Changing of the Guard

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Illustration by Dean MacAdam

Boston—At the Harvard Business School, the crowd is pumped up. The mostly 20-something MBAs have come for the ninth annual Social Enterprise Conference, where Bono belts out “Beautiful Day” on a giant screen. Panels discuss topics like “Cause Marketing” and “Going to Scale.”

After lunch, almost everyone gathers to hear the finalists in the “Pitch for Change” contest, where teams give five-minute “elevator pitches” for new social ventures. The audience claps and hoots.

Nobody, however, hoots for any thrilling opportunities at existing nonprofits – you know, the ones that have been hard at work for years and need new blood.

That lack of interest epitomizes the leadership crisis facing many youth-serving agencies today. A changing of the guard is under way, as elder baby boomers head into retirement and many younger leaders move on for a plethora of reasons. Many of those leaving see behind them a dearth of leaders qualified to take their places.

Meanwhile, the hesitance among the “next-generation” or “emerging” leaders is detailed in a report, “Ready to Lead?,” released last month by the Annie E. Casey and the Meyer foundations, CompassPoint Nonprofit Services and That report – based on a national survey of almost 6,000 respondents drawn from Idealist and clients of CompassPoint – as well as Youth Today interviews with administrators at youth-serving nonprofits around the country, show some of what’s behind the dilemma:

• Only about one-third of the “Ready to Lead?” respondents said they’d like to eventually be executive directors. Of the 12 percent who said “definitely yes,” almost half wanted to start their own nonprofits.

• Many “next-gen” staffers don’t want to martyr themselves for the 24/7 grind of nonprofit youth work, especially at salaries below what they could make elsewhere.

• The term “next-generation” doesn’t necessarily mean Generation X or Generation Y. Some of the candidates to take over from retiring leaders are baby boomers themselves.

• Next-gen staffers complain about a lack of mentorship from the top, little help with networking, and a fear of constantly having to raise money if they become executive directors.

• As more founders retire from their agencies, many boards rely on search firms and people from outside their organizations to fill the top post, says Victoria Wagner, CEO of the Washington-based National Network for Youth. There’s “almost an aversion to hiring people who come up through the ranks,” she says.

But be careful: Declaring a crisis undercuts the innovations in leadership training that are bubbling up in the field and ignores the many applicants who are lining up for open positions.

“The creativity that came out of the Internet boom is the same creativity that we’ll see in the nonprofit sector,” says Marla Cornelius, a “Ready to Lead?” co-author and a projects director at CompassPoint, a San Francisco-based nonprofit managementconsultancy that runs capacity-building programs for other nonprofits.

Cornelius voices future leaders’ fears: “Am I going to have to cut programs and staff because I didn’t raise money?”

Cornelius, 39, claims the old guard doesn’t want a bunch of new organizations cropping up. “Funders don’t either,” she says. “Over the next five to 10 years, we’ll see a lot of organizations go away. It might be bumpy, but I’m not worried.”

Generational Differences

Underlying much of the talk about the leadership issue is a generation gap in perceptions and expectations.

Next-gen staffers tell stories about boomer founders who’d rather die at their desks than release control of their “babies.” The younger set, meanwhile, gets slapped for a lack of commitment to the task.

“If they want to go on a three-month trip to Nepal, they seem ready to put aside their caseload and take leave,” 71-year-old Peter Breen, retired executive director of Centerforce in San Rafael, Calif., said via e-mail.

Yet focusing on the hippie coots vs. the whiny kids masks the structural reasons behind the struggle to find new leaders.

One of the more troubling findings of “Ready to Lead?” is that many respondents said they were turned off by the sacrifices required of executive directors. Commongood Careers, a nonprofit search firm in Boston, recently polled its pool of 15,000 job candidates and turned up similar results. Seventy percent cited “salary levels” as their top concern, followed by “fears about burn-out or lack of work-life balance.”

Seventy percent of the Commongood respondents were white women; almost all had at least a bachelor’s degree. The “Ready to Lead?” sample was similar.

