You may ask, “Why non-for-profit leadership?” After all, leadership is leadership, right? The answer is Yes—and No.
The context and challenges of leadership in the non-for-profit sector are unique. The primary difference, traditionally, between for-profit and non-for-profit businesses is the bottom line. The for-profit leader keeps an eye on return on investment (ROI); she must answer to stockholders about her—and organisational—performance. The non-for-profit leader, though, has a double-bottom line to contend with—the return on mission (ROM) and the ROI on investments made by donors, foundations, and other resources. And in recent years, the nonprofit sector has been encouraged to be more “business-like” and efficient.
Today’s leaders must be visionaries, strategic thinkers, champions of change, entrepreneurial, and great communicators to accomplish either ROI or ROM. However, in addition to these abilities, the nonprofit leader must also be able to:
- build relationships inside and outside the organisation
- lead by influence
- act as a collective decision maker
- stay knowledgeable about their field and management tools.
The framework within which the non-for-profit leader functions is probably the greatest determinate of the skills and characteristics of the leader. Actually, the very structure of the non-for-profit organisation can somewhat limit the authority of the leader, the executive director (ED), or chief executive officer (CEO).
While the ED/CEO has full rein over the daily operations of the organisation, the final authority or approval lies with a Board of Directors, which is comprised of volunteers from the community who typically have other full-time jobs—and who also receive no financial compensation for their work on the Board. Nonetheless, the Board holds fiduciary responsibility for the organisation’s finance, overall program direction, and the mission. It also hires, reviews, and if necessary fires the ED/CEO.
It is within this framework that the non-for-profit leader builds relationships with staff, constituents, funders, and community stakeholders. Developing trust and credibility is critical to leading and motivating staff who deliver services to the organisation’s constituents. Relationships with members, donors, and funders also are built on trust and credibility.
In fact, the leader’s ability to lead through influence helps to determine the organisation’s position in the community. For instance, do community stakeholders look to the non-for-profit organisation as the expert and source of their specific need?
In addition to being the visionary, the holder of the big picture, the leader of change, and the voice of the organisation, the non-for-profit leader must always have the pulse of day-to-day operations. Most non-for-profit organisation leaders do not have the luxury of a full contingent of senior staff to delegate the operational responsibilities.
In the article, “Profiling the Nonprofit Leader of Tomorrow,” non-for-profit consultant Jean Crawford uses the term “manager-leader” to describe the competencies, traits, and expertise needed by an effective non-for-profit leader. Some of the competencies she cites include strategic thinker, entrepreneurial achiever, and inspiring motivator, as well as adaptability, perseverance, and passion for the mission.
Excellent Business Sense
Although people generally choose to work in the non-for-profit sector because they want make a difference, perhaps even change the world, a non-for-profit organisation is still a business. Therefore, the non-for-profit leader, as with most business leaders, must also exhibit financial acumen and be able to successfully raise money. In addition, to these management proficiencies, the non-for-profit leaders must also have a depth and breadth of knowledge and expertise in their field.
In other words, the non-for-profit leader must remain focused on the mission, but also appreciate the importance of the bottom line. They must consider: How does the organisation accomplish the mission? Provide services to their constituency at low or no fee rates? Lead the organisation? Lead in the non-for-profit community and stay financially stable?
Final word: the nonprofit leader must have passion, vision, direction, and business acumen to succeed.