Most nonprofit professionals will agree that employee turnover has long been an issue for the industry. According to Forbes, the voluntary annual turnover rate in nonprofits is 19% — far outpacing the all-industry average of 12%.
And high turnover isn’t simply attributed to young employees new to the workforce - it’s also the executives who are leaving.
As part of a recent survey, I spoke with executive directors who reported on their job satisfaction. 51% of the interviewees left their role within 4 years. An eye opening realization is that executive directors are in positions that meet their career goals and interests - yet, many don’t stay in the role long-term.
This leadership churn is degrading nonprofits’ ability to do impactful, sustainable work. So why are leaders leaving? And can we influence their ability to stay?
A Closer Look: Positive, Purposeful or Dissatisfied?
When looking at why executive directors are leaving their roles, we can think about their departures as 2 categories: “positive and purposeful” and “dissatisfied.”
Of the executive directors I surveyed that left the position, 23% were for “positive and purposeful” reasons. These included:
Eagerly accepting a new position that aligned with their interests
Intentionally planning a leadership succession with their board
Completing a planned organizational sunset
Willingly departing after an organizational merger
On the other hand, 77% of interviewees departed with some level of dissatisfaction. Dissatisfaction - and ultimately departure - can arise because of both influenceable and non-controllable factors.
Before getting into these, it is important to note that not all executive directors should stay in the role. Poor hiring practices can lead to a candidate who is not the right fit for the work or the organization. Strategic differences may arise between the mission of the organization and a leader. Sometimes, an organization goes through a significant shift due to insurmountable financial challenges and a leadership position is eliminated. Or, a situational change in a leader’s life circumstances can catalyze their choice to leave their role.
In these types of situations, when the leader is able to move onto another role that better suits their skills and experiences, departures are best for both sides.
Reasons for Dissatisfied Departures:
Non-Controllable vs. Influenceable Factors
When executives depart dissatisfied, it’s helpful to consider why exactly they left their position. How much of this departure was their choice? And how much of it was due to factors that are truly out of their control? I like to categorize these as either non-controllable or influenceable factors leading to departure. Let’s dive deeper.
Non-controllable reasons for departure are those that cannot be significantly changed due to an individual’s effort, yet can have impact on job and organizational performance. A board or executive director has little ability to control these situations in advance; they can only choose how to respond to these situations when they arise. These include:
Personal life situation of a leader, such as:
Caretaking responsibilities that arise with aging parents or having a child
Global/societal situations and resulting challenges, such as:
A pandemic like COVID-19
An economic recession
The personal and organizational histories being brought to the role
Alternatively, influenceable reasons for departure are factors that the board and executive director can address and advocate for support around. These can oftentimes be identified during the hiring process and/or early on in tenure. With this lens, one can prepare to tackle these challenges in advance.
5 Influenceable Reasons for Dissatisfaction and How to Change Them
The former executive directors I interviewed helped shine a light on the top influenceable reasons for their departures. You’ll find these reasons below, with possible action items both executive directors and boards can take to address them in a sustainable manner.
1. Board of directors relationships
Board of director relationships are often one of the biggest conflict areas executive directors run into - especially if this is their first time as an executive director. Challenges can include low board support or mentorship, unclear board expectations, lack of transparency in hiring, or unclear strategic direction. I recommend that boards:
Invest time, energy and generosity into a strong board chair / executive director partnership.
Ensure a clear and agreed upon strategic direction for the organization
Create clear communication channels and procedures for board expectations, support and mentorship of the executive director
Audit the strengths and challenges of the organization and how they match up with the demonstrated skills of a prospective hire before offering the role
2. Financial Challenges
Financial challenges are consistently cited as one of the primary stressors of executive leaders in nonprofits. These can include everything from inherited fiscal challenges to a lack of confidence in fundraising. I recommend that boards:
Audit the organization’s financial health before hiring a new executive director and be transparent about challenges & strengths in the interview process
Practice fiscal responsibility through regular review and informed discussion of audits, financials and budgets
Seek out training and support for board and executive director to improve fundraising skills and techniques
3. Mental health
Mental health challenges are extremely common, and have come to the forefront of conversations in the past year. These can be wide ranging, and may include feeling isolated, being unhappy with work/life balance and being overwhelmed and unable to manage oneself. I recommend that all leaders:
4. Racial and social inequities
Navigating racial and social inequities is a consistent challenge many organizations have struggled to fully address with intention and clarity. Inequities may be present across the board, staff, leadership team, clients, and/or volunteers. I recommend that boards:
Publicly commit to engaging in tough conversations with candor
Share with all stakeholders how the process of listening, learning, and changing will be conducted and communicated
Create multiple and ongoing spaces for employees to give and receive feedback on their experiences, as well as ways to show the feedback has been understood.
