop your nonprofit’s succession plan.
Identifying and training your next generation of leaders helps prepare your organization for the future, allowing prospective leaders to develop key skills and become invested in your nonprofit for the long term. In creating a succession plan, you contribute to the longevity of your organization and the stability of the sector overall.
Speaking from 40 years of leadership experience, I can assure you that it’s expensive to lose talented staff, both in terms of hard and soft costs. Hard costs have to do with providing services and paying the bills. Soft costs are things like the organizational knowledge that walks out the door when a key staff person leaves. Having a succession plan gives you an opportunity to reduce turnover.
- Improve your hiring practices.
Due diligence of each candidate to verify the facts of their resume and experience is essential to making a good hire. Don’t rush to hire just for the sake of filling the position.
Determining before the search begins exactly what type of fundraiser you most need at this moment in time is especially important. One NPI Strategies client had a very entrepreneurial fundraising problem to solve (they needed to find and engage new donors), but the three top candidates under consideration were all general fundraisers with no particular experience in building a donor base. I implored them to reopen the search, but they said they couldn’t wait any longer. The person they hired did nothing to find new donors and left before the first year was out.
I like to have three solid candidates, all of whom could do the job with one of whom usually heads and shoulders above the others. Pay close attention though to making sure that the lead candidate is a “fit.” Search firms routinely use job-fit assessments and testing, behavioral interviews, and thorough background checks to determine if a candidate will fit the opportunity. Job skills can be learned, but there’s simply no substitute for a good fit.
While finding the right young candidate is important, remember that fundraising is a team sport. A development team is usually required to really advance performance. Be sure you have allocated the right budget for all the people needed to make your fundraising program soar.
- Pay staff a competitive wage, and include incentives for higher level performance.
The adage, “you get what you pay for” applies. A chief fundraiser worth having will require a competitive compensation package with a path toward achieving bonuses. The same is true for younger hires on their way up.
In “Donor Centered Leadership,” Penelope Burke states that, “Among survey respondents in every job category, ‘to obtain a higher salary’ was the top reason they left their last job (47%).” According to Burke, even though many said they were adequately or generously paid, it didn’t stop them from looking over the horizon to see what they could get somewhere else. Her advice: If you’re not offering competitive compensation, it’s a good idea to start moving in this direction. If you can’t pay what others are paying, then offer other benefits that make the working environment better. For example: offer flexible hours, cell phones and laptops the company pays for, the opportunity to work from home. Benefits that are meaningful to fundraising professionals, Burke says, are normally things that are related to time and timesaving.
Fundraisers generally strive to produce revenue returns between $3 and higher, so this is an area to invest in. Yet so many nonprofits fear that their fundraising costs will be too high if they pay competitive wages. Instead, they spend most of their revenue on client programs. Well-intentioned as that is, they are starving those very programs of future resources by prioritizing spending on programs versus investments in fundraising. A dollar spent on programs will only help you solve a dollar’s worth of problems. Whereas a dollar invested in fundraising typically produces between $3 and $10 in future returns. Further, a dollar invested in major gift fundraising produces, on average, $24 in lifetime value.
- Are your expectations aligned?
I’ve never liked the phrase, “let’s get on the same page.” Yet I like the spirit of what’s behind it, that we ought to have shared and aligned expectations before we proceed. Furthermore, this alignment should be reviewed quarterly to adjust for whatever market forces are at play, things like inflation, domestic unrest, and legislative reforms.
I encourage chief fundraisers to “manage up” and proactively schedule these quarterly reviews with the nonprofit’s executive team, especially with up-and-coming leaders. Expectations can be discussed at these reviews.
- Integrate fundraising throughout your entire nonprofit.
Fundraising doesn’t advance in isolation; instead, our work is built on relationships. Your relationships with donors and funders should not be dependent on one person. That is not sustainable, nor is it effective. Relationships between your organization and its donors should have multiple connecting points, beginning with the fundraising staff but extending to your CEO and executive management, your front-line workers, your Board members, and even to peer-to-peer relationships between donors. Your fundraisers also need to know how to communicate what you do and be able to show donors how their giving is making an impact. They can’t do that without collaboration with colleagues at all levels throughout the organization.
What else do you think should be done to prepare the next generation of fundraisers? Let us know in the comments below, and please share this post with a colleague who may find it helpful.
