The need to invest in staff development, typically a low priority for the giving sector, is getting more attention as the troubled economy and competitive marketplace underscore the value of a nonprofit workforce prepared to handle big challenges and rapid change.
The turbulent times have compounded the demands on nonprofits, which also face a looming exodus of executive directors and senior staff because of burnout, stress, lackluster board support and the onset of Baby Boomer retirement.
People are “often the most important assets of these organizations,” says Linda Wood, senior director for leadership and grantmaking at the Evelyn and Walter Haas Jr. Fund in San Francisco. “And yet the nonprofit culture that we’re all a part of makes investing in people a secondary or tertiary concern.”
That mindset, however, is starting to give way to a new culture that values human capital and recognizes the need, even in a tough economy, to commit resources to building that capital.
Kathleen Enright, president and CEO of Grantmakers for Effective Organizations in Washington, D.C., says that while dollars for professional development “are often the first to be cut,” they represent “some of the most important dollars you can spend in the current economic climate.”
Learning to adapt
In the “new normal,” as many nonprofit leaders have dubbed the current environment, funding organizations and individual donors want nonprofits to be lean, nimble, focused, accountable and collaborative.
That climate requires that nonprofits perform at a high level raising money, delivering services, making a big impact, and measuring that impact.
And not only are nonprofit jobs expected to turn over at a high rate because of burnout and retirements, but people working or thinking about working for nonprofits increasingly are looking for jobs in which they can grow and put their actual skills and expertise to productive and creative use.
Nonprofits’ ability to perform at a high level, particularly in the troubled and changing economy, is directly tied to their investment in professional development, Enright says.
“As the world shifts around us, so too must our organizations, and those adjustments might require the adoption of new skills and new ways of working,” she says. “To help you and your people make that shift likely will require an investment in skills-building or retraining.”
While the business sector has invested heavily in “talent management, making jobs more meaningful, or processes for building professional pathways for your top performers,” Enright says, the nonprofit sector has failed to make that investment “in our most important resource – our people.”
Making the case
To persuade funders to invest in professional development, Enright says, nonprofits should offer a “well-thought-through plan that deploys professional-development skills-building and coaching in a way that helps the organization get to the next level of sophistication and ultimately improves their chances of making progress towards mission.”
The key, she says, is the “connectivity, drawing the line, between a complement of internal development activities, such as professional development or board support, and increasing the organization’s ability to succeed for the community it supports.”
To provide the additional administrative capacity it might need to equip itself for growth, for example, a nonprofit might seek funding to contract with a consultant to work with the organization on team-building and development of skills for facilitative or collective leadership, consensus-building or engagement, she says.
Or if a nonprofit recently has added staff to help it expand its networking and fundraising capacity, she says, it might seek funding for a retreat to integrate that new staff into its board culture.
The goal, she says, is to tie funding requests for professional development to keeping the organization “on the trajectory we’re on” and being able to serve more constituents with better services.
A grantmaker’s success “is completely dependent on the organizations it funds,” Enright says. “Foundations aren’t doing the work.”
And excellent programs, she says, “are only possible and sustainable if housed inside high-performing nonprofits that are populated by capable people.”
The nonprofit workforce is “highly motivated, incredibly capable, but asked every day to do very difficult work with few resources,” she says. “And we need to inoculate ourselves against the potential for turnover and burnout, which are two serious obstacles to performance.”
Grantmakers can build trust and improve their relationship with nonprofits by showing interest and caring for people “inside the organizations you support,” Enright says.
“The right kind of professional development, at the right moment, is the highest-leverage investment you can make,” she says.
Providing coaching support to a nonprofit executive facing “uncharted territory,” for example, “may help her make better decisions more quickly,” she says.
Or investing in a peer network or peer connectivity for a middle-manager looking for external resources to help solve internal problems, she says, “can really enhance his professionalism or expertise quite quickly.”
Investing in the future
While recent studies have projected the departure of two-thirds of nonprofit executive directors within five years, and the need for nonprofits to hire over 600,000 senior managers in the next decade, Wood says, research also has found less than one in three executive directors have talked about succession planning with their boards.
“There’s not a lot of attention being paid to it, and it’s a critical issue for the nonprofit sector,” she says.
The Haas Foundation believes it “cannot achieve the goals we have for social change in our communities without strong nonprofit leadership,” Wood says.
So while the foundation’s grants to support nonprofit programs are “more visible to the community,” its “silent, behind-the-scenes work in strengthening leadership has enormous leverage and is one of the most successful things we do to support our grantees,” she says.
Organized philanthropy can “begin to shift the culture by giving nonprofits permission to invest in themselves,” Wood says.
“People are facing more complex environments, constrained resources, they still have ambitious goals, they’re searching for more sustainable leadership models,” she says.
Most nonprofits find that “spending time and resources on this is luxury that they can’t afford,” she says. “The good news is that building this kind of talent doesn’t take as much money as people might think. Even relatively small investments can strengthen organizations.”