The “great resignation,” a term coined by Anthony Klotz, a Texas A&M University associate management professor, is permeating the nonprofit sector these days.  

According to the U.S. Department of Labor, during the months of April, May, and June 2021, a total of 11.5 million workers quit their jobs. A survey of over 30,000 workers conducted by Microsoft found that 41 percent are considering quitting; that number jumps to 54 percent when Gen-Z is considered alone. Gallup found that 48 percent of employees are actively searching for new opportunities. A quick Google Search shows a lot of the analysis of the resignations has been focused on the for-profit sector — though some savvy recruiters are positioning it as a great opportunity for those working in corporations or business to transfer to the nonprofit sector (that is a discussion for another time and place). The reality is – it is happening in our sector as well. 

Some transitions are happening because leaders who have been at the helm of nonprofits for a long time are retiring. Some are resigning, without any plans, simply burnt-out from what has transpired over the past 18 months, to potentially re-emerge at another a nonprofit (or as a consultant). Some are opting for a different lifestyle. No matter what the reason – it is happening and we need to think about the impact it is or will have.

This is not surprising when taken in context: for too long, Executive Directors have been required to do “much with little.” In 2009, the Stanford Social Innovation Review published “The Nonprofit Starvation Cycle” based on research done by the Bridgespan Group. They found that nonprofits are loath to spend money improving infrastructure or augmenting their management capacity because they don’t want to increase overhead spending. However, underfunding overhead can have disastrous results – one of which is the great loss of leadership following a crisis or series of crisis. Many of these executives have felt that they have seen their organizations through the worst of it. Indeed they have; and they have earned a special place in all our hearts. But if we do not learn from these resignations and fund our nonprofits as they need to be funded, we will be far worse than before the pandemic and ill-equipped to support the recovery that could take another decade. 

Meanwhile, nonprofits need to transition and there are some interesting models that have emerged:

• Strategic alliances, particularly mergers or acquisitions, is one such model. Before expending the time, effort and investment in new leadership – the board can consider merging with another organization or even being acquired which will strengthen both organizations’ purpose and mission? With any resignation or transition occurring today, this must be considered as a viable alternative
• Another option is bringing in an Interim Director as the Board considers its next steps. This allows things to slow down for the careful and deliberative process required before replacing and executive. This can be particularly helpful while considering a merger. It can also have a stabilizing effect while searching for new leadership
• It may also be a good time to take a new look on what leadership means. There are more nonprofits looking at dual, tri or even quadruple leadership models – meaning that the responsibility does not fall on one individual (see article below). Few nonprofits have a deep enough management bench to assume all the different responsibilities required of leadership. Usually the Executive Director is carrying the majority of the burden. Co-Executive leadership is emerging, with different variations. The simplest are the outward or inward facing model or the Artistic Director and Business Director; or the Managing Director and Clinical Director. While more costly than a single model, it is less costly than building a management bench. More important, it might just minimize the level of stress and burnout the majority of Executive Directors are facing today

Transitions are never easy – and the ones we are facing today are particularly difficult because of what has precipitated them. Transitions and resignations are a great time to take pause and ask: what is the most effective way to meet your nonprofits purpose and mission?

(If your nonprofit is working through a leadership transition, Danosky & Associates is available for consultation!)