The Challenge of Nonprofit Leadership: Navigating a Perilous Moment

Phil Buchanan

This post is adapted from remarks Phil Buchanan delivered to a gathering of nonprofit leaders at the Sanford Institute of Philanthropy at John F. Kennedy University’s 2019 Philanthropy Summit in Pleasant Hill, California on October 28, 2019.

I have spent the last six months talking mostly to donors about my book, Giving Done Right. But here, I want to address you, nonprofit leaders. And I want to start with some of the words I have heard said about you — about me, about us. Brace yourself.

“Nonprofit staff are overpaid.”

“Nonprofits are bloated.”

“Nonprofits are wasteful.”

“Nonprofits spend too much on overhead.”

“Nonprofit staff couldn’t make it in the ‘real world.’”

“Nonprofits don’t care about measuring effectiveness.”

“Nonprofits aren’t innovative enough.”

“Nonprofits are corrupt.”

Oh yeah, and this one, my favorite: “I have worked in business for the past couple of decades but am looking to slow down, give back, and have work-life balance, so I thought I’d explore nonprofit work.”

Has anyone heard any statements like these before?

Unfortunately, they are common. In the business press. In the mainstream media. On business school campuses. At some foundations. In the halls of corporate America. On the political right — and on the political left.

While it is surely true that we could find specific instances in which each of these statements rings true about a specific nonprofit, as generalizations every one is false.

And damaging.

And outrageous.

And maddening.

I seek to counteract these ridiculous and false statements in my book, in everything I do in my job at the Center for Effective Philanthropy (CEP), and in every interaction I have with donors. I seek to educate those donors who talk like this so that they stop talking and thinking this way. Because thinking this way leads to mistakes and missed opportunities in philanthropy.

Let me tell you about the nonprofits and nonprofit leaders I see — the amazing people I have spent time with and have written about. Perhaps you will see yourself in them.

Real Nonprofit Leaders

Let me tell you about Cathy Moore. She is the executive director of Epiphany Community Health Outreach Services, or ECHOS, in Houston, which was formed in 1999 to meet the needs of what she calls “poverty-stricken, vulnerable families” in the local neighborhood.

This means providing services from children’s immunizations, to blood pressure and glucose screenings, to child checkups, to vision and dental care. ECHOS staff help clients complete the paperwork to be eligible for a county healthcare program for the poor, or for food assistance and other benefits. ECHOS also helps with basic needs, providing food from its food pantry, English classes, computer literacy trainings, and a domestic violence support group. With nine staff members and a budget of $500,000, ECHOS struggles to meet the needs of all its prospective clients, many of whom are undocumented and essentially all of whom are desperate for help.

But to see the staff of ECHOS at work is to see effectiveness in action.

It’s an organization totally focused on executing its mission with excellence. I visited on a hot June day, the temperature already in the mid-eighties when I walked in at 7:15 a.m. The staff was already assembled and discussing their plans as a growing group of clients waited outside for ECHOS to open at 8:00.

I asked one man in his thirties who was coming in to get help renewing his eligibility for the country healthcare program what he would do otherwise. “Just go into debt for my medical expenses, I guess,” he told me.

Cathy, the executive director, does a little bit of everything in her role. “It’s very hard when you’re a very small organization and wearing every hat,” she told me. “It makes it hard to be good at fundraising. We have had no problems finding clients. Donors? Not so much.”

Sound familiar? Nonprofit leaders like Cathy are in every community, every neighborhood. She is extraordinary. But what’s amazing is that extraordinary people like her are all around us.

Let me tell you about Gregg Croteau. He runs UTEC, a nonprofit in the old mill town of Lowell, Massachusetts. A group of teen leaders formed UTEC in 1999 in response to rampant gang violence in the community. The organization hired Gregg in 2000 with a $40,000 grant from the city.

Today, UTEC, which aims to “nurture the ambition of proven-risk youth to trade violence and poverty for social and economic success,” is literally saving lives. UTEC, now with an $8 million budget, is nationally recognized and has been held up as a model by both the current and former governors of Massachusetts. The organization serves 800 to 900 young people each year, working intensively with about 160 to get them out of criminal activity and into a productive job.

Any given day finds Croteau and UTEC’s “street workers” sitting at a bedside in a hospital after a shooting, visiting a gang member in prison, or attending a funeral. These are the places where UTEC staff find they can best begin the process of recruiting a young person to leave street life behind. To speak to the young people who have been served by UTEC — and whose recidivism rate is 10 percent compared to the state average of more than 50 percent — is to be inspired and moved.

