It’s Called the Third Sector for a Reason

This month, a friend and colleague is stepping away from the senior-most role in a nonprofit organization after more than 30 years in the field, and he does not plan to pursue a similar role for his next chapter. I noted previously in this blog that several cohort members of a nonprofit leadership academy I facilitate indicated that they did not think leading a nonprofit organization was the right choice for them. And then, of course, we are all hearing about the “great resignation” where people are expected to step away from organizations in record numbers. Why should this matter to you, especially if you are not leading a nonprofit organization? For starters, the nonprofit sector constitutes the third largest workforce in the US. If you are not currently serving on a board or otherwise volunteering for a nonprofit, your life is undoubtedly enriched by the work of such organization — in supporting the needy in your community, engaging youth in experiential activities such as sports and scouting, participating in arts events and performances . . . the list goes on.

And here’s what I see as one of the biggest challenges nonprofits face: people often fail to recognize that nonprofit organizations function with a different set of rules and variables compared to public and private organizations (there is a reason we are called the Third Sector), and yet we are often held accountable to the expectations of the other two sectors. That makes the job of leading a nonprofit organization both harder and more nuanced than most people recognize. How, exactly, is the job harder and more nuanced that other leadership roles? I am so glad you asked!

I recently had the opportunity to conduct a national research study on “Aspects of Strategic Leadership Unique to Nonprofit Organizations.” I interviewed the senior-most nonprofit leaders of accredited nonprofit human service organizations from 10 different states throughout the US. The leaders were diverse in age, race and gender, and years of experience, and led organizations ranging in size from $3 million to $137 million. And yet, even with all of these differences, five clear areas emerged as being unique to leading a nonprofit organization:

  1. The mission/margin tension of multiple bottom lines;
  2. The diffused, influence-based power structure needed to respond to multiple stakeholders;
  3. The critical nature of the nonprofit leader/board relationship;
  4. The importance of strategic communication skills to build understanding and maintain mission alignment; and,
  5. The need to go beyond metrics to individual stories to convey mission impact.

In the coming weeks, I will dive into each of these unique variables in greater detail, not as an “oh poor us” sympathetic plea, but rather as a call to greater understanding of the unique variables and amazing work being done by nonprofit leaders throughout our country, and how you board member . . . volunteer . . . community leader . . . can better support them in their efforts.

I hope you’ll share your thoughts as we explore the nuances of leading in the Third Sector.

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