Nonprofit Leadership Challenges of our Modern Age

Challenges we should note throughout the entire life cycle of nonprofit work.

This article was written by featured writer Amber Smith.

When my best friend and I set off on a cross-country road trip that would kick off the founding of the nonprofit organization I currently serve, the world was a different place. It was 2004, just a few short years after the tragedy of 9/11 which indubitably shaped my entire generation. We were tech-savvy enough, though these were the days before Facebook and Twitter and the social media platforms that took the world by storm after those. Wifi was not yet a pervasive force (I recall having to use those insertable cards in our laptops to access the internet). We navigated our way around unfamiliar cities we visited using printed out, step-by-step instructions from Mapquest or Yahoo! Maps. Most of the amazing stories we heard and lived out on the trip were captured by a regular camera and handheld video camera which are now, unfortunately, gone forever. Someone stole them out of my car while we stopped in San Francisco.

During that road trip that changed our lives and shaped my future nonprofit career, we knew nothing about running a nonprofit. At least, not the technical parts of it. We knew we’d have to inspire people. We knew we had to be organized. And we were just starting to test out flapping our proverbial fundraising wings. But that was about the sum of it.

Just after the road trip, as we were launching the nonprofit, we learned a lot about the technical and professional stuff we didn’t know. For the first few years of our fledgling organization, we’d called our nonprofit some obscure, hard to remember and say name. It wasn’t until many years later that we learned about marketing and branding, and rebranded the cause under the much more easy-to-remember name and branding themes it has today. I learned hard lessons about recruiting a board of directors, losing a lot of friends and supporters in the first few years until a wise friend instructed me to try raising the bar, seeking out the best, most skilled fits for our cause’s leadership, rather than lowering the bar, which had been allowing many people who were not a good fit to take part to the detriment of the work.

The most important thing I learned, however, was that if you start your learning with a strong foundation of thoughtful principles, you can succeed in the nonprofit world.

Everyone entering the nonprofit world starts in a different place in their lives and with varying skillsets. Knowledge of marketing, accounting, grantwriting, fund or board development or human resources is highly valuable, but using those skills without an understanding of the most critical challenges our sector faces is like trying to use your phone’s GPS in a land with no signal; you came with a great tool, but didn’t understand the obstacles your terrain would present.

My college days may be over, but that doesn’t mean I’ve forsaken all I learned back at my ole’ alma mater, NC State University (go Wolfpack!). Just short of a decade ago, NC State’s Institute for Nonprofits developed and published five major “Leadership Challenges” faced by leaders in the nonprofit sector in our modern time. With our lives and world ever changing by technology and globalization and politics, these challenges are not related to the technical side of leading a nonprofit organization, but to the core of what leadership in our modern world is in our sector. They provide a True North, a compass we in the nonprofit world can use to guide our leadership development as we weather the storms of constantly changing landscapes.

Five Nonprofit Leadership Challenges

(Credit: Institute for Nonprofits at NC State University)

CHALLENGE #1: Aligning mission, methods, and resources:

A great explanation for this challenge came from a past professor when she posed something like this to the class: “If your organization’s mission was to say, fight rape culture and promote gender equality, you wouldn’t have a fundraiser with a bachelorette auction, would you?” Aligning your cause’s mission with its methods and resources is in part about making sure you never adopt an “ends justify the means” mentality. When an organization has successfully aligned these three elements, they are better able to maintain a strong sense of their values, which also has practical implications: Your story is simpler and easier to tell. Your donors “get it” faster, and will like you better.

On the resources end, overcoming this challenge can mean identifying the best ways to generate revenue for your cause. Though individual donations are said to comprise a good percent of income for many organizations, this model is not necessarily the best fit for every organization. For example, membership organizations may garner more support from membership fees; others from fees for service. Understanding the best resourcing model for your particular mission will lead to faster success and less headache.

CHALLENGE #2: Earning the public trust:

This one always feels like an uphill battle for nonprofits, whose “halo effect” raises public expectations of morality for these organizations. The scandalous behavior of one nonprofit results in great outrage for all causes, which hurts the lot of us. Which is why it’s so important to tackle this challenge from the outset of your nonprofit work and tend to this trust garden frequently.

