Nonprofit Leaders

‘Street credentials and management backgrounds: Careers of nonprofit executives in an evolving sector’ in Nonprofit and Voluntary Sector Quarterly 39 (4): 696-716

Review by guest contributor Hokyu Hwang

Not-for-profit organisations around the world are facing challenging times.

On the one hand, an impending leadership deficit looms large: the retirement of the Baby Boom Generation is expected to create a shortage of not-for-profit leaders.

On the other hand, the retreat of the welfare state and the subsequent marketisation of social services and growing competition from for-profit firms in the past few decades have put much pressure on these organisations to become more efficient and ‘businesslike’. These two challenges are likely to shape the future leadership of the not-for-profit sector.

Although mission remains the front and centre, in the changed environment of privatised welfare, the increasing inflow of for-profit management and business practices (such as strategic planning and performance and outcome measurement) has significantly transformed this once informal sector.

Not-for-profit organisations are increasingly being staffed and managed by individuals with professional pedigrees who have dense relationships with multiple stakeholders including funders, clients, regulators, volunteers and professional associations.

In this new context, not-for-profit organisations have become a main mechanism through which external resources and support find local causes, and nonprofit leaders need to be well versed in both management knowledge and the substantive issue areas (such as health care or education) within which they work.

This is a tall order, as these two sources of expertise may not always find peaceful coexistence. For instance: how does one capture and quantify improvement in children with special needs to show that an intervention for which one received funding was effective? Or how does one justify the value of experimental dance in financial terms? In other words, not-for-profit leaders are increasingly asked to translate and frame local, often idiosyncratic causes, into a more general, universal language of metrics.

How do not-for-profit leaders develop these different types of expertise?

While it is difficult to predict what the not-for-profit sector’s future leadership would look like, the profile of current leaders in this sector provides a good deal of insight into different types expertise and professional backgrounds represented in the sector’s leadership, different routes to not-for-profit leadership and – perhaps most importantly – what qualities are valued in not-for-profit leaders.

In this sense, David Suarez’s work on the careers of not-for-profit leaders provides a welcome glimpse into the professional and career backgrounds of these leaders.

To summarise briefly, Suarez found that there is a diversity of backgrounds and careers represented in the representative sample of nonprofit leaders he analysed.

Not-for-profit leaders in the San Francisco Bay Area in the United States are a highly credentialed bunch with many receiving post-graduate degrees in management and other substantive fields like education and counseling. Surprisingly, a significant number (60 per cent) had management experience in the public (government) and/or for-profit sectors. However, most executive directors were promoted to the current position internally (39 per cent) or recruited from another not-for-profit (24 per cent).

Some direct transitions from the public or for-profit sectors were cases of transferable skills, but other cases revealed more interesting twists. While these leaders came directly from other sectors, they somewhere along their careers built extensive experience in, and ties to, the sector.

Suarez concludes that while management expertise and cross-sector experience are useful resources for not-for-profit organisations and their leaders, ‘street credentials’ provide legitimacy for the sector’s executives.

This study does not debunk the rising importance of managerial skill and business experience in the evolving not-for-profit sector. Rather, it shows that not-for-profits are receptive to individuals with cross-sector experience and management expertise.

However, as mission-driven organisations, not-for-profits look for signals of commitment and dedication as reflected in their careers. While the changing external environment in which these organisations are expected to become more businesslike and efficient, as long as not-for-profit organisations are in the business of doing good, ‘street cred’ will always matter.

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