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Leadership Gap Widens as Baby Boomers Retire

(April 28, 2009) Roughly a third of U.S. nonprofit organizations are looking to fill senior manager positions as of January, creating a steeper deficit in sector leadership than originally predicted.

A newly released Bridgespan Group survey of U.S. nonprofit executive directors shows that a leadership deficit forecast in 2006 may have widened last year. Meanwhile, in 2009, despite tightening budgets, nonprofits already foresee a need to fill 24,000 vacant or new roles in areas like finance and fundraising amid increasing management complexity and baby boomer retirements. 

The study also shows that bridging the leadership gap will call for recruiting beyond the sector.  Seventy-three percent of the survey’s 433 respondents affirmed they value private sector skills. Yet, despite a tide of corporate layoffs in the managerial ranks, 60 percent also believe they will face a scarcity of qualified candidates.

Key findings of the survey:

  • Top barriers to finding suitable leaders included compensation and difficulty finding executives with specialized skills, as well as competition for the same in-sector talent pool and lack of resources to find or cultivate new leaders.
  • Projected vacancies are largely the result of retirement, since much of the existing leadership is comprised of boomers. Vacancies also stem from new roles being created due to an increase in organizational complexity based on growth in prior years. The need is especially acute in human services and arts organizations.
  • The most important attributes recruiters are seeking not only include relevant experience but also “cultural fit” or shared passion for the mission (68% on average cite fit as a very important asset. That number climbs to 82 percent in the education field).
  • Job boards surpassed external networking for first place as a way to reach candidates, with 49 percent of organizations using job boards versus 44 percent using external networking to identify their candidates.

American Express commissioned Bridgespan to conduct the survey in order to determine the nature and dimensions of the evolving nonprofit leadership deficit, the training and development needs within the sector, and to look at how managerial skills from the business sector can boost leadership capacity among nonprofits. Respondents reported that actual senior job openings in 2008 were running at 77,000, or 43 percent above a leadership gap forecast in Bridgespan’s 2006 study “The Nonprofit Sector’s Leadership Deficit.”

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