I talked one summer day with Andre, who Gregg introduced me to. Andre got caught up with the wrong crowd in high school as he sought to get away from constant fighting at home. He was arrested following a robbery and ended up in prison. He found UTEC after his release, working in UTEC’s mattress recycling facility and then eventually in its cafe. “People here understand that people make mistakes,” Andre told me. “When I’d walk in[to UTEC], I’d feel like I was home. Like I was someone’s kid. They fathered me, mothered me, brothered me, cousined me. This place represents love.”

These are the kind of places nonprofit leaders like you are creating.

This is the work they are doing. Their jobs — your jobs — take everything it takes to run an equivalent-sized business. And then some.

Yet we are told nonprofits should operate “more like business.” What does that even mean? Like Google? Volkswagen? The corner dry cleaner? Proctor & Gamble? Amazon? Patagonia?

And foundations and donors are told by too many consultants and business school professors that they should operate “like investors” (maybe venture capitalists) and hold nonprofits to account — as if they were staffed by people who chose to work there in order to settle in for a long nap; as if it is a funder’s job to roust them from their sleep, kick them in the butt, and get them moving.

It needs to stop.

Making the Case to Donors

I have spent the past 18 years of my professional life trying to push against these caricatures and stereotypes and trying to influence funders to be more effective. In great part, this means influencing funders to understand the uniquely challenging work of nonprofits so they will support them in the ways they need to be supported.

I’m trying to help donors see that performance assessment is much more challenging for nonprofits than businesses. That there is no analog to ROI or profit; no universal measure by which very different nonprofits can be compared. That metrics that claim to allow for such comparison across very different contexts and fields — like overhead ratios — do more damage than good. That they obfuscate rather than elucidate the metrics that matter most. That funders should support nonprofits in seeking out the information that would be most useful to the nonprofits themselves in assessing and improving their work. That this is challenging work, requiring funding to support it — not “unfunded mandates” from donors to nonprofits to offer up data that they don’t have the resources to track.

At CEP, we know from our research on grantee perspectives that nonprofits care deeply about assessing and improving their performance. But they need more support to do that crucial work.

My CEP colleagues and I have been trying to help funders get out of their bubble of positivity — which results from being surrounded by those who have an incentive to tell you what you want to hear — and get real, candid, comparative feedback. We do this through Grantee Perception Reports that we provide funders, as well as other assessments that lift up the perspective of applicants, intended beneficiaries, and others. (Some of you have probably received these surveys and filled them out. Thank you. They matter in pushing funders to be more thoughtful about the needs of nonprofits.) We also do this through research that elevates the voices of nonprofit leaders. We have worked with more than 350 foundations to help them get feedback, and many have changed as a result.

We have also sought to point donors to crucial insights that the research we have done, which is based on surveys of tens of thousands of nonprofit leaders, reveals:

  • That nonprofits are seeking understanding from their foundation funders — of their organizations, of the communities and fields in which they work, of those they seek to help;
  • That nonprofits value transparency from their funders — clear communication of goals and strategies, consistency of information, and openness;
  • That nonprofits desperately need multiyear, unrestricted, significant grants because project-restricted, short-term grants undermine effectiveness. They drive turnover and burnout, they lead to underinvestment in technology, and they weaken organizations that must be strong to deliver good programs in the first place.

Finally, we have sought to educate donors about the fact that, almost by definition, nonprofits are often working on the toughest challenges — the ones that have defied market or government solutions. So talk of “disrupting” poverty with some radical “innovation” — as if this was as simple as Uber coming up with an approach to “disrupting” the taxi industry — is just that: talk. And while it’s great that a smattering of (mostly small and privately held) companies are seeking to maximize their positive impact as well as their profits, impact investing and B Corps aren’t going to replace nonprofits and can’t play the roles nonprofits play.

Those are some of the messages we’ve been seeking to get across to givers — whether foundations or individual donors.

We have made progress in some areas and less so in others. As you know better than me, there is work to do, still, to help donors really understand these truths.

Winds Buffeting Nonprofits

But now I want to focus on you, nonprofit leaders, and what you can do to be most successful in a moment of great challenge. After all, you are being buffeted by many winds.

I’m talking about pervasive stereotypes of the kind I outlined earlier that obscure the unsung heroism of nonprofit leaders like Gregg and Cathy and so many of you and your excellent staffs.

I’m talking about the unhelpful importation of business frameworks and language that misses the ways in which key concepts like performance assessment and strategy play out differently in a context in which the crucial dynamics are collaborative, not competitive.