In both studies, the concerns about maintaining a healthy work/life balance mirror broader trends among middle-class workers in corporations, academia and public-sector jobs.

Williams: “We need diverse, qualified people for the communities they serve.”

Sam Cobbs, the 38-year-old executive director of First Place for Youth in Oakland, Calif., turned the job down when a headhunter first approached him. He was a middle manager at Larkin Street Youth Services in San Francisco at the time, and says being executive director “seemed to be the loneliest position in the world.”

Money Squeeze Crosses Generations

The salary problem affects both the old guard and its potential successors in ways that exacerbate the struggle to find new leaders.

“I can’t expect young people, especially if they are supporting families, to work for low wages and forgo benefits, or take the risks that I was able to take,” 77-year-old Felix Schwarz said via e-mail. Schwarz has been executive director of the Health Care Council of Orange County in Santa Ana, Calif., for 14 years. He could do that, he wrote, because “I had other income and retiree health insurance.”

“If you make these sacrifices, it’s easier if you come from a more affluent background,” says Adeola Oredola, the 27-year-old executive director of Youth in Action in Providence, R.I. Oredola says salary is one of her biggest concerns about staying with her nonprofit.

And if you didn’t help get the nonprofit off the ground, then taking below-market wages is even more distasteful. Replacing a founder/director is a story of its own, but one example speaks for others: At Urban Boatbuilders, based in St. Paul, Minn., Executive Director Dave Gagne laments that his salary is “very low.” He accepts it because in 1995 he co-founded the outfit, which runs wooden boat-building programs for at-risk boys.

Says Gagne, 63: “A new E.D. is going to need more income. My wife and I joke that we’re a recession waiting for a place to happen.”

At the same time, the specter of financial insecurity after retirement compels some boomers to stay at the helm longer, which might frustrate those looking to move into the top spot.

“I should leave in a couple of years,” says Rick Eaton, who since 2001 has been executive director of Sierra Service Project in Carmichael, Calif. The nonprofit runs summer service projects for Protestant youth groups.

Eaton: If he steps down, “How am I going to get health-care benefits?”

But if he leaves, the 53-year-old adds, “The biggest financial question for me next is: How am I going to get health-care benefits?”

For small youth-serving agencies, the salary struggle has implications from the bottom to the top. Sue Routson, founder and executive director of Peer Information Center for Teens in Richmond, Ind., wants “community foundations and other grantors to support personnel costs.” Routson, 65, said in an e-mail, “I could raise almost unlimited finds for ‘stuff.’ Our human contact program uses very little stuff. We have a terrible time getting money for salaries and FICA/Medicare. There are no benefits.”

One result, she said, is that “the talented ones move on. We can’t afford raises.”

The high staff turnover at youth-serving agencies has been widely blamed for affecting the quality of youth work. But it also affects leadership succession: If an agency can’t build up enough veteran staffers, it will have trouble grooming new leaders from within.

Nonprofit boards should share the blame for this with funders, says Tom McKenna, former CEO of Big Brothers Big Sisters of America. McKenna, who directs a nonprofit administration certificate program at the University of Pennsylvania, says, “If the pay is really lousy, that shows the board doesn’t respect the job.”

Where are the Mentors?

Generation X and Generation Y workers voice a lot of frustration about what they call the unsupportive “culture” of traditional nonprofits.

“Ready to Lead?” reports that only 4 percent of respondents felt they were being actively groomed to be the next executive directors in their organizations. On the other hand, many older executive directors interviewed for this story and in other reports beg to differ.

Erin Cox Weinberg, the 29-year-old vice president of field operations at Jumpstart’s national headquarters in Boston, thinks pushing for help by next-generation workers “rubs baby boomers the wrong way.” Because boomer founders had to figure it all out for themselves, she says, “mentorship sometimes seems like a handout or brain-dump.”

