From the issue dated March 9, 2006
Foundations Are Burning Out Charity CEOs
By Julie L. Rogers
Like well-meaning rich aunts, foundations are full of
advice for nonprofit organizations and their leaders. From positions of
relative financial security and isolated from the risks and challenges
confronting most nonprofit executive directors, foundation leaders and program
officers issue a constant stream of admonitions: Focus on finding dependable
sources of income. Produce measurable results. Evaluate whether you are making
a difference. Be strategic, not opportunistic. Build diverse boards. Spend more
time on advocacy. Collaborate with other organizations.
Because of the power differential between grant makers and
grant recipients, nonprofit executives are usually forced to nod in agreement,
to accept advice from foundations as wise, and to act on it. Too often,
communication is one-way: from the grant maker to the nonprofit executive.
Candid, two-way conversations are rare. As a result, foundations risk losing
the ability to listen — and to use their resources and influence to deal
with the stark everyday realities facing nonprofit organizations and their
A new study of 2,000 nonprofit executive directors,
conducted by my organization, the
Their answers are sobering.
Three-quarters of the executive directors plan to leave
their jobs within the next five years, and most don't want to be an executive
Many believe they have made a significant personal
financial sacrifice to lead a nonprofit organization. Most executives do not
have a strong strategic partnership with their boards of directors. They worry
that their management ranks are not strong or diverse enough to produce enough
leaders for the future, and they fear that the salaries and benefits their
organizations offer are too meager to attract the best people to the job.
Anxiety about raising money and financial sustainability
emerged as a theme throughout the survey responses. Executives cited fund raising and financial management as the aspects of their
jobs they enjoy least, and the skills they most need to develop. An
overwhelming number selected fund raising as the area in which improved board
performance would help them most.
For nonprofit veterans, this preoccupation with money won't
come as a surprise.
Most nonprofit groups are financed through a complex
patchwork of government grants and contracts, foundation grants, contributions
from individuals, revenue from special events, and fees and other revenue
charged for products and services that the organization provides. Each source
of income, and often each grant or contract, has its own special communication,
accounting, and reporting requirements, creating daunting challenges for even
the best executive directors. General operating support is scarce, and most
organizations operate without significant financial reserves that would help
them through temporary cash-flow problems and unexpected losses of grants,
donations, or other income.
What may surprise grant makers is the degree to which executive
directors cited foundations and other grant makers as a leading source of
frustration and fatigue.
Executive directors who participated in focus groups for
the "Daring to Lead" report were explicit in their criticism. They
were especially vocal about grant makers that require planning and evaluation,
but don't provide money for such efforts, and about foundations whose interests
and priorities shift every few years. They noted the difficulty of securing
support for organizations to keep providing key services because most
foundations prefer to finance new programs or want to see existing programs
taken "to scale."
Faced with such pointed criticism, grant makers may be
tempted not to listen at a moment when listening is critical. A growing number
of foundations and other nonprofit leaders are worried about the imminent
retirement of the baby-boom generation and the leadership deficit that may
Academic institutions, grant makers, and others are
starting efforts to build a pipeline of younger leaders who have the skills to
be effective executive directors. But such efforts amount to refilling a leaky
bucket unless grant makers also take steps to deal with the underlying
financial issues that undermine the leadership of many executive directors.
Foundations can play a pivotal role in changing the
dynamics that executive directors find so challenging. Among the approaches
grant makers should consider:
Of course, grant makers that urge nonprofit groups to
improve salaries and benefits need to offer grants at levels that can support
that goal. Artificially low limits on overhead and restricted grants that
support only direct services help create poorly managed organizations whose
executive directors are undersupported, overextended,
Finally, foundations can support executive directors by
continuing to listen. Many "Daring to Lead" survey respondents and
focus-group participants expressed gratitude for the opportunity to talk about
themselves and their roles.
Two-thirds of the executive directors felt that grant
makers had only a weak or modest understanding of what the executive director's
job entails. Conversations between executive directors and grant makers, if
they are candid and the relationship is trusting, offer opportunities for grant
makers to learn more about the executives' current challenges, watch for signs
of burnout, and discuss succession planning and leadership bench strength. In
turn, foundation leaders have the opportunity to be thoughtful and creative
about what forms of support they can offer executive directors.
Leading a nonprofit organization is
challenging even under the best circumstances. Executive directors are expected to be visionary leaders,
skilled internal managers, successful fund raisers, and convincing advocates.
The role requires knowledge about the nonprofit group's mission and skill in
running programs, financial acumen, and communications expertise.
Despite the challenges inherent in the role, thousands of
executive directors do the job well. Every day their organizations produce
amazing results, often with woefully inadequate resources. These leaders help
change lives and communities. They deserve recognition, respect, and attention
from grant makers. Ensuring that nonprofit groups continue to attract and retain
visionary and skilled leaders may require that grant makers do less talking and
more listening — and that they act more like supportive partners and less
like rich aunts.
Julie L. Rogers is president of the Eugene and Agnes E.
Meyer Foundation, in