Nonprofit Organizations Have a Leadership Crisis

According to a recent survey of nearly 1,200 nonprofit leaders, the Concord Leadership Group found that only 20% of nonprofit executives said they were very confident that they had the leadership abilities to enable their team and their nonprofit to achieve its goals.

Additionally, The Stanford Survey on Leadership and Management in the Nonprofit Sector found the following were among some of the most common challenges for nonprofits:

56 percent struggle with weak board governance;
52 percent struggle with fundraising;
Half struggle with impact evaluation;
52 percent are not ready to scale their impact because they exhibit “weakness in strategic thinking,” such as, mission, strategy, impact evaluation, or insight and courage;” and,
27 percent exhibit “weakness in strategic management,” such as, organization and talent, funding, or board governance, despite exhibiting strong strategic thinking.

Research by Meehan and Jonker on high-performance nonprofits suggest some essential components of strategic leadership:

Organization and Talent – a superb team to build and sustain high performance;
Funding – an ability to build strategic revenue channels and to tap the right donors; and,
Board Governance – a strong, effective board of directors.

I have worked for more than 26 years in the nonprofit sector, as a nonprofit executive at two nonprofit organizations and now as a consultant to several educational nonprofit organizations. I have found that good leaders must have the following qualities to successfully lead their organization:

1. Financial Management: The nonprofit leader understands the importance of being cost effective in the use of contributions, understands and is capable of analyzing financial statements, values the necessity of an annual external audit and understands all IRS requirements including completing and submitting a timely 990 reporting form.

2. Board Governance: The nonprofit leader works with the board of directors to help them to be successful in three broad areas:

Delivery of the organization’s mission.
Fiduciary, which includes financial oversight and fundraising.
Senior staff seeks board guidance for successful management of the organization, expects the board of directors to evaluate their performance and works with the board to determine appropriate compensation based on annual salary compensation reports.

3. Leadership: I believe it’s the “soft skills” that make a great nonprofit leader. It’s a mindset. Brian Kight listed some principles that a leader should have: