Investing in Nonprofit Talent—It's Not Overhead, It's Essential

As I talk to nonprofit executives, I am continually reminded by how tough it is to lead a nonprofit organization in today’s environment. The findings of a survey (see below) by CompassPoint Nonprofit Services, the Annie E. Casey Foundation, and the Meyer Foundation of 6,000 next generation nonprofit leaders released last week further underscore these challenges. Ready to Lead? Next Generation Leaders Speak Out portends a serious leadership crisis within the nonprofit sector. Baby boomers are retiring and emerging leaders are thinking twice about filling the void, citing crushing workloads, low salaries, and a lack of career progression. Executive directors are burning out and heading for personal greener pastures in the private sector and government where they can find higher pay and more comfortable lifestyles. And this talent shortage becomes even more acute when you look at the relatively small numbers of nonprofit executives and board members from diverse ethnic and racial backgrounds. More »

"KICKING IT" Screened for VPP Audience

More than 125 VPP Investors and friends, including Washington, DC’s Mayor Adrian Fenty, came together last month at the National Geographic Society for a private screening of Kicking It, a film produced by VPP Investor and filmanthropist Ted Leonsis. More»

Investing in Nonprofit Talent—It's Not Overhead, It's Essential

As I talk to nonprofit executives, I am continually reminded by how tough it is to lead a nonprofit organization in today’s environment. The findings of a survey (see below) by CompassPoint Nonprofit Services, the Annie E. Casey Foundation, and the Meyer Foundation of 6,000 next generation nonprofit leaders released last week further underscore these challenges. Ready to Lead? Next Generation Leaders Speak Out portends a serious leadership crisis within the nonprofit sector. Baby boomers are retiring and emerging leaders are thinking twice about filling the void, citing crushing workloads, low salaries, and a lack of career progression. Executive directors are burning out and heading for personal greener pastures in the private sector and government where they can find higher pay and more comfortable lifestyles. And this talent shortage becomes even more acute when you look at the relatively small numbers of nonprofit executives and board members from diverse ethnic and racial backgrounds.

We can throw up our hands in a panic or we can find ways to attack the crisis head on. One place where we might look for some solutions is corporate America. There has been a great deal of debate and angst within the nonprofit sector about the merits of applying business management practices in the nonprofit sector. To be sure, these practices don’t always translate. However, when it comes to recruiting and retaining top talent, the private sector has some valuable lessons for nonprofits. All of us—funders and nonprofit executives and Boards alike—would do well to heed some of them.

The first and perhaps most important lesson is that it is important for organizations to make investments in recruiting and retaining talent. Talent is the secret sauce in making any enterprise—whether for-profit or not—effective. To paraphrase Jim Collins, author of Good to Great, you have to have the right people on the bus, and, once you do, they will figure out where and how to drive it. With the wrong people, you just can’t go very far.

Finding and keeping good people is no accident. Private sector businesses take great pains to do so and invest substantial funds in hiring recruiters, creating human resource departments that not only lead and support recruitment efforts but also oversee retention programs including benefits, training, and so on. It’s an ongoing process and it takes a dedicated and consistent effort to manage this process. Many nonprofits often don’t have even one dedicated human resource professional to focus on these important activities. Sometimes the Executive Director or other staff without proper human resources training and experiences take on these responsibilities in addition to their other work. Adding this capability is often seen by funders and nonprofits themselves as “overhead” and detracting from program work. The philanthropic sector must support nonprofits in building the infrastructure needed to manage these activities.

Second, corporate America offers a wide variety of training to help employees develop and enhance their skills so that they continually learn and grow. Few nonprofits offer regular training. To be sure, cost and time are factors that inhibit the development of nonprofit training programs. But the cost of losing good people is even higher.

Third, the private sector has created very effective mentorship programs where junior-level employees are paired with more experienced employees to learn specific skills, to help prepare them for leadership roles, and to help guide them through the organization culture. Nonprofits would be well served by creating mentorship programs.

Fourth, private sector businesses have created incentive programs such as bonuses and merit increases and offer other benefits to reward and motivate high-performing employees to move forward. The survey found that nonprofits are well behind business in creating these programs and many times the culture of nonprofits discourages people from asking for more money. Those who do are often made to feel less committed to the cause. The reality for many younger workers is that they have substantial student loans to pay off while struggling to keep up with rising costs of living. They can’t pay the rent from their cause. And longer-term employees have made significant sacrifices for years and are now concerned about retirement.

Fifth, while far from perfect, corporate America is by far more diverse than the nonprofit sector. Corporations like Marriott and IBM not only have HR departments but also have senior staff whose sole purpose is to figure out how to create and nurture a more diverse workforce. As private sector business and nonprofits alike face a shortage of workers due to a smaller number of next generation employees, no one can afford not to create a diverse workforce. The private sector responds to customer demands. As their customer base has become increasingly diverse, they have become diverse as well. For nonprofits, diversity is even more important. At a time when racial and ethnic minorities represent a fast growing segment of our population, nonprofit organizations haven’t made enough progress in creating executive management teams and boards that represent the communities they are serving.

The challenge isn’t that there aren’t enough leaders of color—rather, it is connecting this leadership talent with the nonprofits who need it. Business has gone to great lengths to build networks where it can connect with diverse populations. That is why senior corporate executives every year log frequent flier miles visiting colleges and universities, reaching out to professional societies in search of diverse and talented individuals. The nonprofit sector should emulate some of these tactics, and funders should invest in helping nonprofits undertake these kind of initiatives.

All of this is why I am very proud of VPP for helping to create the African American Nonprofit Network (AANN). AANN is a 501(c)(3) nonprofit organization dedicated to increasing the representation of African Americans in leadership and advisory positions within the nonprofit sector of the National Capital Region, particularly in organizations that serve children, youth, and families. Since 2006, VPP has invested $500,000 plus strategic assistance to launch and grow AANN. Last month, Maxine Baker, who headed Freddie Mac’s corporate philanthropy efforts for more than a decade, came out of retirement to join AANN as Executive Director (see below). All of us at VPP hope that AANN will serve as a model and inspiration for others to create networks to bring more diverse talent into the sector. In its short history, AANN has demonstrated the viability of its model. It has grown from a group of 10 volunteers to now include almost 30 core members who are local and national leaders with experience in both the nonprofit and for-profit sectors. It has already sourced several African Americans into senior leadership positions in nonprofit organizations in the National Capital Region and helped source 20 African Americans who now serve on nonprofit boards in the Region. It has also developed a base of approximately 1,000 active participants that continues to grow. AANN has also made connections to search firms, nonprofits, and affinity groups.

The “Ready to Lead” report should be a wake-up call for all of us, including funders. The bottom line is that attitudes within and outside the nonprofit sector have to change. As the report noted, we tend to undervalue nonprofit work and the people who do it. Corporate America has long realized that to make money you need to invest money. If our nonprofit sector is to thrive, we must invest in people and give them the support they need to do the good work that they want to do and from which we, as a society, derive great benefit. As VPP has learned, investments in building the infrastructure of nonprofits are critical to their survival and increasing the results for the communities they serve. It take more money and time to build strong, effective, and sustainable nonprofit organizations then most are willing to dedicate. This isn’t overhead—it’s essential to make sure that nonprofits can deliver on their missions.

- Carol Thompson Cole

"Kicking It" Screened for VPP Audience

More than 125 VPP Investors and friends, including Washington, DC’s Mayor Adrian Fenty, came together last month at the National Geographic Society for a private screening of Kicking It, a film produced by VPP Investor and filmanthropist Ted Leonsis. The documentary, directed by Emmy-Award winning Susan Koch, and narrated by actor Colin Farrell, follows seven soccer players from Afghanistan, Kenya, Ireland, Spain, Russia, and the U.S. who compete in the 4th Annual Homeless World Cup, held in Cape Town, South Africa.
Mayor Adrian Fenty and Mario Morino at the Kicking It screening at National Geographic.

“Soccer is the world's most popular sport and played in virtually every country around the globe, while homelessness is one of the world's most pervasive problems," said Koch. "When you bring the two together, lives can be transformed. We found extraordinary people who for the first time were given the chance to stand tall and not be invisible.”

Following the screening, Leonsis and Koch led a discussion about filmanthropy and the making of the movie, which Leonsis describes as "Rocky meets The Fisher King." He told the story of how the Executive Producers, which include VPP Investors Jack Davies, Mark Ein, Raul Fernandez, Nigel Morris, Russ Ramsey and Doug Smith, came together in less than 24 hours in response to an email Ted sent offering the opportunity to lend their financial support and marketing talents to ensure that this inspiring story about the power of sports to change lives was shared broadly. The film will be shown in theaters this summer and later this year on ESPN, which bought the television distribution rights at Sundance.

Leonsis coined the term filmanthropy at last year’s Sundance Film Festival, where his first documentary, “Nanking”, won a major award for editing. He was recently quoted on filmanthropy in an article in Time, "Filmanthropy changes the metrics of measurement from box office and revenues to number of volunteers and amount of money raised.”

Earlier this month, Teatro Goldoni hosted a second screening of the film for VPP investors and friends. This event was generously sponsored by Washington Life magazine (whose President and CEO, Soroush Shehabi was one of the film’s Executive Producers) and JP Morgan, who sponsored the first screening as well.

Said VPP President and CEO Carol Thompson Cole, “We are very grateful to Susan Koch and Ted Leonsis for sharing their uplifting film with VPP’s investor community. Kicking It demonstrates what happens when a small group of great people come together to shine a light on social issues. I am hopeful that others who see the film through ESPN or in theatres will be compelled to action, whether funding a pitch or one of the Homeless World Cup teams through Global Giving, or even just changing the way they view those in need throughout the world and in their own communities.”

In2Books Featured in New York Times

VPP Founding Investors Miles Gilburne and Nina Zolt were featured in a recent New York Times article about their work with ePals and the small but growing trend of nonprofits morphing into profit-making ventures with social change goals.

A Capitalist Jolt for Charity describes the transformation of In2Books, the curriculum-based online mentoring program created by Zolt and Gilburne, into a worldwide collaborative enterprise. The In2Books program, created in 1997 in close consultation with leading literacy experts, was used extensively in Washington, DC schools and has shown to significantly improve students' standardized test scores as it enhances reading comprehension, critical thinking and writing skills.

In late 2006, with the support of angel investors, including Revolution Chairman and VPP Investor Steve Case, In2Books bought a for-profit company, ePals Inc., to expand on the organization’s mission to support lifelong learning through collaborative online experiences that empower and inspire. The ePals company has since grown to become the Internet’s leading global learning community, reaching more than 13 million educators and students across 200 countries and territories with its e-mail, blogs, online literacy tools and Web-based collaborative projects. Said Gilburne, “This needs to be a large business to have a really significant social impact. We couldn’t do what we’re doing as a nonprofit.”

The article also mentions ePals’ recently announced strategic partnership with National Geographic Ventures that will enhance the ePals site with National Geographic content to create unique learning experiences for classrooms, students and families around the globe. In addition, ePals announced a partnership with Intel that will make ePals connectivity tools and curricula the first educational application on Intel's classmate PC, the affordable laptop computer for students in emerging markets. See the full press release on ePal's site for more information.

CentroNía: Embracing Diversity

Editor’s Note: CentroNía Chief Academic Office Eileen Wasow writes a guest column regarding the organization’s commitment to diversity and how they “walk the walk” of that commitment.

I’ve always valued working in diverse organizations. But when I moved to CentroNía, “diversity” took on new meaning for me. Diversity here is more than just the rhetoric of race, gender, class, religion, disability, or language. It is a lived experience that challenges one’s notions of cultural competence on a daily basis. To the outside world, CentroNía is often perceived as a Latino organization. But one has only to walk the halls, or to sit as I did last night in a parent meeting, to get a sense of the rich diversity that CentroNía now claims. The CentroNía workforce of 200 staff represents more than 25 countries. The parent body speaks more than a dozen different languages. I observed a three-year-old just the other day, whose first language is Arabic. He shifted easily from one teacher to another using English and then Spanish, confident in his knowledge that each of them would respond and understand him.

Diversity on this scale doesn’t happen overnight or by accident. It is embedded in the organization’s core values of respect and commitment to equity, access, and social justice. The fight for this kind of diversity starts with the organization’s leadership. Beatriz (BB) Otero, CentroNía’s President and CEO, often tells the stories of how she met the first members of her staff 20 years ago, in the streets or stores of DC. When she saw that spark and love for children in potential staff members’ eyes, she would invite them back to CentroNía (then known as Calvary Bilingual Multicultural Learning Center) to find a place for them in her fledgling community organization. This belief in people’s potential, to see their strengths and possibilities, is at the heart of BB’s vision for CentroNía. These issues of access and building professional pathways are especially critical in a community where a number of the young staff members are new to professional roles and responsibilities and where some staff members, who are immigrants from other countries, find themselves working in professions quite distant from the ones in which they might have originally been trained.

BB started by creating a welcoming and safe environment for the diverse staff that CentroNía recruited from the community. The mantra “we are who we serve” became an organizational reality. Another proverbial phrase that has helped the organization’s commitment to diversity is “grow your own.” We often found that no one was going to create for us the culturally competent, bilingual staff we needed, so indeed, we grew our own staff from within the Center and the community. Two key components that have also strengthened this approach have been mentoring and a commitment to life-long learning at all levels of the organization.

