Key Issues Facing The Nonprofit Sector

I have been doing a lot of thinking lately about some of the issues and problems that are impacting the non-profit sector across the United States. So, I thought this week I’d diverge from our regular weekly “tips” and share with you my thoughts on these key issues and problems that as leaders in the non-profit sector we need to address.

  1. The sector is new but it is the fastest growing sector in the U.S. economy. There are presently 1.4 million non-profit organizations in the United States generating over one trillion dollars. Non-profits comprise between 8-10 percent of the workforce across the nation. Because of how quickly it has grown, the sector is now suffering from a lack of standards and codes of conduct.
  2. Lack of standards – Because of the rapid growth we lack many of the standards other sectors work within. We call ourselves the ethical sector but we don’t have a set of standards or codes of conduct that are accepted by the sector. Unless we develop and agree upon these standards the government will intervene and provide them for us. This is what has happened to almost every other sector.
  3. Great credibility but lacks recognition – Non-profits comprise the most credible industry in the United States; people trust our sector. But we don’t have a lot of power and we don’t receive recognition when decisions are made. We need to market and promote the value of our sector and “position” our organizations as central elements of our communities.
  4. The sector is not unified. What does a homeless shelter in a small rural county have in common with the leading hospitals, universities, and art museums in other communities? Not much outside of the tax exemption that both receive. Our sector is very diverse and it is hard for us to agree upon a common agenda to move forward.
  5. Lack of leadership – This is key because nothing really happens without strong leadership. The non-profit sector is just now beginning to realize that regardless of who is funding our organizations the donors are counting on the leaders of the organizations to execute the programs and agendas. We have done a poor job in developing strong, independent, courageous, and ethical leadership in our sector.
  6. Weak in public policy – Our sector is extremely weak when it comes to active participation in public policy. Many non-profit executive directors are afraid to get engaged in the legislative process; others think they are prevented from mobilizing people because of their public dollars; still others don’t see a need to get active. Seventy-five percent of all dollars coming into the sector comes from public funding sources, so unless we become engaged and involved in public policy, we will continue to lose out when decisions are made that impact our sector.
  7. Succession planning – Many of our top non-profit leaders are in their fifties and sixties. We are not doing a good job at developing young leaders or looking at designing a succession strategy within our organizations. This needs to change.
  8. Diversity and inclusiveness – We are living in a global society; in most communities there is no majority population. Yet, non-profits fail to diversify their organizations and fail to understand the different cultures within their communities.
  9. We are training managers, not leaders. Leadership is the most talked about and least understood concept in our country. Most of the “leadership programs” that are available to non-profits are really just teaching people how to improve technical skills and set up systems rather than how to lead people and organizations.
  10. Lack of accountability is causing an erosion in the trust the American public has had for this sector. We need to be much more transparent and hold ourselves accountable to our donors, funders, board members, volunteers, community, and each other. We need to be publishing annual reports and welcoming scrutiny and discussion of issues that may feel uncomfortable.

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