Overcoming New Nonprofit Challenges through Leadership Investment

Ava Kuhlen

Change is all around us — from climate to communities — creating a world of increasing uncertainty and turbulence. Nonprofit organizations are particularly vulnerable to these changing conditions, yet their work is needed more than ever. How can philanthropy help nonprofits build the strength they will need in these changing times?

At the Taproot Foundation, we believe that our greatest challenges can only be solved by our strongest organizations. We work to harness human capital, through pro bono service, to solve social sector needs. We know that leadership is a crucial element of a nonprofit’s success, but is often an overlooked investment.

There are two distinct ways our changing world is creating new challenges at nonprofits — and an investment in leadership may just be philanthropy’s most strategic response to both.

1. A purposeful investment in leadership can help nonprofits more successfully manage growth and transition challenges.

The Changing Context: Economic and political changes are creating funding uncertainty at many nonprofits, while simultaneously increasing the need for services among those they serve. For example, The Giving Code, a report on Silicon Valley nonprofits and philanthropy published last year, found that 80 percent of community-based organizations responding to a survey reported an increase in the demand for services over the last five years.

The Changing Need among Nonprofits: The combination of increased funding uncertainty and increased need for services is forcing many nonprofits to reevaluate their own efficiency and effectiveness. In doing so, some nonprofits find that they must grow and/or expand current offerings in order to meet the increasing need. Others realize that they must transition or adapt existing services in order to continue serving their communities well and within their budgets.

For example, grantees may be grappling with how to expand their services nationally or increase the sheer amount of services provided. Similarly, grantees may be struggling with how to increase staff size or assess staffing needs across new geographic locations. They may be transitioning current leaders while also trying to onboard those who will take the organization into its next phase.

How Philanthropy Can Help: An investment in leadership can help nonprofits as they transform to their future state.  A leadership investment can empower nonprofits to:

  • Envision the future leadership structure needed for success. Funders can help grantees identify and better plan for the leadership they need to succeed. For example, this could mean providing support to help them restructure their board, design a new management structure, and draft job descriptions, or providing coaching to enable nimble and distributed leadership.
  • Build leaders’ ability to effectively manage change. Funders can support grantees as they lead their organizations through moments of change. This could mean providing support to coach leaders on change management and direction setting. It could also mean equipping leaders to plan for change through the development of transition or succession plans.
  • Grow leaders’ proficiencies to enact the change. Funders can bolster grantees’ ability to better plan for, communicate, and execute on their growth. This could mean providing support to develop and align staff and board behind a long-term strategic plan, or strengthening leaders’ proficiency in fundraising, communications, or marketing.

2. A purposeful investment in leadership can help nonprofits create equitable practices and inclusive cultures.

The Changing Context: There is a growing need for inclusivity, equity, and diversity in our communities and workplaces. Whether to promote justice, drive innovation, or increase productivity, the value of diversity is undisputable. But, like all sectors, the social sector struggles with developing the personnel and building the organizational cultures that allow inclusivity to thrive.

The Changing Need among Nonprofits: For nonprofits who typically spend less than 10 percent on overhead costs, leadership development and diversity and inclusion programs are virtually nonexistent. Without the ability to secure and develop staff, the sector faces a leadership deficit and loss of top talent. More starkly, however, the sector faces a racial gap in leadership, and the number of people of color in power at nonprofits has remained stagnant for the last 15 years.

Further, this racial gap extends to the highest level of governance: board members. As BoardSource explains, this racial homogeneity results in “blind spots” for an organization, resulting in programs and plans that “ineffectively address societal challenges and inequities, or even reinforce them.”

While many nonprofits understand the importance of diversity and inclusion, many also struggle to create strategies for promoting equity among leadership or building cultures that actually promote and value difference.

How Philanthropy Can Help: A purposeful investment in leadership can help nonprofits create a more equitable strategy, structure, and culture in a few ways.  A leadership investment can empower nonprofits to:

  • Develop the competencies leaders need to create cultures of inclusivity. Funders can help grantees develop the leadership skillsets needed to promote and value difference at their organizations. This could mean engaging leaders in training and activities, like pro bono service, that encourage leaders to practice competencies such as fostering a sense of connection and belonging, or incorporating diverse viewpoints.
  • Create leadership equity by focusing on first-time leaders or underrepresented populations. Funders can help grantees build strategies and action plans for populations previously overlooked for leadership roles. This could mean drafting individual career and development plans for emerging leaders or providing new executive trainings on management skills like communication, delegation, or time management to first-time leaders.
  • Build leadership diversity at the organization. Funders can support grantees to increase diversity across their board, leadership, and staff. This could mean designing strategic plans with a racial equity focus or redesigning board outreach and recruitment strategies.

Philanthropy is capable of helping provide the space for nonprofits to more holistically evaluate their leadership development needs. Once leadership needs are identified, these organizations will be better positioned to ask for, secure, and manage resources, like pro bono service, that can help them overcome these challenges. Investing in leadership means creating the resilience and adaptability nonprofits need today and in the future. 

Ava Kuhlen is director of external relations at Taproot Foundation, which connects nonprofits and social change organizations with passionate, skilled volunteers who share their expertise through pro bono service. Follow Taproot on Twitter at @Taprootfound.

capacity building, diversity, diversity equity and inclusion, leadership, Nonprofit Challenges, nonprofits
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