Over the years, the outcomes to this approach have yielded an impressive harvest. Seventy-five percent of our youngest staff (18- to 24-year-olds) who grew up at CentroNía are enrolled in college and building the next generation of leadership in the organization. One hundred percent of the coordinator-level staff understand CentroNía’s deep commitment to diversity and provide role models for all, while incorporating diverse views and voices in all aspects of their work. And staff at the leading edge of the organization, who stay with us three to five years, take these diversity skills and competencies with them, when they move to other community-based or, more often, national organizations in the city, thus building stronger networks of cultural competence, wherever they go.

When CentroNía created its strategic plan four years ago with VPP’s support, we stated that we would recruit and retain an outstanding diverse staff and that we would strive to become an employer of choice for staff who shared our core values and diversity goals. When I look at staff today, I am proud to say I think we met our goal!

- Eileen Wasow

Management Changes

Maxine Baker to Lead African American Nonprofit Network

Maxine B. Baker, the leader of Freddie Mac's philanthropic and community relations programs for 10 years, has come out of retirement to head the African American Nonprofit Network (AANN).

"Maxine brings a strong record of achievement, deep connections in the business, nonprofit and philanthropic communities here and around the country. She also has a passionate commitment to strengthening the region's nonprofits by increasing the number of African Americans in leadership positions." said Ike Fields, AANN's Chairman of the Board. "The entire Board is delighted with Maxine's decision to lead the organization and knows that the leadership she provided as the Vice Chair of the Board will continue in her new role." She succeeds Wanda Pierce whose leadership enabled AANN to move from an idea to reality.

VPP played a critical role in creating the African American Nonprofit Network. There is an acute shortage of African American management and leadership talent in the nonprofit sector, especially in organizations serving children, youth, and families. AANN focuses on creating access to qualified African American candidates for management and leadership positions as well as to serve on Boards and as advisors.

"We believe that VPP's support of AANN furthers our mission to strengthen nonprofit organizations serving children and families in our region. There is a lack of diversity within the leadership of the nonprofit sector. AANN efforts will help to create a diverse management base giving nonprofits the ability to better understand and address the needs of the multicultural children, youth and families they serve," said Carol Thompson Cole, President and CEO of Venture Philanthropy Partners.

"It is our strong desire that the African American Nonprofit Network will not only have an impact in the National Capital Region but will also provide a model for others around the country to learn from in addressing the vital need to increase the number of African Americans in leadership positions in nonprofit organizations, " said Mario Morino, Chairman of Venture Philanthropy Partners.

Board Changes

Mary MacPherson Assumes Chair Role for Mary’s Center
Thanks to Lyda Vanegas, Advocacy and Communications Officer, for this update.

Mary MacPherson, a technology industry executive with a background in both technology businesses and the nonprofit community, assumes the role of Board Chair of Mary’s Center’s Board of Directors effective immediately. Although new to the Chair position, MacPherson is not new to Mary’s Center. She became a member of Mary’s Center’s Board in 2005 and previously held the position of Board Secretary.

MacPherson is a recognized expert in entrepreneurship and early stage company formation and growth and has extensive experience in management, technology marketing, and business development. In recent years she has been recognized by Women in Technology and the March of Dimes as a Heroine of Technology. In 2001, Washingtonian Magazine named her one of the 100 Most Powerful Women in Washington.

During her career, MacPherson has worked in startups and established companies in a variety of marketing and senior management roles, including Apple Computer, MCI Telecommunications Corp. and Blackboard, Inc. From 1998 to 2003, she served as Executive Director of Netpreneur.org, a program of the Morino Institute and Greater Washington's community of early stage entrepreneurs and their stakeholders.

In 2004, MacPherson started M2Works LLC, an independent consultancy, and her practice includes engagements in the areas of entrepreneurship and entrepreneurial networks, capacity building, sustainability, governance, and community building.

MacPherson is on the National Capital Advisory Board for College Summit, and, in 2007, she received a Presidential appointment to serve on the Board of the Czech Slovak American Enterprise Fund. For MindShare, a network of over 400 CEOs of entrepreneurial companies, she leads Alumni Network activities for the Organizing Board. MacPherson advises companies including Network Alliance and eKnow and nonprofits including the National Foundation for Teaching Entrepreneurship (DC Chapter) and Netpreneur.org. She is a member of Women in Technology and the Potomac Officers Club.

“Mary’s tenacity and leadership are two of the many gifts she has to take Mary’s Center to the next level,” says Guadalupe Pacheco, MC Board Chair predecessor. “Mary’s Center’s Board is in the best hands.”

Awards & Recognition

CFNC Honored by Northern Virginia Magazine and WETA
Thanks to Eric Boven, Development Manager, for this update.

Northern Virginia Magazine selected CFNC as one of the top preschools in the region. Their description of CFNC begins: “It’s hard to argue with a preschool program that shows twice the student gains of other programs, especially when that program serves low-income families.”

