The deck often seems to be stacked against nonprofit organizations. No one doubts their work is important—whether it's running a homeless shelter, an after-school program, or a worldwide campaign against hunger—but nonprofit jobs, with their long hours and low salaries, have always required a certain amount of sacrifice. A sobering study released yesterday, the largest survey ever of nonprofit employees, reveals surprisingly widespread dissatisfaction with the way many nonprofits are organized.
In "Ready to Lead? Next Generation Leaders Speak Out," nearly 6,000 nonprofit employees around the country report rising burnout rates (3 out of 4 executive directors plan to leave their jobs in the next five years) and increasing frustration with their careers (69 percent of respondents said they were underpaid). For many, jobs in for-profit businesses, with fatter paychecks and more comfortable lifestyles, are beckoning. U.S. News spoke about the future of the nonprofit sector with Billy Shore, founder and executive director of Share Our Strength, a Washington, D.C.-based nonprofit devoted to ending childhood hunger in the United States.
Is the nonprofit sector facing a talent retention crisis?
I don't know if it's a crisis yet, but it is a very serious challenge. Some of this stems from a cultural belief that people shouldn't make a lot of money in the nonprofit sector. I tend to disagree with that. This sector attracts a lot of young and idealistic people. Those of us in leadership positions are going to have to get out on a limb a little bit. If we're not the ones to stand up and say we need to pay them well and keep them employed, nobody else is going to do that for us.
This new report seems to zero in on salary as one of the sector's biggest shortcomings. What's the average income for an experienced nonprofit employee?
You can make a decent salary in a nonprofit organization—$60,000, $70,000, even $100,000. The challenge tends to be competing with the private sector for the most talented people. At Share Our Strength, we have a number of people who have M.B.A.'s. Coming out of business school, they could go to work for McKinsey, Bain, or BCG and make more than we could ever pay them, even if we're paying them a very competitive rate compared to other nonprofits.
M.B.A.'s aren't the only ones in this survey who feel underpaid, though. Have you had any trouble keeping talented people in your own organization because of salary issues?
Yeah. We had a terrific woman who was with us for 17 years; she started with us very young, before she got married, before she had children. When she had her fourth child, she had to leave because of the financial constraints: Some of it was time demand, but most of it was financial.
Another big beef employees have with nonprofits is their lack of upward mobility.
Nonprofits have not been particularly good at being purposeful about creating career paths. I think the better organizations are now thinking about how to do that.
It's also hard on their managers. In the survey, 3 out of 4 nonprofit executive directors said they plan to quit in the next five years. Does that surprise you?
No. The sector's always had a very short-term view, and it's always been seen as a career detour for a lot of individuals rather than as a career builder. Organizations need to invest in staff and training and a whole variety of things so that everybody involved understands that the problem they were designed to solve maybe is not going to be solved in five years—it might take 35 years, and if you think of it that way, you start to allocate your resources differently.
Many survey respondents say they'd like nonprofits to start offering some of the perks associated with the private sector, like mentoring programs, merit-based pay, and retirement accounts.
People often talk about the fact that the nonprofit sector needs to be run more professionally, measure results, invest in people. It's in some ways easier to do in the corporate world because there are better metrics. It's hard to measure whether hunger decreased or not. Leadership has to be willing to make investments that may not pay off until the long term. That's profoundly more difficult in the nonprofit sector because of the nature of urgent human need: You want to serve as many people as need help at a time. Sometimes doing that is shortsighted relative to your capacity to serve more people.
Do you think nonprofits are starting to get better at this?
Yes. I'm involved in an organization called College Summit, whose president is a guy named Dean Furbush, who was the CEO of FreshDirect in New York, the Internet grocery delivery company, and before that was the chief economist at Nasdaq. He's a very impressive businessperson, and he's now running a nonprofit. The sector is starting to attract people like that, who have business skills but want to put them to work in a nonprofit setting.
As you said, nonprofits are even hiring M.B.A.'s.
A lot of nonprofits are so focused on achieving social impact that they often don't spend enough time thinking about how they add value to their partners or how they protect the enterprise itself. We've evolved a lot, and we have five or six M.B.A.'s on staff now. We've hired people who have a sense of having to deliver value back to our partners. People who have M.B.A.'s take it for granted that there's got to be return on investment. That bleeds over into the rest of the organization in a very positive way.
With nonprofits struggling to retain talent, are you having more trouble recruiting recent college grads?
The biggest issue for a lot of [kids] is two parents who are saying, 'You know, you're not going to be able to support yourself.' I think the best that can be done is to give them evidence that there are organizations that are dealing with this in a more progressive fashion.
Do new grads still seem enthusiastic about working for nonprofits?
I do feel like there are really a lot of good people out there. I talked to the outgoing president of Wellesley College last year, and I asked who the biggest employer of Wellesley grads was, and it was Teach for America. I think it's at least the second or third biggest at Princeton and Dartmouth and half a dozen other big-name institutions. That's a remarkable statement and a really revealing statistic. That tells you something about what the mind-set of this generation is.