Supporting Executive Leaders
According to a long-term study on nonprofit executive retention, the role of the chief professional officer in nonprofits is becoming less and less attractive. While most executives report that the parts of their job that focus on mission-related activities remains very fulfilling, the rest of their duties are less than satisfactory. An alarming number of executives report that they plan to quit their jobs in less than three years. During a period when a leadership deficit is inevitable because Baby Boom executives are reaching retirement age, efforts to identify how to better support nonprofit leadership should be an emphasis for boards and funders.
CompassPoint, a nonprofit support organization in the San Francisco Bay Area, with support from the Meyer Foundation in Oregon, conducted surveys in 2001, 2006, and 2011 to monitor executive attitudes towards job satisfaction. The findings in the first two studies were consistent:
- Annually, 9% of executives left their jobs.
- Three out of four executives expected to leave their current jobs within five years.
- Only 29% of executives discussed a succession plan with their boards.
- Even when executives leave their jobs, most plan to stay in the sector with 70% reporting that they will seek work in another nonprofit, a grant making organization, or consulting.
While the responses in the most recent study (2011) mirror most of the results from prior studies, a few were different. The expected pace of exodus for CEOs who plan to retire has slowed, with the 2008 recession cited as the primary factor influencing their decision. Of those who are putting off retirement, most worried about the weak financial footing of their nonprofit caused by the recession, while others noted that their own personal financial condition had been negatively impacted. Now that the economy has rebounded, charitable giving has increased, and the markets have recovered, it could be expected that those who delayed their departure will again act on their earlier plans to leave.
Another finding that differed from previous years addressed how soon executives plan to leave their jobs. In earlier studies, three out of four said they planned to leave in fewer than five years. By 2011, evidence showed that three out of four plan to leave their jobs in fewer than three years! Over a third will be fired, but most of the rest will leave because of a perceived lack of support from their board or funders.
The CompassPoint studies also found:
- Executives who are unhappy with their boards are more than twice as likely to be planning near-term departures as those who have positive perceptions of their boards.
- Only one in three executives agreed strongly that their boards challenge them in ways that make them more effective and,
- Only one in three executives agreed strongly that their staff views the board as an engaged leadership body.
- The boards were not the only problem.
- Only one in three executives agreed strongly that their funders have a good understanding of the nonprofit executive’s job.
- A vast majority agreed that general operating and multi-year support are the actions that executives say would be most helpful.
CompassPoint also found that while 52% of new executives are happy during their the first year on the job – a period referred to as the “honeymoon” – by the second year their happiness factor falls to only 37%. And as we have stated, by the third year 75% will have left their jobs. However, the studies also found that when an executive stays in the job for four or more years, their comfort and satisfaction levels increase year-by-year. Sixty percent who have worked 20 or more years in one organization report that they are happy. But the studies also found that even with higher satisfaction based on years in a job, only 29% of executives who stayed in their jobs for 20 or more years were happy with their board’s performance. A conclusion could be drawn that seasoned executives become more comfortable with their under-achieving boards – that they compensate and that acceptance allows them to be less stressed about the lack of support.
But having a supportive board is still the ideal. What executives want is a meaningful and predictable partnership with their boards. They want boards that will help with generating sustainable revenue. They want board members who come to meetings. They want board members who care about the mission. They want and need board chairs who can work with them to build engaged boards.
The studies also found that while executives want support from their boards, they may not take ownership of the problem, as they should. Executives report spending less than five hours a month supporting their board. In other words, the blame cannot be totally placed with the board. Both executives and boards need to work more on developing supportive relationships.
CEO frustration with funders has been consistent. Nonprofit execs believe that funders expect them to lead sustainable organizations, without a clear understanding of what sustainability means or how to achieve it. That fact led the team at Foraker to write our book, Focus on Sustainability: A Nonprofit’s Journey, which outlines the factors of sustainability we have found in successful and resilient organizations. In addition, most CEOs perceive that funding officers have unrealistic expectations and that they are micromanagers. In our newsletter article on burnout, we found that long hours rarely result in burnout, but poor boundaries and micromanagement often do.
Luckily in Alaska we have better informed funders that collectively work to minimize CEO stress and even provide resources to support their success. The Rasmuson Sabbatical Program is one example. And through Foraker and other providers, Rasmuson Foundation, the Alaska Mental Health Trust Authority, Mat-Su Health Foundation, the oil industry, and other funders work to support nonprofit leaders.
It’s not just partnerships with boards or funders where executives report frustration. Half feel they need to develop their own capacity in fundraising and in developing strategies for their organization to generate earned revenue. In addition, a third of executives report needing more technical skill in financial management.
The reports found that executive coaching remains the most effective technique that chief professional officers identify that helps them adjust to their complex jobs. Closely behind is participation in peer networks or leadership development programs. Over 80% of respondents found all three support services beneficial.
One of the first programs developed by The Foraker Group, with support from the M.J. Murdock Charitable Trust and the Rasmuson Foundation, was the Certificate in Nonprofit Management. This month we will begin the 15th cohort. As in past years, we had more applicants than space. That is proof that after 14 years, this type of programming is seen as important. This year the next 20 nonprofit leaders will join over 250 prior professionals who have taken advantage of the program.
Three years ago with support from BP, we created a leadership development program called Catalyst for Excellence. Also this month we will begin that transformative process with the fourth cohort of executives.
The Foraker Group has provided executive coaching services for five years. More than 20 nonprofit executives, development officers, and finance directors have reached out for this support. Our coaches are seasoned nonprofit professionals. Many of these relationships have endured for many years because of the need for this kind of support.
Finally, starting this fall, with support from the Murdock Trust, we will initiate our newest support program for nonprofit executives, which focuses on new executive directors who have been in their jobs for less than three years. A mentorship program will be available for select individuals for an exploration in governance, leadership, financial management, or planning. The cohort will meet through teleconferences and/or in-person sessions where they will focus on areas of exploration, network with one another, and share experiences. We hope to provide the kind of support they need to pass the critical barriers for executive tenure.
If you have interest in participating in this program, or know someone who may benefit, contact Heather Harris at The Foraker Group, 907-743-1217.