Wanted: nonprofit leaders

Charities seek to deliver results – and fill top jobs.

Beth Millas has a clear sense of direction, though she's been out of college only a year.

"I definitely aspire to be in senior leadership in a nonprofit organization," says the young professional at Points of Light & Hands On Network in Washington. Her aim: to help build charities' capacity for "effective societal change."

Ms. Millas is well on her way thanks to nonprofit management training during her college years in Missouri. After internships at United Way, Harvester (the biggest food bank in Kansas City), and as a fundraiser for the YMCA, she took her first job in Washington in June 2006. Recently, she was promoted to director of corporate relations for the country's largest volunteer network.

Millas joins the nonprofit world at an exciting but particularly challenging time – and as the need for leaders is soaring.

US nonprofits have tripled in number over the last two decades, and with government scaling back, they are expected to do more of society's heavy lifting – whether in social services, education, or healthcare.

While a new generation of philanthropists is eyeing places to put its wealth, the demands are increasing on nonprofits for greater accountability and effectiveness.

Yet as the sector grapples with how to meet those demands, it faces perhaps its greatest challenge: an acute leadership shortage. According to a study by the Bridgespan Group, nonprofit organizations will need some 640,000 new senior leaders over the next 10 years. That's 2.4 times today's number. (Depending on scenarios, the study says, that need could drop to 330,000 or rise to 1.2 million.)

Large nonprofits are growing faster than small ones, and as organizations grow, the need for strong management teams increases. But "burnout" is a problem, and large numbers in the boomer generation are on the verge of retiring.

"Nothing is more important than outstanding people ... and this is probably the most important issue in growing the size and impact of nonprofits in this country," says Tom Tierney, chairman of Bridgespan, a management consulting firm for nonprofits based in Boston.

If the leadership gap isn't filled by quality staff, he adds, then nonprofits will underperform, and "government funding and private philanthropy won't yield the return. That will be a problem not just for the organizations but for society."

One answer involves recruiting from a broader pool of talent. That means not only creating more up-and-coming leaders like Millas, but seeking out talented people looking for a second career – whether it be mid-career switchers or baby boomers hankering for a new challenge rather than retirement. These leaders could come from the public or for-profit sectors, or from other parts of the nonprofit world.

One prominent example is Brig. Gen. Michael Mulqueen, who left the US Marine Corps to become the highly effective leader of the Greater Chicago Food Depository, where he not only improved hunger-relief services but started innovative employment programs for clients.

Jesse Wolff, a corporate finance officer in Denver, decided to make the switch about four years ago. He has since led the revitalization of Community Shares of Colorado, a coalition that raises funds for 115 nonprofits in the state.

"I was getting a lot of excitement from my volunteer work in the community, but my [corporate] job was taking me out of that realm," Mr. Wolff says. So he sought out the nonprofit CEO job, and found the experience "life-changing – I'll never go back."

Just recently he was named to head the Kempe Foundation for the Prevention and Treatment of Child Abuse and Neglect. Wolff is making this latest move so he can work directly on a single critical issue.

It's harder to run a nonprofit than a private company, says Mr. Tierney, who was chief executive of Bain & Company in Boston before founding Bridgespan. Heading a large service organization, for instance, demands constant fundraising, and strategies for social change are much more complicated.

"You don't have the resources you are used to, you have the extra layer of a board of directors ... and you're wearing a lot of different hats – I enjoy that, but it's where a lot of burnout happens," Wolff explains.

But it also brings rewards – work that offers more meaning and an opportunity to make a difference for others. Surveys show thousands of Americans are pining for jobs with more meaning and often want second careers to fulfill that desire. The 2005 "New Face of Work" survey found half of all adults between ages 50 and 70 want jobs that help improve the quality of life in their communities.

"There's a pool rich in experience, education, and talent" to draw on, says Marc Freedman, founder of Civic Ventures and author of "Encore: Finding Work that Matters in the Second Half of Life."

Unlike the business world, though, entry points and internal career paths are far from clear. And nonprofits haven't looked to older people to fill leadership posts, he says. "When I see people trying to make this transition, they remind me of folks who used to build TVs from Heathkits: You have to put it together by yourself!"

In the for-profit sector, from 10 to 15 percent of GDP involves business-to-business services – including executive search firms, says Tierney. That kind of infrastructure still has to be built for nonprofits. Only the largest charities can afford executive search services, with most jobs hired through personal networks.

Leaders developed on campus

Some in the nonprofit world are beginning to confront this need head on – either to bring more young people into the field or to aid experienced individuals in making the transition.

Millas's strong start, she says, is due to the program of American Humanics (AH), which she entered her sophomore year in college. AH is a national program offering nonprofit management certification that complements a bachelor's degree. Students complete a core-competency curriculum and at least 300 hours of intensive internships.

Now on 70 campuses across the US, the program has recently averaged "300 to 400 students a year," says Stephen Bauer, head of AH's Initiative for Nonprofit Careers. "But in the scope of jobs needed, it's a drop in the bucket." The goal is to have the program in every state and major metropolitan area.

To deal with broader workforce issues, AH formed a nonprofit sector workforce coalition. Sixty groups are working together on a campaign to promote nonprofit careers and reduce recruitment and retention barriers faced by professionals of color.

Other organizations have begun helping charities and the talent they need find one another. For instance, Idealist.org, a website of Action Without Borders, posts job opportunities in nonprofits in 180 countries. The Chronicle of Philanthropy offers a "regeneration" section on its website about nonprofits seeking talent in the older population.

And Bridgespan has created an initiative – Bridgestar – specifically to help organizations build leadership teams and aid individuals in bridging into nonprofit careers (www.bridgestar.org).

The 'encore society'

According to Mr. Freedman, a few foundations are making "a significant investment in preparing the nonprofit sector to recruit people in the second half of life." But he says what's needed is a transformation in societal perceptions and policies away from the "golden years" of retirement to what people today really want – an "encore society."

"Right now, if you're 60 years old, it's still much easier to sell a lawn mower at Home Depot or coffee at Starbucks" than it is to play a meaningful role in public schools or nonprofits, he says. In his book, Freedman proposes a range of innovations to enable society to take full advantage of the resources of a vital "encore" population.

With the growing nonprofit sector in the throes of change, many see some consolidation ahead. (Millas just went through the merger last month of Points of Light Foundation and the Hands On Network.) They are also optimistic about significant opportunities and abundant talent – if the two can just be brought together.

"This is a thriving, vibrant, entrepreneurial part of our economy – and a lot of people have a lot of passion," Wolff says.

The test will come in how creatively the sector of 1.4 million organizations responds to the leadership challenge.

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