On the other hand, older leaders sometimes think the younger generations don’t want a lot of that kind of help. Jeannette Pai-Espinosa, 51-year-old president of the National Crittenton Foundation in Portland, Ore., mentors a network of about 80 next-generation leaders of color in her area. But Pai-Espinosa, who is Korean-American, laughs that “until these young people asked me to be their adviser, I looked at them as being so bright and so ambitious. I wasn’t quite sure they wanted mentorship.”

One of the biggest areas of need for potential successors is grappling with the fear of fundraising. Potential successors are often intimidated by the prospect of all that responsibility resting on one person’s shoulders. “Ready to Lead?” co-author Cornelius voices the concern this way: “Am I going to have to cut programs and staff because I didn’t raise money?”

Cornelius describes a recent three-day CompassPoint workshop for new leaders –“Management 101” – in which none of the participants could read a balance sheet. “If we don’t pay attention to their ability to run a business, they will fail,” she says.

Ken Williams, director of the Academy of Educational Development’s “New Voices” leadership fellowship program in Washington, stresses that mentoring is about more than financial tutoring. New Voices funds salaries and benefits for 15 emerging leaders a year and is underwritten by the Ford Foundation.

When it comes to finding new leaders, Williams says, “The bigger crisis is the competition for diverse talent. We don’t just need more people; we need diverse, qualified people for the communities they serve.”

At First Place for Youth, which runs programs for aging-out foster youth, Cobbs can vouch for the importance of guidance from veterans. Before finally taking the helm, Cobbs says he got “the thumbs-up” from the exiting co-founder, Amy Lemley. The other co-founder, Deanne Pearn, has remained as development director. He also received a grant from the Tipping Point Community in San Francisco to fund the leadership transition.

Cobbs had gained fundraising experience at Larkin Street, under the tutelage of former Executive Director Anne Stanton. She and others are on what Cobbs calls his “personal board of directors,” an informal group of mentors he consults. “I can ask her stupid questions, [such as] ‘When you go out to lunch with a funder, who pays the bill?’ Because sometimes that damn bill just sits there.”

Who Wins?

Back at the Harvard Business School, there’s a hush. All BlackBerry finger-tapping stills. Then comes the word: The first-prize winner in “Pitch for Change,” sponsored by the Omidyar Network, is … Global Citizen Year!

Applause thunders for the bright-eyed team. The MBA-credentialed creators want to send graduating high school students around the world to work on development projects. Their prize: $3,000. Their goal: Send 10,000 youths in the first year.

OK, it’s pretty much impossible. But at least these 20-somethings seem as enthusiastic and dream-filled, in a go-go, post-millennial kind of way, as did the budding leaders of the ’60s and ’70s.

The biggest generational difference, beyond style and music, appears to be career expectations. And that might not be insurmountable.

The fact that next-gen workers demand better working conditions should be cause for celebration. Entrepreneurial nonprofits like College Summit in Washington, D.C., are experimenting with different forms of compensation, such as issuing performance-based bonuses on top of base salary, for example.

It is likely that the young professionals who work for such “social capitalist” ventures as College Summit and Jumpstart will hop from job to job – nonprofit, corporate and public. They’ll build careers, if not loyalty to one organization.

Some believe the leadership crisis is not one of supply; it’s a matter of how existing nonprofit leaders approach the future of their agencies.

“People wring their hands, say everyone’s retiring. It’s a bunch of hooey,” McKenna says. “I don’t know of any strong organization that ever had a problem finding a successor.

“The problem is weak boards. The job of the executive director is not begging people for money. It’s setting up a structure to engage good people on your board.”

Maybe that’s what future leaders will learn through “New Voices,” which is also a contest, albeit without the flash of Bono on the screen at Harvard. The program gets 300 applicants a year for 15 spots, Williams notes. Most don’t come with master’s degrees. One fellow was a former death-row inmate in Missouri.

“These folks can really accomplish a lot, even if they’re not seasoned boomers,” Williams says. “I don’t think there’s a leadership crisis, because organizations will be forced to view life experience on a par with credentials.”

Martha Nichols is a veteran journalist who covers the work force for Youth Today under a grant from Cornerstones for Kids.