Will Grassroots Nonprofits Survive When Boomers Retire?

In Illinois, a boy named Kevin found himself homeless at age 18 in one of Chicago's dangerous neighborhoods. He was thrown out of his home. And no matter how hard he tried, he couldn't see himself living past 20; his surroundings were just too violent.

But Kevin, who prefers that his real name not be used, received help from Teen Living Programs, a nonprofit organization working to end teenage homelessness in the Chicago area, and turned his life around. He left his neighborhood and has a steady job with full benefits at Chicago's O'Hare International Airport. He is now 20 years old and keeps coming back to volunteer at TLP.

In adjacent Missouri, Tom, who also prefers a pseudonym, experienced seven years of on-and-off homelessness caused by chronic mental health problems and drug and alcohol abuse. Tom spent years sleeping on back porches and in his van, getting apartments and losing apartments, getting jobs and then losing them. He stayed in Missouri the whole time, but because he moved around so much, he was ineligible for disability benefits.

Eventually, Tom got in touch with Phoenix Programs, Inc., a Columbia, Mo., nonprofit that provides treatment for those suffering from addiction. He stayed with Phoenix for nine months. Today Tom has successfully battled his addiction problems, has a car and an apartment, and is pursuing a serious love interest.

In California, Els Cooperrider wanted to keep Mendocino County, which has a long and proud tradition of organic farming, free from genetically modified seeds. To preserve her county's tradition (which stretched back to the 1970s), Cooperrider, and 200 other volunteers, mobilized the nonprofit Mendocino Organic Network and successfully pushed through a countywide ordinance prohibiting the growing of genetically modified organisms. This initiative made Mendocino County the first GMO-free zone in the United States. Soon after, several other counties followed suit.

Nonprofit organizations like these are often referred to as the conscience of our society. They devote time to work that businesses and the government do not. They also protect us from the dangers of the two. But nonprofits may be facing a leadership shortage, now and in the decades to come, as the baby boomer generation, which heads the nonprofit world, starts to retire. At the same time, the number of nonprofits is expected to increase, leaving many to wonder who will steer their helm in the boomers' absence.

Disturbing data
According to a report called "The Leadership Deficit," written by Thomas Tierney, chairman and co-founder of the Bridgespan Group, a nonprofit that provides other nonprofits with management consulting services, "For the years spanning 2007 to 2016, these organizations will need to attract and develop a total of 640,000 new senior managers -- or the equivalent of 2.4 times the number currently employed. To put the challenge in perspective, attracting that many managers is the equivalent of recruiting more than 50 percent of every MBA graduating class at every university across the country, every year for the next 10 years."

Even Tierney's more conservative estimate is cause for alarm: 330,000 new senior executives will be needed over the next decade. "Forecasts are always imperfect," Tierney writes. "Nevertheless, the message in these numbers is clear: In the decade ahead, nonprofit organizations will need far more new senior leaders every year than they did in the past. Our leadership needs, it seems, are unprecedented."

Most businesses anticipated this problem and started preparing for it in the early 1990s by hiring individuals they perceived would be strong leaders in the future, writes Tierney. But nonprofits are only beginning to do so. And because they pay less than the corporate world, nonprofits are at a disadvantage when they try to attract new talent.

College students, wracked with ever-increasing amounts of educational debt, aren't as eager or willing to step into the low-paying, often thankless positions. Stephen Bauer, director of the Initiative for Nonprofit Sector Careers and Technology, gives the example of an average law student with $120,000 in educational debt to illustrate the extent of the problem. That law student can't afford to take a job with a nonprofit, he says, because at about $40,000 a year, they just don't pay enough.

Students who do plan to work for a nonprofit right out of school are often the ones who don't need the money. Take Kathleen Bauer, for example. A junior at the University of Dayton, Bauer describes herself as a "trust fund baby." Her college costs are paid by her parents, and when she graduates, she will have no educational debt. She plans to work for a nonprofit after getting her degree and was inspired to do so after a three-month trip to Africa with Operation Crossroads Africa, a cross-cultural exchange program.