5. Management concerns
HR and staff management can also be a persistent stressor for leaders. This includes managing organizational culture and insurmountable staff management concerns. I recommend that boards:
Provide clear expectations for an executive director. What does the board expect from them? And what do they expect from the board?
Ask questions and understand management challenges the executive director is facing. While board members should not be involved in HR matters, transparent conversations will lead to stronger support opportunities
Seek additional training for executives, such as working with an external leadership coach
Does It Make a Difference Why a Leader Chooses to Depart?
Understanding the key challenges that a leader faces and whether they are influenceable or non-controllable can shift how boards and executive directors respond to situations that arise during their tenure. This can reduce unplanned turnover by giving both boards and executive directors the tools to determine if the leader can be trained and supported to improve in the role, or clarity on why the leader is not a good fit for the organization.
There are four ways that understanding the challenges a leader faces are pivotal:
One: Hiring Discernment
Realizing the unique challenges a role entails helps executive directors make better decisions about which organizations they want to work at and where their skills can be best leveraged. Plus, it helps boards hire the best person for the job. As one of my survey participants stated,
“I could have used help in evaluating the opportunity on the front end before accepting the position. After I was in the role, I had some painful realizations about why I should have passed on that particular job and organization.”
Two: Personal Efficacy
Understanding whether or not a challenge is influenceable helps individuals gain a better understanding of how they can realistically increase their job satisfaction. For example, lack of experience in fundraising strategy is much easier to solve than an executive director who did not think fundraising was part of their job.
Three: Professional Development
Zeroing in on the key challenges a leader is facing and how they can influence them helps boards and executive directors identify training and support opportunities that can be leveraged most effectively.
For example, one of the interviewees I spoke with said, “What would I have wanted [from my board]? I would have wanted some clear measures of success. I don't think boards do a good job at actually performance management. There's not sufficient accountability. ” In this case, their board could have made an impact on this leader’s job satisfaction through intentional evaluation and communication practices.
Four: Transition Planning
If the board and executive director are realistic about what factors are influencing the leader’s dissatisfaction - and realize they are not influenceable - they can decide together to create a positive and purposeful departure that meets the needs of both the executive and the organization.
What Should Boards Do When Hiring?
The executive director position is a challenging role. We ask so much of these leaders and place a significant amount of organizational responsibility on their shoulders. As one of my interviewees brilliantly put it,
“We expect them to be all things - fundraiser and chief program developer, financial manager, HR expert. So the breadth of expertise that is expected is so broad, but there's not necessarily a learning path that helps to build the skills.”
Or stated differently, organizations often lack the structure needed to truly address the challenges facing leaders. But, we can do better.
To start, I recommend that boards consider these options when hiring a new executive director:
Intentionally strengthen the partnership between board chair & executive director
Provide leaders with coaching support
Train leaders on how to manage culture and staff
Ensure leaders are able to navigate inequities across racial and social lines - or have the resources to find support for this work
Create a clear succession plan and path from day one
Boards often have more influence than they think on executive director satisfaction. Executive directors also hold control over how they advocate, learn and improve in their work. By reflecting on and assessing what a leader needs to do their best work, the board and leader can both make more informed decisions about how to best support, train and hold themselves accountable to the work of the organization and the communities they serve.
Are you experiencing any of the challenges discussed in this blog post? Are you seeking a leadership coach for yourself or a nonprofit leader you work with? Please feel free to set up a 20-minute Zoom chat with me and we can talk through solutions together.