Opinion: Why the unhappiness of nonprofit leaders matters

Recently, a friend emailed to tell me he was pulling out of the running to be the executive director of an important New York City nonprofit despite being one of the leading candidates. Not long after, another friend decided to leave her position running a small organization to take a deputy position in a larger agency.

What’s going on here? Why would talented, ambitious people voluntarily elect not to run a nonprofit organization? 

When I started in this field more than thirty years ago, many nonprofit CEOs were undercompensated and disrespected – it was assumed that the entire field of nonprofit management was benighted and backwards compared to business. Over the past generation, this has changed. Nonprofit executive compensation has improved dramatically (while, of course, still lagging well behind for-profit compensation). These days, nonprofit leaders are rarely admonished to run their organizations “like a business.” There is an increased understanding that nonprofit management presents unique challenges and that the allegedly brilliant achievements of many for-profit managers have been over-hyped.

Given all of this, you’d think we would be living through a golden era of nonprofit leadership. But that’s not the case. Indeed, many of the executive directors that I have spoken with in recent months confess that they dislike their jobs at the moment. And nearly every week brings news of a different executive director who has decided to step down, many well before their retirement years. (Full disclosure: I was one of this bunch, stepping down at the age of 53 from running the Center for Court Innovation.)

The troubles of the men and women with the corner offices may not be the most pressing issue facing the nonprofit sector at the moment; figuring out how to get paid in full by government for services rendered and how to improve the compensation of low-paid frontline workers are probably more important to the future of the sector. And many nonprofits, particularly in the arts, are struggling just to keep their doors open in the face of declining revenues. 

Nevertheless, the job satisfaction of nonprofit leaders matters. The no. 1 complaint I hear when I talk to nonprofit executives is that they are spending too much time on the care and feeding of their own staff – dealing with human resources, training, and internal communication issues –

and not enough time trying to achieve the actual goals of their respective organizations.

Some of this intensive focus on internal management is inevitable given the unprecedented demands of managing a once-in-a-lifetime global health crisis and the fallout from the killing of George Floyd and the subsequent racial justice protests that swept through many American organizations. But it is not sustainable over the long haul.

One of the primary advantages that nonprofits have over government and business is that they are supposed to be mission-driven organizations. They will pay an enormous price if they are perceived as being more concerned with the needs of their staff than the needs of their clients.

For an example of this phenomenon, look no further than the role that teachers unions have played in debates over school closings during the pandemic. The perception that these unions have been more focused on the needs of their members than on the education of the children in their charge may be leading to decreased public support for teachers unions. (It may also be contributing to the declining fortunes of the Democratic Party, which is closely aligned with teachers unions.)

Nonprofits would do well to get ahead of this problem. Public trust is fragile and should never be taken for granted. Getting back to normal operations isn’t just important to the happiness of nonprofit executives – it is crucial to the long-term health of the sector.