Bauer acknowledges that she would probably not work for a nonprofit if she didn't have her parents' financial security as a backup. "The fact that I have the financial luxury of my college being paid for is a big help," Bauer says. "I know my parents are there for me to fall back on."

More typical of today's college students is Jonathan Walz. Currently a junior at Howard Stowe University, Walz estimates that he will have at least $25,000 in educational debt when he graduates. He originally planned to graduate from St. Louis Community College at Maramac with an associate degree in human services and start working for a nonprofit right away. Walz, who was particularly interested in working with underprivileged or abused children, wanted to get his bachelor's degree while working.

But one of Walz's professors opened his eyes to the reality of working for nonprofits. She told him that with an associate degree, he should expect about $20,000 a year, which Walz says is not enough to "make ends meet and keep going to school." Instead of following his original path, Walz decided to get his bachelor's first, in hopes of upping his starting pay -- a move that he calls "a headache."

Although Walz says that he was never interested in having a lot of money or "fancy cars," he does not want to feel exploited either. One way to ensure this, he says, is by getting paid a fair amount for the work he does, regardless of what job he ultimately takes.

Chanda Hinton, executive director and founder of the Chanda Plan Foundation, a nonprofit that seeks to fund alternative health treatments for the disabled, says that nonprofits are often caught in a tricky position when deciding how much to pay their employees. Because nonprofits are often funded by grants and donations, she says, providing large salaries for your employees just plain looks bad to donors, because that money is supposed to fund your mission. "You need to spend money on the mission and not the people," Hinton says. Donors often think that nonprofit employees should be working for moral and spiritual rewards, not monetary ones, she adds.

A reason for hope?
Some people in the field reject the idea that nonprofits will experience a severe brain drain. Erica Greeley, deputy director of the National Council of Nonprofit Organizations, is one of them. "Most of what I've heard mitigates the idea that there's going to be a crisis," she says, explaining that, in the American economy, people don't think of their careers in 20-year increments. Rather, most say they will leave their job in the next five years.

Recently, this has been a cause for alarm as studies and reports projected that the nonprofit sector will lose a majority of its work force in the next five years. But Greeley says that this is not a "red flag" yet. She believes baby boomers' retirement will be much more gradual than that of the previous generations because boomers are healthier, committed and impassioned by their work.

Additionally, some boomers may continue to work because they don't have enough money to retire.

Jan Masaoka, an independent consultant for nonprofits, also doesn't think the nonprofit sector will face a leadership shortage. Boomers are "echoing their own age anxieties" by saying that there is going to be a crisis, she says, because they don't know who will replace them. She says that individual nonprofits may have trouble finding good leaders, but that would not reflect the sector as a whole. "A given person may have a problem finding a good car mechanic, but would I think that there is a car mechanic crisis? No," Masaoka says. She believes that boomers want to work longer, citing as an example a 79-year-old friend of hers who recently took a job as a nonprofit's campaign director.

Masaoka expects that as nonprofit leaders leave their current jobs in the years to come, they will take jobs at other nonprofits. And though student debt is forcing a lot of college graduates to not take nonprofit jobs as their first choice, they may well enter the nonprofit sector at a later age. A lot of people are entering the nonprofit sector at age 40, Masaoka says. This differs from current executive directors, who began working for nonprofits right out of school.

Although there are a variety of opinions on whether or not the nonprofits are facing a leadership shortage, and how severe that shortage is, nearly all agree that nonprofits should be preparing for a potential crisis through building safety nets, recruiting new talents and keeping the talent they already have. If a leadership crisis is in fact on the horizon, the consequences will be felt most severely by individuals who depend on the work of nonprofits.

"The short-term effects of a "brain drain" will be tolerable," Tierney of Bridgespan says. "Yet day after day, the leadership deficit will take its toll as organizations across the sector fall short of their potential. Staff will become frustrated, donors discouraged and reputations tarnished. And while the sector stumbles, the deepest suffering will be visited upon the millions of people who rely, directly and indirectly, on the services that nonprofits provide and the social value they create."


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