There are some great ways each of us can do this, to the benefit of the whole sector. Transparency is an obvious one. Following the simple public relations rule, “tell the truth”, nonprofits can make quite a bit of headway in solidifying the public’s trust for their message and cause. I once received an email from a nonprofit about the different ways they’d failed to meet their goals that year, and I found myself liking them even more, not less.

In our collective battle against the Overhead Myth, we can also continue to showcase the impacts our causes are making, emphasizing their importance over an organization’s exact and often meaningless ratio of admin vs. program expenses.

CHALLENGE #3: Balancing individual interest and the common good:

It may feel intuitive to say that leading a nonprofit is all about the common good, and not at all about the individual interest. But the truth is that it’s actually about the balance between the two.

On the common good side, one striking challenge is one many nonprofit founders may face: the simple truth that a nonprofit does not ‘belong’ to you. It is a beast that serves the community and is accountable to the community entirely. When you create an organization, this can be a difficult thing to wrap your head around, especially in a culture that lauds entrepreneurialism, personal success, and ownership. I can’t count the times someone has come up to me and said, “Can I get your advice on how to start my own nonprofit? I’m hoping I pay myself a salary of (enter some out of touch high dollar amount any of us in the sector would kill for here) so I can quit my job.” There are many presumptuous things about that sentence (Choosing your own salary? Ha!), but addressing the most basic: starting a new nonprofit — if that’s even what the community needs — is not about you. And if you try to make it about you, you’ll fail.

Yet, we also shouldn’t ignore the needs of the individual in blind favor of the common good. When you do, what happens? Burnout, that’s what. An organization losing its team left and right because it has failed to give them the emotional, physical, and mental support needed to survive (i.e., paying reasonable salaries, investing in infrastructure and capacity so that team members don’t sit in broken chairs or help fewer people due to shoddy technology, etc.) will ultimately fail in its mission, and that, too, helps no one.

CHALLENGE #4: Capitalizing on opportunities associated with diversity:

Beyond a moral imperative to be inclusive, nonprofits have a lot of opportunities to operate more effectively and successfully by embracing diversity. Capitalizing on these opportunities has been, and remains, a major challenge faced by the sector.

These opportunities are not terribly difficult to understand. For one, an organization’s leadership should mirror the demographics of the community being served. When we embrace and actively seek to build diversity within our organizations, we have greater opportunities to understand each other’s needs and do a better job of meeting those needs as a collective community.

We open ourselves up to new populations of volunteers and donors, too, when we widen the pool of possible social capital by diversifying our leadership and network. A 2015 study of for-profit companies found that companies with the highest levels of ethnic and racial diversity in management were 35% more likely to have above-average profits. It seems logical that nonprofits could enjoy the same success in fund development based on this notion.

One reason posed why diversity may aid in success is that diverse groups are more likely to re-examine their previously held biases and beliefs. This is a critical skill in tackling huge, complex problems. And if you haven’t figured it out already, solving major social issues is not easy, friends. We need all the brains with all of their unique backgrounds and perspectives in the room to do it. That is, perhaps, the biggest opportunity before us.

CHALLENGE #5: Moving beyond charity to systemic change:

My personal favorite of these challenges, moving beyond charity to systemic change deals with the notion that we need to be working to end hunger and homelessness, stop human trafficking and war and racism, and eradicate diseases and suffering. It sounds lofty, maybe, but if we’re not working to move the needle, why are we working at all? Nonprofit leaders should consider strategies to surpass this challenge in the work they do, especially in direct service organizations who help folks meet basic needs day to day. Most certainly, we can’t allow people to starve day to day while we’re off looking for the way to end hunger. But if we never invest in finding the way to end hunger, we’ll be stuck on a hamster wheel forever. And that’s not what we got in this line of business for.

So what do we do? We examine the data. We put resources into research. We come up with a plan on how we can move from an organization that feed folks day to day to one that not only feeds folks, but is working toward a day they no longer have to. We share our vision of a world without X, Y, or Z problem with our supporters and let them buy into it with us. We share our successes, however small, with funders and the public until they see that needle move. And then we win.