I’m talking about a federal government that isn’t just neglecting the most vulnerable and marginalized among us — but targeting them. Many of our elected so-called leaders have given tacit — no, explicit — permission to their supporters to spew hate, preaching a version of patriotism that to me is anything but. For many of you, your jobs are harder and the lives of those you seek to help are harder, or even in real jeopardy, because of this administration.

I’m talking about a natural environment that is leading to more — and more intense — natural disasters, as you are experiencing here in the Bay Area, while those same elected “leaders” deny the existence of climate change. Whether you are dealing directly with disaster relief or indirectly with the effects of climate change on the most vulnerable among us, your work is harder as a result of the increasing destruction we have wrought on our natural environment.

I’m talking about a political environment in which understandable frustration about wealth inequality and a tax system that is anything but fair has led to a backlash against big donors. This backlash has morphed from a critique of specific, hideous people who should be critiqued — like Jeffrey Epstein — to a broad-based dissing of philanthropy and even nonprofits. One prominent critic, who makes many points I agree with also, has taken the generalizing to an irresponsible level (and he is hardly alone), saying recently on national television that “nonprofits are a big part of a how a rigged system gets rigged.” This is, of course, flat wrong — and dangerous.

I’m talking about a fundraising environment that is growing more challenging. We’ve seen a drop off in the percentage of households giving and a decline in overall individual giving in 2018 relative to 2017. Between tax changes that have dramatically reduced the percentage of Americans itemizing and signs of potential for an economic downturn in the coming months or years, there is considerable evidence that fundraising will be ever more challenging.

These are just a few among the many challenges of the day. And they come on top of all the everyday challenges of your work.

So, what do we do? What do you do?

Seven Principles

I am going to suggest seven principles that I believe will help you, nonprofit leaders, navigate this moment.

First, and most importantly, own your “nonprofitness.” Your organizations serve a higher purpose: a mission that is about more than what can be captured in financial statements. Let me first acknowledge that there is nothing wrong with business — indeed, we need business! But you’re different. And nonprofits play a different role.

Resist the urge to use business language and ill-fitting frameworks, or to dumb down your approach to assessing performance. Resist the urge to deny or blur boundaries between sectors and instead embrace them. My wife is a therapist and she often notes that boundaries are good in personal relationships. (You don’t want your neighbor showing up every evening on your stoop, even if she’s holding a casserole.) So too are boundaries healthy among the sectors. Take on the challenge of helping your donors and volunteers to really understand how and why your job is so much more difficult than that of running an equivalent-sized business.

And as much as boundaries between sectors matter, also recognize that nonprofits only succeed in collaboration with others. No single organization can do it all acting alone, so embrace the uniquely collaborative dynamics of nonprofit work.

Second, and related, get clear internally and externally on how you will gauge your progress. Whether you’re pursuing something shown to be valued or effective already, or whether you’re trying something innovative and seeking to understand if it works, the questions at a high level are the same: Can everyone in your organization describe clearly what you’re trying to do, how you will do it, and how you know how it’s going? Do you devote enough energy to learning and iterating your approach based on that learning? Do you seek to hear regularly and rigorously from those you seek to help? Do you share what you learn with your funders? (Increasingly, there are many tools to help you do just this. Indeed, CEP helped create one — called YouthTruth — that has helped education funders, schools, and school districts hear from more than a million students to date, as well as faculty and staff.) And finally, do you tell funders how you are approaching these questions, and ask assertively for the resources you need to get the data and information required for improvement?

Third, stand up for your staff! If you are in a leadership role, engage your board and funders in the tough conversation about what it really takes to attract and retain excellent staff. Help them understand the costs — both to people and to the organization — of paying at a rate that doesn’t allow people to live good lives and make ends meet in the areas in which they live and work. Help them understand that medical and retirement benefits are necessary and that nonprofit workers needs to be respected and elevated for their work.

Take the risk and tell your donors what you need: long-term, unrestricted, large grants and gifts. CEP has surveyed tens of thousands of nonprofits, and I have talked with countless nonprofit leaders, and this is what we repeatedly hear. And I believe funders are finally starting to get that.

Fourth, move the diversity, equity, and inclusion talk from talk to action. Look hard at who is on your boards and in your leadership teams and prioritize the diversity of lived experience that strengthens organizations. Look at your hiring and employment practices and do the simple things that reduce opportunities for bias and increase diversity. This means treating your niece’s friend’s application the way you would any others (and don’t tell your co-workers that it’s your niece’s friend). This means redacting last names and — gasp — college names from resumes. And it means rejecting the incorrect notion that the only talented people are those who graduated from prestigious institutions with massive endowments.

