Nonprofit Leadership in 2022: From Challenge to Transformation

The tagline for the early 2020s, should be, “The only constant is change.” We’ve experienced enough change in the last two years to last a lifetime. Life has often felt out of our control. While we recognize and honor this, let’s put aside for the moment the ubiquitous challenges themselves and focus on what we can control, or at least influence. Let’s hone in on what the evolving global environment means for nonprofits in the coming year.

The independent sector needs bold, strategic, and flexible leaders to light the way. We already have many such leaders, but we should also embrace emerging leaders with new ideas. I don’t just mean executive directors; I’m also including boards of directors, leadership staff and volunteers, representatives of client populations, the donors who fund important mission delivery, as well as the overarching associations that define the ethical guidelines within which nonprofits operate. I include these umbrella organizations because, as we see signals that newer methods of fundraising and fund acquisition such as venture philanthropy, social enterprise partnerships, social media-related giving, donations via cryptocurrency, and other emerging methods of hybrid fundraising are here to stay, we’ll need guidelines on how to handle these relationships and transactions ethically and transparently. The sector can benefit greatly from evolving practices; nonprofits just need to make sure that they don’t lose sight of their missions in the process.

Let’s look at three things nonprofit leaders must embrace in order to transition from crisis operations mode to systemic success in the future.

1. Evaluate where nonprofits’ missions and service-delivery methods fit into an evolving landscape.
2. Be willing to expand our practices when it comes to securing funding for mission delivery.
3. Turn diversity, equity, and inclusion (DEI) words into actions with lasting impact.

The Right Organizations, Services and Organizational Capacity

Many nonprofits are used to operating with a “poverty mentality,” believing they must do the most with the fewest resources. This must stop. “Doing the most” doesn’t mean much if they’re doing the wrong things or aren’t doing them well. It is time for nonprofit leaders to take a hard look at their organizations, missions and program impact, and ask whether they are doing the right work at the right time. Are they positioned to best deliver the service or meet the need? If they believe the answer is yes, is success measured by outputs (how many things you can do) or impact (the lasting deeper change that results from your work)?

To answer those questions, nonprofits must be able to articulate their cases for support. The case describes the issue in society that needs to be addressed, outlines how a particular nonprofit addresses the need and why they are valid to do so, what is needed in terms of support to make their solution possible, and why that organization is a sound philanthropic investment.

Just as we should stop planning with a “poverty mentality,” we should also ditch the “piety mentality” — the belief that something is better or more righteous because it is done by a nonprofit. Nonprofits were meant to fill the holes that were left by government and private industry. They’re known as society’s safety nets. But if evolving private industry can either make the holes in the net smaller through strategic systemic action, or fill the holes more efficiently and effectively in an equitable way, why shouldn’t they?

Nonprofits should continually ask themselves questions such as:

• Is our mission still appropriate and relevant?
• Do our actions match our mission, or have we expanded to other areas? If we’ve expanded, why?
• Do we have the appropriate resources to be effective?
• Are our staffing practices conducive to recruiting and retaining the right people for the right jobs?
• Are we paying staff appropriately, or have we fallen victim to the belief that nonprofit employees should live on a substandard wage?
• Are we keeping skills honed by offering staff professional development?
• Have we dedicated enough resources to technology and cybersecurity, and do we understand the quickly evolving needs in this arena?

The answers may identify the need for strategic change for the organization. Change can be uncomfortable at the best of times, but it will need to be especially well-managed now as many are still feeling the effects of a turbulent 48 months.

Fundraising and Problem-Solving

Any evaluation of organizational capacity generally triggers a conversation regarding financial capacity, which generally means that a discussion about fundraising and funding sources is not far behind.

Here is one truth leaders must understand and embrace. Fundraising is a profession. It’s not always understood as such by boards of directors and sometimes not even by executive directors. According to Eva Aldrich in “Achieving Excellence in Fundraising,” the existence of the following characteristics is what makes fundraising definable as a profession. There is:

• expert knowledge with a theoretical base acquired by a lengthy period of training;
• a demonstrated devotion to marrying technical knowledge with human relationships;
• an active professional association;
• a code of ethics; and
• a high level of control over credentialing and application of the work.

Fundraising meets these requirements, and there are scores of current and emerging dedicated professionals ready to take on the future of fundraising. However, development professionals (fundraisers) cannot do the work alone. They need leaders to educate themselves about industry standards and best practices, who will actively build a culture of philanthropy where a dedication to professional and ethical fundraising permeates every level of the organization.

If we combine the first two sections, capacity-building and mission evaluation to deliver the right services in the right areas, added to professional-level fundraising supported by the whole organization, nonprofits are on the right track to address societal needs. But we must always be willing to update the ways the independent sector solves problems, connects with clients and supporters, and secures funds.
The nonprofit sector has long made mistakes by not including people who are affected by issues in the conversations about how to address those issues at the core. And by not focusing on root causes or involving the right people, in some cases we’ve done a lot of well-meaning work that ended up being more about putting on Band-Aids than finding the causes of the wounds.

Band-Aids are necessary, yes, but at some point we have to gather the right people to determine what is causing the wounds. Nonprofit leaders don’t have to have all the answers, but they must be able and willing to convene the right people, and then listen to them. Otherwise, nonprofit organizations just become competing Band-Aid manufacturers.

Put Words Into Action

The murder of George Floyd in 2020 was the metaphorical shot heard ’round the world. The year 2021 saw a tipping point in racial tensions in the United States. Since then, philanthropists and corporations have been pledging incredible sums of money and nonprofits have been drafting statements on social justice, equity and inclusion. Follow-through and accountability must come next.

There is a phenomenon I call press release social action (PRSA) that rewards companies, philanthropists and nonprofits for making grandiose pledges of philanthropic funds and promises of sweeping changes in policy. PRSAs generally find their origins in times of high emotion. They are well-meaning but often lack follow-through; accolades are given for the initial announcements, but efforts to hold the promisers accountable sometimes fall short. This is evidenced by the fact that, as reported by The Washington Post, only a fraction of the $4.2 billion that was pledged by corporations to address racial inequality in the last 48 months has actually been paid to organizations that directly address relevant issues.

The diversity, equity and inclusion (DEI) statements published by many nonprofits are another example of PRSA. The right words were written; now the challenge is in seeing the nonprofits follow through on those promises by conducting serious evaluations of their staffing structures (including the executive level), the makeup of boards of directors and their investment policies.

PRSAs don’t have to have a negative connotation. In fact, they can be important steps on the pathway to change. After the promises come the action steps: convening the right people, drafting the strategic implementation plans and consistently doing the work.

Lead the Transformation

The coming year is the time for leaders and change agents to take a hard look at the nonprofit sector. Are the right organizations addressing the relevant needs? Are they doing so using the best strategy with the most appropriate tools and the right people? Are they dedicated to a future that is more representative and equitable?

After two years of pandemic conditions and a heightened social justice-related environment, the leadership challenges are many, the opportunities great, and the potential return on action is nothing short of transformational. We just have to be willing to learn and adapt, to surround ourselves with people whose areas of knowledge are different than our own, to change course when necessary, and to leave our egos at door.