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The Nonprofit Leadership Development Deficit

December 7, 2015

The Nonprofit Leadership Development Deficit, a new study by The Bridgespan Group, tackles a major organizational concern for nonprofit boards and CEOs year after year-succession planning. According to the report, only 30 percent of C-suite roles in the nonprofit sector were filled by internal promotion in the past two years-about half the rate of for-profit companies.

Unfortunately, these alarming statistics are not surprising -- so the question becomes why does this issue continue to loom over the sector and what can we do about it? According to the study's authors:

  • Despite the many articles and numerous discussions about the need for organizations to develop their human capital, too many nonprofit CEOs and their boards continue to miss the answer to succession planning sitting right under their noses-the homegrown leader.

    Our new study surfaced what we call a leadership development deficit. The sector's C-suite leaders, frustrated at the lack of opportunities and mentoring, are not staying around long enough to move up. Even CEOs are exiting because their boards aren't supporting them and helping them to grow. This syndrome is coming at a significant financial and productivity cost to organizations, undermining their effectiveness and hampering their ability to address social and economic inequities.

    While a certain amount of turnover is to be expected, the fact that one in four of our 438 survey respondents said they plan to leave their roles within the next two years, and that the largest source of replacement talent comes from other nonprofits, creates a turnover treadmill. It exacerbates the succession planning problem at a time when the sector needs capable leaders more than ever.

Ranking second only to low compensation, half of the study's respondents cited lack of development and growth opportunities as a reason that leaders leave their organizations. Two main themes emerged regarding what was missing in their development-the first was a lack of learning and growth. Leaders feel like they must leave their organizations to move to the next level. Interestingly, this isn't just about being promoted -- many people reported wanting to expand their skills and broaden their experience within their current roles. Another reason cited was a lack of mentorship and support from their leaders.

The study found that too few organizations systematically develop and support promising leaders. More than half of respondents ranked their organizations lower than 6 out of 10 on their ability to develop their staff. Additionally, they stated that their organizations lacked the talent management processes required to develop staff, and that they had not made staff development a high priority.

In addition to raising awareness about this issue, we at American Express appreciate Bridgespan's call to action to engage the resources and skills of senior leaders, boards, corporate partners and funders to create effective and sustainable leadership development processes. As the report notes, "effective talent development calls for capacity investments in recruiting, training, and performance measurement, yet 58 percent of survey respondents had not received any funding earmarked for talent development in the past two years. Notably, only 1 percent of foundation funding goes to leadership development."

Since 2007, one of American Express' main community investment platforms has been Developing New Leaders for Tomorrow. Under this initiative, more than 16,000 social sector leaders worldwide have benefitted from American Express leadership programs, including the American Express Leadership Academy. While we will continue to invest in and expand our in-person leadership training programs, we know there is also a great opportunity to leverage technology and help bring leadership development to scale through world-class online curricula. In order to have a broader impact on the sector, we are excited to be the keystone funder and partner for several new online leadership development platforms:

  • A new online leadership development platform for social purpose leaders, Leaderosity can be tailored to each participant's preference and pace, and allows participants to work through leadership courses at their convenience. The courses also include peer to peer interaction, helping participants challenge themselves - and others - to become more adaptable and collaborative leaders. These interactions provide the opportunity to build lasting, local, national and international relationships through an interconnected community of like-minded network builders. Inaugural courses are offered by the Presidio Institute and the Nonprofit Leadership Alliance (NLA) with plans to build out additional courses next year.
  • +Acumen, Acumen's online learning platform and global learning community for social change leaders, has expanded to become the largest massive open online course provider in the social sector. Free and globally accessible to anyone with Internet access, +Acumen today provides nearly 20 free online courses on social change and has garnered more than 275,000 registrations from 170 countries.
  • A new storytelling platform to share the "leadership journeys" of social purpose leaders who are tackling some of society's most complex issues, brings together video storytelling, key resources and insights on leadership development from innovators and experts to inspire, inform and connect emerging leaders from all facets of the nonprofit sector.

We hope nonprofit leaders across the sector will take advantage of these online training opportunities and we invite other partners and funders to get behind this critical issue. Together, we can help ensure there are well-trained and effective leaders who can change the world today and tomorrow.

If you have a question or comment, follow me on Twitter at @timmcclimon and post it there. Thanks for reading and sharing my blog postings this year. CSR Now! will be on hiatus until January 4, 2016. Have a safe and happy holiday season!


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