Inside the Executive Office: Trends that Challenge Nonprofit Leaders in 2017

Dec. 8, 2017

David Edell

I recently prepared for a seminar with the Strell Executive Leadership Fellows at the Hunter School of Social Work. The subject was “What are the Trends Affecting Non Profit Leaders in 2017.” Much has been written about the subject. As I re-read many of these articles, and interviewed nonprofit CEOs in a variety of service sectors, I settled upon eight major trends, some old and others new, but all presenting new challenges to CEOs, Board leaders and organizations in our current changing environment. Here are the eight trends.

The Dangers of Leading Courageous Conversations

Former President Bush recently described our current environment saying “Too often, we judge other groups by their worst examples while judging ourselves by our best intentions, forgetting the image of God we should see in each other.”

CEOs report that this polarization in our communities is a significant new challenge. Decision makers and “influencers” often hold rigidly to their positions and discussions can be difficult. CEOs and leaders are required to develop skills in diplomacy and conflict mediation in order to guide decision makers toward consensus on policy, initiatives or advocacy for critical issues which affect operations and organization culture.

Leading courageous conversations requires much more forethought, strategy, preparation, advance work and time in this partisan environment. This is not a new challenge, but in today’s world, the “wrong” choice can make leaders much more vulnerable to public challenges by donors, board members and the media. Successfully managing through these obstacles depends largely upon the skills and courage of the CEO and Board leaders.

New Generations of Donors and Leaders

CEOs tell us that the new generations who are just appearing as donors, board members or community “influentials” present immediate challenges and opportunities.

They are people in their late 30’s, 40’s and 50’s and their attitudes about community, leadership, philanthropy, career and volunteering are significantly different from the generations that immediately preceded them. Many are influenced by their career paths. They are typically more entrepreneurial, having started or built new businesses in technology, finance or real estate. In their work, they are more likely to be leaders and deciders and are most comfortable with a fast pace of decision making and action.

In volunteer organizations, they are more interested in results and impact than process. They are often more willing to take on projects and special assignments than to serve on boards. When they assume leadership positions, their style and availability and perception of the role is often very different from previous leaders. Therefore, CEOs and leaders must deal with new tensions as organizational culture and procedures change. Gaps have developed between long time leaders and the new generation that seeks to mold an organization to a new style that will attract their peers.

Technology

Keeping pace with the rapid changes in technology is a universal challenge. CEOs and staff must know enough to be able to assess how best to incorporate new technology in operations, communications and fundraising. They tell us that this can be especially complicated when volunteer leaders, who work in better resourced, more tech savvy companies want to see those technologies and related efficiencies in the nonprofit organizations that they support.

Funding

Much is already written about the challenges that nonprofits face regarding funding. Federal, state and local government funding for programs and services is unpredictable. Competition for private philanthropy and the resulting donor fatigue is significant.

The renewed discussions about “overhead” and the need for undesignated funds for administration and program delivery is an important challenge for CEOs, especially in an environment where funders prefer to fund designated programs with reduced allocations for administration and execution.

Communications

Social media has broadened the range of “influencers” in our communities. Anyone can post information and/or opinions which can spread throughout a community in minutes. These postings regularly require time consuming efforts to clarify or correct widely distributed comments. CEOs tell us that the need for timely responses to the volume of postings and comments that can affect an organization’s image, are new challenges requiring time, strategies and resources.

New media requires new skills in storytelling and messaging in the age of, Twitter, Instagram and Snapchat.

New media also has an impact on how CEOs communicate with those with whom they must build and steward relationships. Email is an easy default for communicating with staff, board members and major donors but it is not a substitute for the human contact required to nurture relationships. There is a challenge in balancing media communication and human connections in managing a CEO’s time.

Data

New technologies make access to huge amounts of data much easier. Funders, donors and board members are demanding a review and analysis of data that measures impact when making policy and funding decisions. Using data is not new for most nonprofits, but the increase in access, volume, technology and the demand for data-measured performance metrics challenges CEOs and program staff to be significantly more engaged with data gathering and analysis than in years past.

The Future of OrganizationsOld and New

Established (legacy) organizations are constantly challenged to “reinvent” themselves and build sustainable business models to survive. Mergers, strategic alliances and shared resources are all issues that are part of many organization’s strategic considerations.

Nonprofit startups and innovators are creating new models of programs and services throughout the sector. They too struggle with “phase 2” funding and growing to scale. They are challenged to find ways to influence change in their fields while maintaining their independence and creativity.

Most CEOs of established and new nonprofits are challenged with finding models that are relevant in this rapidly changing environment.

Changing Expectations of CEOs

New generations of donors and leaders have different expectations of and relationships with their professional leaders. They expect a more corporate style of analyzing problems and providing options for consideration. They expect to be provided data that backs up potential solutions. They expect to be prepared to consider solutions but not necessarily to participate in developing them. They develop warm and respectful relationships with professional leaders but are dispassionate in their evaluation of performance and results.

These new models of volunteer leadership have forced nonprofit CEOs to learn new skills and styles of leading. Executive education programs for emerging leaders in nonprofits focus more on the business of delivering services as well as the emotional intelligence required to bridge this generational divide. We have also noted that these new expectations have driven search committees to consider new profiles of CEOs when hiring.

One result of these changes is that job security and professional turnover have become more serious concerns among executives throughout the nonprofit sector. Those concerns can affect how they chose to take risk and to lead.

I believe that each of these trends and challenges are significant and merit more thinking and conversation. I will look forward to your comments. I hope that candid sharing of experiences and approaches by both volunteer and professional leaders, hopefully with each other, will lead to new models that will advance the sector in 2018.