The nonprofit sector now employs nearly 10 million people and accounts for over 7 percent of U.S. national income, according to a recent article in the Society for Nonprofit Organizations magazine, Nonprofit World. In the last decade, leaders have shifted to a more entrepreneurial mindset through marketing, revenue diversification, collaborative partnerships and improved technology.
This is only the tip of the iceberg. Looking at the job descriptions for not-for-profit executives and leaders, you would think they have to be superhuman to accomplish the rising expectations of their positions.
Being superhuman isn’t necessary, but not-for-profits will be impacted by efficiency measures and artificial intelligence just like any industry. They will continue to face staffing shortages and increased demand for their products and services locally and globally.
What do these leaders really need to manage the hidden depths of their role in evolving not-for-profit organizations? We can view their key competencies and traits through the lens of future challenges:
- Financial
- Competitive
- Operational
- Talent
- Trust
Financial Challenges
Fundraising and financial management skills have always been a top characteristic of strong not-for-profit leaders; however, these skills now go hand-in-hand with networking and collaborative partnerships.
By networking and building relationships with other NGOs, government agencies and community leaders, not-for-profit executives and program leaders can extend the reach of their budgets while making a greater coordinated impact for their missions.
Particularly with rapidly changing economic cycles and donor expectations, leaders will need to adapt budgets and offerings that match the realities of the market and their stakeholders.
Competitive Challenges
With so many competing not-for-profit products and services available, leaders will need to improve their skills in communication, use of technology and inclusive and equitable approaches to the mission.
Skills to meet competitive challenges may include storytelling, media relations and cultural sensitivity to local and global trends. There is a forward-thinking aspect to not-for-profit work that must also apply logistics and resources to present needs. Leaders will need adaptability to maintain equilibrium during competitive shifts.
Operational Challenges
Technology can support development efforts, but it also supports efficiency and productivity for smaller teams. Leaders must pay attention to budgeting for regular accounting, project management and database updates. Strong strategic planning skills and visioning work are necessary to operate well today and anticipate operational enhancements tomorrow.
Operational challenges also include a response to and planning for environmental and climate changes. Whether that includes water and energy use, facility planning or end user impacts, leaders will need to identify how the organization can participate in solutions.
Talent Challenges
Not-for-profits are not immune to staffing shortages. Through retirements and a smaller labor pool, not-for-profits face an enormous turnover in leadership. According to the Building Movement Project, up to 75% of U.S. nonprofit leaders will leave their positions in the next five to 10 years.
One bright spot is that many older leaders plan to continue meaningful work into their 70s or 80s. Current not-for-profit leaders can harness this experienced workforce through advocacy, team building and discussion of hybrid and remote work options for paid staff and volunteers.
Trust Challenges
The need for authentic missions and transparent results is more important than ever. Not-for-profit leaders are at the forefront of this communication. Honing their skills in measurement and analytics as well as marketing and active community listening can help leaders to accurately frame the positive impact and realities of their organization.
Self-care and self-management are also key traits. Overworked leaders are not equipped to represent their organizations well. Showing vulnerability through proactive health and wellness practices will create a positive model for everyone in the organization.
LvHJ can help not-for-profit leaders manage their responsibilities. Talk to us about our CAS+ and advisory services.
