Wednesday, June 29, 2011

All About Executive Directors - Results of a New Daring to Lead Study on Nonprofit Leadership

A new national study of nonprofit executive leadership provides a keen insight into and useful benchmarking statistics on the state of nonprofit leadership. Daring to Lead 2011 is a joint project of CompassPoint and the Meyer Foundation. The report is based on responses from over 3000 executive directors and follows similar studies in 2001 and 2006.

I am again writing companion pieces here and at the Nonprofit Capacity Blog at about the study. This piece discusses the results from the perspective of the executive director and the other one the perspective of the Board.  As always, I add my two cents along the way.

Here are the key findings:

Though slowed by the recession, projected rates of executive turnover remain high and many boards of directors are under-prepared to select and support new leaders.

The recession has amplified the chronic financial instability of many organizations, causing heightened anxiety and increased frustration with unsustainable financial models.

Despite the profound challenges of the role, nonprofit executives remain energized and resolved.

The last few years have been challenging for nonprofit executive directors by any measure. Although a grand exodus was expected, more EDs than expected hung in there but not without its toll. Sixty-five percent (65%) of executives reported significant levels of recession-related anxiety. Even with this to deal with, 45% reported being very happy in their jobs, and another 46% reported that they have more good days than bad in the role. The exodus of EDs is sure to pick up pace as 20% of the respondents were over 60. In this study 67% said they expect to leave their present position within five years. Retirement isn’t the only reason.

Here is something for EDs to know when they are new in the job.  By and large the first year is a honeymoon period and EDs' happiness in a job takes a dive in year 2 slowly building - taking over 10 years to pass a 50% rate of happiness with the job.  My advice to new EDs is to take a page from experienced EDs and conjure up all the resilience they can.

EDs do take the time to invest in their own development as leaders. This chart shows the breadth and effectiveness of various strategies employed by EDs for their own development.

They consider executive coaching, peer networks, and leadership programs as most effective and reported that peer networks were especially effective for decreasing feelings of isolation and norming the trials and tribulations of their jobs.

In my year end blog post in 2009 I said that I wished my readers resilience for 2010 as that is what they would need most. It is interesting to me that was a key finding in this report. EDs have remained resilient through the recession and with as much passion and commitment to their causes as ever.

One area of concern that I see frequently in nonprofit leaders they see in themselves: financial management skills.  A significant number of EDs say that they don’t thoroughly understand the financial underpinnings of their organizations. At the same time boards of directors are evermore focused on financial oversight. In my experience financial management issues can be a key point of tension between a board and an ED. In addition to being a primary contributor to executive director burnout, financial instability can threaten an organization’s ability to carry out its mission and its very existence. This report most definitely sends a strong call for more training and development in this area for EDs.

This chart highlights the concern on the EDs part of their own ability in this crucial factor of nonprofit leadership.

40% consider financial management as a “depleting” part of their job.

Although ED’s recognize this as a very important part of their job 36% say they don’t spend enough time on it.

73% say there is significant board financial oversight while only 47% say boards provide significantly to fund development.

So what are the energizing part of an ED’s job? This next chart is fascinating but not surprising. The most energizing aspects of a ED’s job are working with partners, program management and working with individual donors.

What was the career path of the 3000 ED’s that responded to this study? This is another fascinating result. Only 32% were hired from outside the organization and 68% were an employee on staff, a board member or the founder.  A closer look at the data suggest there is almost an equal chance as becoming an ED with a promotion from within as there is as an outside hire. 

A big thank you to CompassPoint and the Meyer Foundation for this insightful report on what makes Executive Directors tick. We have so much to be grateful for – the cadre of nonprofit leaders who have weathered the storm of the recession and kept the ships afloat and righted. Gracias! And some good advice for newer EDs.

See the whole report here.

1 comment:

Auberge chez Richard said...

Informative, thank you very much.

Richard H Rogers