In making its selections, the magazine interviewed experts, parents, and teachers. It also evaluated curriculum, staff qualifications, safety, parent communication, and behavior management. Above all, it “…looked for that important duality of caring for children while nurturing learning and development…”

CFNC provides its early childhood education services free-of-charge to parents, while some preschools in the area command tuitions as high as $18,000 per year.

WETA named Barbara Fox Mason, CFNC’s Executive Director, as their February 2008 Hometown Hero. Hometown Heroes is an Emmy Award-winning project that heralds individuals who improve their communities.

WETA selected Mason for “…her strong dedication to the education of underprivileged children in Northern Virginia” and a 90-second video highlights Mason’s leadership in growing CFNC from “…a preschool of only six students to a multimillion dollar organization that helps and encourages entire families.”

LAYC and its Youth Honored
Thanks to Lori Kaplan, Executive Director, for this update.

As they make a successful transition to young adulthood, youth at LAYC receive awards and recognition for their efforts to overcome obstacles, including:
• Five high school students enrolled in LAYC educational programs are recipients of New Futures scholarships. These multi-year awards of $8,000 per year will allow youth to pursue post-secondary educational opportunities.
• Three students from MacFarland Middle School studying computer literacy at LAYC passed the Microsoft Word 2003 Microsoft Office Specialist (MOS) exam, which is usually not conquered by learners until they are in their twenties.
• New businesses moving into Columbia Heights are hiring LAYC youth. After a rigorous interview process, 21 youth are ready to begin work at the first Target to open in DC.

Organizational honors and recognition include:
• The Washington Tennis Association awarded its Organization of the Year to LAYC’s Pancho Gonzalez Youth Tennis Academy, which provides in-school and summer tennis instruction to elementary and middle-school youth.
• The Maryland Governor’s Commission on Hispanic Affairs named Luisa Montero, Maryland Multicultural Youth Centers’ Managing Director, and Ricardo Flores, LAYC Director of Advocacy, as members.

Announcements of Note

AALEAD Celebrates Lunar New Year
Thanks to Rick Chen, Development Associate, for this update.

AALEAD recently celebrated its Ninth Annual Dinner fundraiser on February 8, 2008, which coincided with the Asian Lunar New Year. The theme for the event was “Moving Toward Our Dreams” and local community leaders such as Montgomery County Executive Ike Leggett, representatives from Senator Barbara Mikulski’s office and DC Mayor Adrian Fenty’s office, and several corporate sponsors. A six-course banquet satisfied the appetites of about 400 hungry guests. The evening ended with student performances including a traditional Dragon Dance, violin pieces, and speeches.

Ready to Lead? Report Surveys Emerging Nonprofit Leaders

A skilled, committed, and diverse pool of next generation leaders would like to be nonprofit executive directors in the future, according to a new national survey of nearly 6,000 next generation leaders. However, the survey also finds that there are significant barriers: work-life balance, insufficient life-long earning potential, lack of mentorship and overwhelming fundraising responsibilities which may prevent many younger nonprofit staff from becoming executives.

The survey, Ready to Lead? Next Generation Leaders Speak Out, is the largest national survey to date of emerging nonprofit leaders and was produced by the Meyer Foundation in partnership with CompassPoint Nonprofit Services, The Annie E. Casey Foundation, and Idealist.org.

Key Findings
• Salaries and actual or perceived insufficiency in earning potential are barriers to executive leadership (69% of respondents feel underpaid in their current positions and 64% have financial concerns about committing to a career in the nonprofit sector)
• A higher percentage of respondents who definitely aspire to become executive directors are people of color
• The nonprofit sector is viewed as desirable by people interested in social change
• Most respondents working in the nonprofit sector feel that their work is meaningful and satisfying
• Only one-third of those surveyed have aspirations of becoming executive directors
• Of those who aspire to become executive directors, 40% reported that they are ready either now or within five years
• Lack of mentorship and support from current executive directors in helping to pave a career path is a source of frustration (only 4% of nonprofit staff are explicitly being groomed to become their organization’s leader. Women are being developed as leaders at a lower rate than men).

The report has already received coverage in US News and World Report, the Washington Post, the Baltimore Examiner, and the Chronicle of Philanthropy.

Blog Offers Emerging Leader's Point of View

Rosetta Thurman's blog, Perspectives From the Pipeline, explores nonprofit leadership and organizational issues and shares resources and ideas that might inspire and help others in their work. Her goal is to "bridge the gap between challenges and solutions within the nonprofit sector, especially as they relate to the younger workforce and nonprofit leaders of color."