In your programmatic work, listen carefully to those you seek to help. Reject the idea that it’s possible to know best what other people need and embrace fully the idea that people are the best experts on their own lives!

Finally, don’t confuse a workshop on privilege or bias — many of which, the research tells us, don’t even change attitudes much less actions — with real progress. It takes hard work to change policies and behaviors.

Fifth, clarify your values and figure out who you won’t accept contributions from and who you won’t have on your boards. In the wake of controversies and scandals from MIT to the Whitney to the many institutions that accepted donations from the Sackler family, it’s clear that every nonprofit needs to consider what gifts they won’t accept. Ask the hard questions and engage your boards and staff so you can get the clarity you need — especially if you are an executive director or a fundraiser.

Sixth, use your voice and seek to inform and influence policy. Whatever your goals, it is highly likely that you can’t achieve them alone. And it is more likely than not that, ultimately, local or national policies — or both — need to shift for your goals to be met at least on a large scale. By virtue of your work and your on-the-ground knowledge, you have expertise that can inform policymakers! Take on the role of expert and policy influencer. We need you to do that.

And seventh, take care of yourselves. Your work, contrary to the stereotypes, is uniquely difficult. I last saw Gregg, the leader of UTEC who I mentioned earlier, a few days ago. Many of his staff had been up all night because of a gang-related shooting, seeking to ensure that there was no retaliation and further bloodshed. This is the life of nonprofit workers.

Whether your work is about life and death in the way UTEC’s is, or whether you’re running a community-based arts organization, I know this much: it’s a lot. It’s draining. Take the long view and make sure you’re maintaining some balance in your life. Do it for yourself, but also do it for your colleagues and staff as a retention strategy. If you’re in a leadership role, they’re watching you. They’re trying to figure out whether your life is one they would want. Show them that it is. Inspire younger staff to become leaders in the sector by modelling for them what it can look like.

In the meantime, model it for yourself, too.

Being True to Yourself

The last thing I’ll say is this: stay true to yourself and your values and principles. For me, this is about finding inspiration in those I have admired and respected who have fought for what they believe. I am talking about inspiring nonprofit leaders like Bryan Stevenson, founder of the Equal Justice Initiative, and Ai-jen Poo, founder of the National Domestic Workers Alliance. People who have taken principled stands for justice and equity and taken personal risk in the process.

But I also think about people who are not household names. People like Gregg and Cathy. People like you.

And I think about people in my personal life, like my dad. He was an activist — getting arrested both at a lunch counter sit-in in North Carolina in the 1960s and on the train tracks he lay across in Washington State to protest nuclear weapons in the 1980s. He devoted his life to pursuing what he thought was right, sometimes at the expense of his relationships with those around him. I don’t recommend that part — to my earlier point about balance — and I feel like sometimes I paid the price, personally. But I admired his courage and his conviction.

He died when I was 14, but not a day goes by that I don’t ask myself what he would have thought or what he would have done. I urge you to connect to those people in your lives whom you admire because they’ve shown you what it looks like to speak up, to take the courageous path, to take risks for the greater good — whether they’re living or whether you’ve lost them. If the latter, there is no better way to pay tribute to them and honor their legacies than to act with integrity and courage every day.

Unsung Heroes

As John Gardener, founder of Independent Sector and Secretary of Health, Education, and Welfare under President Lyndon Johnson, put it many years ago, the nonprofit sector at its best is one:

In which we are committed to alleviate misery and redress grievances, to give reign to the mind’s curiosity and the soul’s longing, to seek beauty and defend truth where we must, to honor the worthy and smite the rascals with everyone free to define worthiness and rascality, to find cures and console the incurable, to deal with the ancient impulse to hate and fear the tribe in the next valley, to prepare for tomorrow’s crisis and preserve yesterday’s wisdom, and to pursue the questions others won’t pursue because they are too busy or too lazy or too fearful or too jaded.

These are beautiful words. And true.

My view is that this country’s nonprofit sector is an essential part of what is good in our society. From the art that brightens our lives and challenges us, to the vaccinations that prevent disease, to the human rights that have been secured, philanthropy and nonprofits are often behind our greatest gains. Take pride in that. Don’t forget it.

Your work is noble. You are this country’s unsung heroes.

Thank you for what you do each day.

Phil Buchanan is president of CEP and author of Giving Done Right: Effective Philanthropy and Making Every Dollar Count. Follow him on Twitter at @philxbuchanan.

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