The next crisis: nonprofit leadership exodus

Nonprofit leaders are exhausted. Indeed, many were planning to leave their jobs even before 2020 happened. They include white boomers looking to retire, young leaders of color trying to navigate cultures not ready to accept them in positions of power, and the many in between ready to cry uncle because of the neverending uphill climb they face.

These are the people on the front lines of your mission, people whom philanthropy and society need. So, in addition to providing emergency COVID funding and supporting longer-term recovery efforts, you need to be thinking about what you can do to support the people leading this work so that they rise, stay, and thrive. Here are five ways — none of which involves money — taken from my new book Delusional Altruism: Why Philanthropists Fail to Achieve Change and What They Can Do to Transform Giving (Wiley, 2020).

1. Lead with an abundance mindset. The philanthropy sector generally leads with a scarcity mentality that hinders talent, stalls creativity, and hijacks opportunities to create systemic change. And it seeps into just about every aspect of philanthropic giving. A scarcity mentality leads to reports like the Nonprofit Finance Fund's 2018 State of the Nonprofit Sector Survey, which found a majority of responding organizations experiencing a rising demand for services, struggling to offer competitive pay to their employees, and citing "financial stability" as a "top challenge." With that kind of climate prevailing in 2018, how can we expect nonprofits to deal with the challenges dished out by 2020? Instead of expecting everyone to get by on a shoestring, nonprofits need funders who lead from a mindset of abundance. And that means focusing on relationships, talent, technology, capacity, and operations. It means offering unrestricted, multiyear funding. It means understanding that it's not just about spending money. Funders need to think big and foster cultures of generosity and mutual support.

2. Embrace inclusion. Solving entrenched social problems requires that we come together to identify common goals, include voices and solutions from and across a broad spectrum of perspectives, and do it with an abundance of empathy, trust, and tolerance. But we won't succeed if leaders of color feel underfunded, underrepresented, and undervalued. Carly Hare is the executive director of CHANGE Philanthropy, a coalition of philanthropic networks that challenges philanthropy to embrace and advance equity, support all communities, and ignite positive social change. As she says, "We need to remember that we are all entering conversations about inequities from different places on our life journeys. We need to allow people the grace to be themselves, be vulnerable, feel discomfort, and heal so that together we can have courageous conversations. If we don't do that, we stay in a delusional state. We stay ignorant." And effective and diverse leaders will continue to leave.

3. Build trusting relationships. As human beings, we rely on trust to guide us in new relationships and help us see things through when the going gets tough. That mutual willingness to see things through is both the reason to establish trust and the reward for doing so. But before you get there, you'll need to do what you can to eliminate the pernicious influence of unequal power dynamics. Even if you aren't aware of their existence, you can bet your grantees are. Donors get to choose which causes they support, whom they fund, and what they expect to happen as those funds are spent. Getting beyond those dynamics takes time and a willingness to be open, vulnerable, and willing to admit mistakes. There's a kind of intimacy that comes from admitting weaknesses or failures to others, and a type of honesty that emerges when funders and grantees explore those weaknesses and failures in ways that allow them to learn and change together. Establishing more effective partnerships with grantees also will put you in an excellent position to tackle another insidious and far too common power dynamic: abusive board members. An article by Joan Garry published last year in the Chronicle of Philanthropy details how this dynamic harms people and the nonprofit sector more broadly.

4. Invest in talent and racial equity at the same time. A donor once told me she would not allow grant dollars to pay for her grantees' personnel costs. You read that right. She was willing to fund programs, but not the employees who run the programs. She would fund a tutoring program, but would not provide funding to pay for tutors. She would support policy advocacy, but her grant dollars could not be spent on the advocates working to advance policy. She's not alone. Only about 1 percent of foundation dollars are allocated to nonprofit talent and leadership development. That puts way too much pressure on executive directors and leaves up-and-coming leaders in the organization unsupported. Equally important (and related) is the need to invest in the recruitment and advancement of people of color at every level. There are plenty of resources out there that can help you do that, including Fund the People's Talent Justice Report and Toolkit.

5. Leverage untapped resources. Start by checking out the Billionaire Census 2020 released by Wealth-X earlier this year. The report reveals that just over 10 percent of the world’s billionaires have donated or pledged support in response to the COVID-19 pandemic. That leaves about 90 percent that haven't! What if many of those billionaires want to do something but haven't been contacted by an organization with a clear call to action? Who better than well-connected philanthropies to effectively tap this group or their financial advisors? Sure, their net worth undoubtedly took a hit earlier in the year, but most of them have seen it recover, and, if nothing else, 2020 has given them a much clearer sense of their privilege and the many problems crying out for solutions.

Unfortunately, just when we need effective leadership the most, the exodus of nonprofit leaders is likely to accelerate. As NFF’s Bugg-Levine told the Wall Street Journal in the spring, "the system sets them up to be fragile." With over half of nonprofits not having more than three months of cash reserves on hand, Bugg-Levine fears that many aren't going to make it. That shouldn't come as a surprise. COVID-19 has made nonprofits' normal uphill climb that much steeper. But the solutions to the impending crisis are right in front of us. The pandemic has laid bare deep, systemic wrongs, as well as how things can be made right — including putting marginalized people and social justice at the center of everything we do. It is time to acknowledge the unequal power dynamics in our sector and change our cultures to address them. We must disrupt longstanding patterns and habits of scarcity. By changing, in fundamental ways, how the philanthropic sector operates, we can ensure that nonprofits don't just limp along in a state of near-failure, bleeding leaders as they go. By acting forcefully to address this crisis, we can position a new generation of leaders and the many critical organizations they lead to succeed and thrive.

Kris Putnam-Walkerly is a a sought-after philanthropy advisor and award-winning author. This article is reprinted here with permission and appears on the Putnam Consulting blog.