November 27, 2017

Rusty Stahl, president and chief executive officer, Fund the People

Since 2013, I’ve been traveling the country speaking with funders and nonprofits about why they should invest in nonprofit workers.

One of the questions both grantmakers and nonprofit executives ask me is “What if I invest in them, and then they leave the organization?” The implication is that when staff leave, any investments made in them was a waste. This question reveals a self-centered view of other people. It implies a myopic, short-term approach to employment. And it reflects the narrow incentive structures within which many grantmakers and nonprofit executives operate. We must challenge the underlying assumptions and approaches revealed by this question.

People leave organizations for a variety of reasons. Many times it is actually healthy for the person and organization. Often, there is no place to move up in small and medium-sized organizations because long-serving executives have not retired as was predicted more than a decade ago. According to research by Frances Kunreuther and her colleagues, this is in part because they did not invest in their own financial futures. This lack of fluidity at the top creates bottlenecks in our leadership pathways. In a logical response, nonprofit professionals move among organizations to gain experience and move up. Rather than ending the starvation cycle, executive directors impose under-investment on those who work for them.

People Probably Want to Stay

The reality is that most nonprofit professionals are enthusiastic to gain new skills, knowledge, networks, and support systems that will enable them to do their best work. The work is, after all, the reason they are there in the first place. (Breaking news: most people do not join the nonprofit workforce to become rich and famous.) So, when organizations or funders invest in nonprofit professionals, they are likely to gain huge returns in loyalty, productivity, and length of staff tenure.

Turnover Can Be Healthy

There are two different types of turnover: negative and positive. Negative turnover is unhealthy tumult that stems from terminations, resignations, burnout, and frustration. Positive turnover is a healthy process of completing an arc of work and feeling prepared and excited to extend mission-related work in new environs through new roles. Negative turnover often yields angry ex-employees; positive turnover produces appreciative staff alumni.

A Win, Not a Loss

When you invest in someone and they leave, it can be a loss to the organization. But it can also be a huge win for the organization and the larger cause.

When nonprofits build their talent-investing muscles, they are able to continuously invest in all staff, which means people will continuously grow and contribute more to the work of the organization.When they do leave, happy staff alumni are more likely to give back to or partner with the organization from their positions in government, foundations, or colleague nonprofits. In the long-run, the organization can earn the status of a great place to work. Such reputational capital is a massive strategic advantage over organizations that do not invest in their staff, and will enable the organization to recruit, retain, and advance more and more amazing talent.

[bctt tweet=”When #nonprofits build their talent-investing muscles, they are able to continuously invest in all staff, which means people will continuously grow and contribute more to the work of the organization.” username=”fundthepeople”]

A More Expansive View

When most people leave nonprofits – especially those who have been well-supported and developed – they are very likely to remain with the cause, continuing their mission work from a different perch.

A great example of this dynamic is the partnership between Blue Shield of California Foundation (BSCF) and the Center for the Health Professions (CHP) at the University of California, San Francisco. To help strengthen community health centers’ leadership and long-term effectiveness, BSCF partnered with CHP to deliver the Clinic Leadership Institute for Emerging Leaders. The 18-month program offers in-person, multi-day seminars and complementary supports—including peer networking, coaching, and an applied leadership project—to help prepare emerging leaders to assume executive-level positions within five to eight years. An evaluation of the program by consulting firm Informing Change (then BTW) examines results for five cohorts of diverse participants from health centers throughout California from 2008-2013. They find that this intensive level of investment led to incredible retention rates within organizations and the healthcare ecosystem. Fifty-six percent took on more job responsibility, with 46% of participants having moved into more senior roles within their organization. Of these, 49% gained “much greater satisfaction with their job.” Seventeen percent of participants moved to other health centers or health organizations, where most took on more senior-level roles.

At the end of the program, participants are overwhelmingly committed to working in the health centers field and generally report ambitious career goals; most strive to move into a more senior role and feel prepared to do so within five years. Despite these ambitions, some participants lack a clear idea of their career path, feel they may not have the resources and tools needed to drive their career, and are uncertain if they will have an opportunity to advance to a more senior role at their current organization. Aspirations and perceptions captured at the end of program do not appear to be associated with career outcomes with one notable exception: the intention to work in the health centers field. Almost all participants have delivered on their commitment to the field regardless of career path, with 94% of participants still in the field up to three years after graduation and most others (4%) working in the broader healthcare safety net. (Charting the Course: Career Paths Among Emerging Health Center Leaders, by BTW Informing Change with Blue Shield of California Foundation, July 2013)

As a result, the evaluators recommend that similar talent-investments focus on the retention of trained leaders in their organizations, and also encourage a more expansive view of clinic leadership that recognizes the mobility of emerging leaders as an asset to the larger clinics field and healthcare safety net. (Author’s note: italics added for emphasis)

The more expansive view calls upon the enlightened self-interest of funders and nonprofit leaders, and offers an alternative to the narrow approach that seems to be the norm. This more generous approach looks at today’s employees as part of an extensive workforce operating in a wider ecosystem. People are the bedrock of organizational capacity, but people are not owned by their organizations. As Reid Hoffman, founder of LinkedIn, writes in his book, people are moving between jobs at a faster rate in this age. Nonprofits (and their funders) would be wise to acknowledge this reality and forge a new social contract and new practices with their employees.

If your organization is relatively flat, and/or the top executives are not leaving anytime soon, how can you satisfy the interest in development and advancement? Talk regularly with staff about their developmental and career goals, and help to craft professional development plans and work plans that move them toward their goals. Help them gain the skills they need to give the organization their best service, and also to gain marketable skills so that they contribute more in the wider field when their tenure naturally comes to a close.

The Questions We Should Ask

Leaders should ask themselves: “What if I don’t invest in them, and then they stay?” In a sector where professional development is currency, staffs are managing increasing demands with diminishing access to skills and support systems. No wonder burnout is prevalent in our field. By not investing in our people, we diminish the value they are able to contribute to the organization. And, frankly, we reveal a lack of respect for our employees and ourselves.

[bctt tweet=”By not investing in our people, we diminish the value they are able to contribute to the organization. And, frankly, we reveal a lack of respect for our employees and ourselves.” username=”fundthepeople”]

There is an emerging body of evidence showing significant benefits to investing in nonprofit staff. In our new Fund the People Toolkit, which launched in September, we lay out the top reasons to invest in nonprofit talent. Research shows that significant and sustained investments in employees can increase the performance, impact, and sustainability at the individual, organizational, and field levels. In addition, if done with intention, talent-investments can expand racial equity and other forms of inclusion in nonprofits. We can and must ensure more pathways for people from historically marginalized groups to access jobs and grow in their leadership and careers as part of our talent-investments.

This leads to another question that leaders should ask – and then answer – “How can we invest so that everyone contributes their best work in their present role, and far into the future?”


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