Financial Management

How education can combat challenges faced by nonprofits

The success of any organization can be found in how strong the top-level leadership is. Companies that have solid growth and profitability can typically traced these markers back to the individuals appointed to lead it in that direction. Nowhere is leadership more valuable than in the nonprofit sector.

The goal of any charity is to raise money in the support of worthwhile causes. Many nonprofits have adopted technology such as donor management software to help accomplish this goal, but there are other behind the scenes factors that contribute to effective fundraising techniques as well. For example, there are a number of charitable organizations faced with the common challenge of retaining individuals appointed as development directors.

A joint study conducted by the Evelyn and Walter Haas, Jr. Fund and CompassPoint, a nonprofit consulting firm, revealed that many charities are experiencing vacancies at the development director level for an average of six months. For some nonprofits, there are even longer openings for the position as stated by 46 percent of those participating in the survey, with 16 percent acknowledging they’ve been operating without a development director for more than two years.

There seems to be a correlation between the operating budget of the nonprofit and the length of time that the position goes unfilled. Generally speaking, charitable organizations with budgets at or under $1 million have a harder time filling the role when compared to those with budgets of $5 million or more.

Other development director challenges faced by nonprofits
Another common dilemma faced by charitable organizations as it relates to development directors is the fact that many don’t anticipate sticking around longer than two years. The CompassPoint study revealed that 50 percent of those in that position don’t expect to hold it longer than 24 months and in some cases, even less. Once again, there is a correlation between this issue and the nonprofits operating budget. Typically, the smaller the charity, the more likely it is to experience a higher level of turnover.

An additional challenging aspect can be found in the fact that those holding the development director position aren’t fully committed to it, with 40 percent of respondents stating that they were unsure if they wanted to be in that role throughout the remainder of their careers.

Although this data can be sobering for many nonprofit executive directors, they can draw comfort in the fact that increased efforts are being made to groom people for leadership roles that will strengthen charities going forward.

Nonprofit leadership programs benefit charities
Because of the known leadership challenges in the nonprofit sectors, many colleges and universities are addressing it through the development of nonprofit leadership courses. According to a 3BL Media report, Northwestern University’s Kellogg Center for Nonprofit Management and the Allstate Foundation have joined forces to create the “Greater Good” program designed to prepare the next generation of nonprofit leaders in a year-long development course.

The curriculum will be taught by 16 individuals considered to be leaders in the nonprofit management sector and students participating will be instructed on the finer points of communication, the use of technology – such as donor management software – and effective fundraising tactics.

The Greater Good program is just one of many that are popping up around the country. However, it is a worthwhile venture to address the many challenges faced by nonprofits. Charitable organizations serve a valuable purpose and positively impact the lives of many people. Ensuring their viability by improving the leadership strength of those designated to lead them is a valuable undertaking that should benefit the sector as a whole.