September 3, 2019

By Rusty Stahl.

There is a vast chasm between the perspectives of foundation and nonprofit leaders when it comes to the state of investing in the people who make up grantee organizations.

The Center for Effective Philanthropy’s Strengthening Grantees study compares how foundation and nonprofit leaders rate the need to strengthen various organizational capacity functions, such as governance, fundraising, and communications, at nonprofit organizations.

“Leadership” is among the six areas of grantee organizations that most commonly need strengthening that were most commonly mentioned in foundation and nonprofit CEOs’ responses to CEP’s survey. However, “leadership” was only mentioned by 20 percent of nonprofit CEOs (sixth most), while it was mentioned by 31 percent of foundation leaders (fourth most).

In comparison to leadership, “staffing” is considered a high need among nonprofit CEOs, mentioned by 37 percent of nonprofit CEO respondents, second only to fundraising. Yet it does not appear at all among the top six issues most commonly mentioned by funders.

This lack of concern for staffing merits closer attention.

First, it’s important to distinguish the difference between leadership and staffing. Though it may initially sound like semantics, the real-world ramifications of how each are considered are deep and wide.

In my experience, many funders use the term “leadership” primarily to refer to those with positional power — primarily executive directors or CEOs (I use these terms interchangeably in this post), and secondarily others in the “C-suite” or on the board.

This means that funders often want to meet only with nonprofit CEOs when learning about organizations, negotiating grants, and maintaining relationships with grantees. Thus, nonprofit executives are positioned as heroic visionary leaders — the faces of fundraising, day-to-day managers, and chief dishwashers all at once. According to a survey by the Young Nonprofit Professionals Network, this overloaded job description makes emerging leaders in the nonprofit sector shy away from roles they view as unsustainable. If this pressure keeps up, it could seriously diminish the talent pool for future nonprofit executives.

Moreover, carrying all funder relationships on their own makes nonprofit CEOs hesitant to leave their organizations, even when they are burned out, ready for new challenges, or ready to retire. As Building Movement Project found in a study, baby boomer nonprofit executives fear their departures could destabilize funding for their organizations. This is one reason, the researchers posit, why the predicted mass retirement in the nonprofit sector has not yet happened. As executive transitions and retirements do happen, this fear is one major reason they are unplanned or poorly implemented.

Beyond creating challenges for nonprofit leaders, the practice of equating “leadership” with the CEO or ED helps to create or reinforce what I see as a major blind spot in the funding community: grantmakers do not see the contributions and needs of the rest of a nonprofit’s staff.

The fifth and sixth most commonly mentioned areas on funders’ list of what needs to be strengthened in grantees are “strategic planning” and “performance measurement” — what comes before and after action. While these areas are important, staff at nonprofits generally spend most of their lives between them, in the action of implementation. The funding community as a whole has spent at least the last decade obsessed with funding grantees to build strategies and measure results. But they’ve completely ignored staffing, which is the most significant and expensive variable for implementing plans in such a way that ensures results.

To shift this dynamic, I offer funders the following five recommendations for consideration:

  1. Understand the difference in perceived needs. Funders should work proactively to bridge any gap between their assumptions about the needs of grantee staff and the staff’s own perspective.
  2. Acknowledge the value of all grantee staff. The people who work at grantee organizations are part of a nonprofit workforce that is 12.3 million strong and comprises 10.2 percent of private employment in the U.S., according to Johns Hopkins University’s 2019 Nonprofit Employment Report. Beyond just its size, this workforce is a force for good — doing difficult and necessary work on behalf of foundations and government supporters, communities served, and the public good. When we look at nonprofits through the workforce lens rather than the leadership lens, we can see the value of every staff member, from incoming interns to outgoing executives.  Funders should build a dialogue and relationships with nonprofit staff across grantee organizations through site visits, one-on-one conversations, staff-wide surveys, and other vehicles.
  3. Ensure a robust talent pool. To strengthen and build the pool of future nonprofit executives, funders can invest now in “the least of these” — interns, volunteers, AmeriCorps members, line staff, and those in entry-level positions.
  4. See grantee organizations as a workplace. Funders can invest in grantees’ “people systems,” such as personnel policies and practices, livable wages and benefits, performance bonuses, an equitable and inclusive organizational culture, and professional development offerings aligned with organizational strategy. Strengthening these systems is beneficial to all current and future staff at an organization and can ensure that it is able to recruit great, diverse talent.
  5. Have the end in mind — but start at the beginning. Before focusing on measuring grantee outputs and outcomes, funders ought to measure grantee inputs. People are the most valuable — and most expensive — input there is for nonprofit organizations. It takes ongoing focus and investment to nurture a positive, powerful team that can drive results. This ought to be seen as a core part of what grantmakers do. 

Funders want to see grantees deliver stronger organizational performance; stronger measurable outcomes; stronger emerging leaders; stronger executive leaders; stronger executive transitions; and more equitable, diverse, and fair organizations. To get there, we need to understand both the value and the needs of all staff within and across grantee organizations. In short, to advance effective philanthropy, grantmakers must be as concerned with the entire grantee workforce as they are with grantee leadership. 

This post was originally published on the Center for Effective Philanthropy blog.

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