New Study Highlights Challenges Facing Nonprofit CEOs

Daring to Lead 2011, a new national study of nonprofit executive directors reports that a significant number of executives plan to leave their jobs within the next five years, citing frustration with their organizations’ shaky finances, under-performing boards of directors and the difficulty of maintaining healthy work-life balance in their demanding roles.

The study was conducted by San Francisco-based CompassPoint Nonprofit Services and the Meyer Foundation in Washington, DC. More than 3,000 executive directors responded to an online survey that asked executives about their career paths, likely tenure, their partnership with the board of directors, and the impact of the recession on their organizations. Meyer, CompassPoint, and other partner organizations – including foundations and management support organizations – distributed the survey to executive directors in eleven regions throughout the U.S. To supplement the survey, 70 executives participated in focus groups in San Francisco and Washington.

Daring to Lead 2011 is a follow-up to similar studies conducted in 2006 and 2001, in which three out of four executives said they planned to leave their jobs within five years. The number of respondents who said they were leaving in this study – 67% – is somewhat lower than in the two previous studies, with executives’ responses suggesting that the recession may have temporarily slowed executive departures. Nevertheless, a large majority of respondents continue to anticipate their departure within five years, making executive turnover and transition a significant ongoing concern for nonprofits, their boards, and other stakeholders.

Other significant findings:

  • Almost half of respondents (45%) said their boards had not reviewed their performance within the past year, and only 18% said that their performance review was useful.
  • Most respondents – 84% – reported negative organizational impact from the recession, with one in five reporting significant negative impact.
  • Nearly half of respondents (46%) said their organizations had operating reserves of less than three months of expenses, even though three months is the minimum level of reserves suggested by most experts.

The complete 20-page report can be downloaded at Three briefs – Leading Through a Recession, Inside the Executive Director Job and The Board Paradox – report additional findings and will be released over the next six weeks. The interactive Daring to Lead website includes information about methodology, executive director demographics and additional data.