Local Business

Nonprofits face challenge in filling top spots

CRYSTAL LAKE – Local nonprofits could face growing recruitment challenges as the economy improves and Baby Boomers retire.

This comes as social service agencies and charity organizations are serving more people than ever on smaller budgets.

Some McHenry County nonprofit groups have struggled in recent years to fill top leadership positions. It took the McHenry County Community Foundation 19 months to find an executive director after its previous leader was let go in January 2011. In the interim, a board member filled the position.

Other agencies have opted to hire executives from outside the area, including from other states. Last year, for example, Pioneer Center for Human Services brought president and CEO Patrick Maynard in from Cincinnati.

A shortage of funding for leadership training combined with higher expectations for executives and tight budgets that limit compensation may be partly responsible for some of the nonprofit community’s leadership challenges.

Local service organizations would be benefit from having more qualified executives, but the area doesn’t have a significant brain drain or talent drought, said Suzanne Hoban, executive director of Family Health Partnership Clinic in Woodstock.

“We have some very strong and highly talented leaders,” said Hoban, who has been instrumental in the county’s nonprofit community for many years. “But we’ll never have enough.”

Several area nonprofits are seeking candidates for senior management positions, including the Friends of McHenry County College Foundation and the Raue Center for the Arts.

Growth in employment and wages in the nonprofit sector has outpaced the business and government sectorts since 2008, according to a 2012 study from the Urban Institute. As the government and for-profit businesses and corporations shed jobs due to the recession and financial crisis, some workers migrated to the nonprofit industry.

Retaining those employees could become more difficult in the future, according to the 2013 Nonprofit Employment Trends Survey by Nonprofit HR Solutions, a human resources firm with offices in Washington, D.C., and Chicago.

“[Nonprofits] will face challenges ahead with the sector predicting a slow rise in turnover rates in the coming years as the economy improves,” the survey concluded. “Individual nonprofit organizations, and the sector as a whole, may begin to lose highly skilled and experienced employees in the years ahead.”

Demand for nonprofit services has been on the rise since the recession, but declines in donations and government funding have put additional pressures on many organizations. The nonprofit sector has long been at a disadvantage in attracting top talent, largely because it has been unable to match the pay available to leaders in business and government.

“Nonprofits remain focused on doing the most good so they want the best and the brightest, but it’s difficult because they don’t have the budgets and resources,” said Lindsay Nichols, a spokeswoman for GuideStar, an organization that provides information on the nonprofit industry. 

Nearly a third of the organizations surveyed by Nonprofit HR Solutions cited an inability to pay competitive salaries as their top obstacle to retaining employees.

“Compensation is a really big factor when it comes to finding qualified candidates,” said Robyn Ostrem, executive director of Big Brothers Big Sisters of McHenry County.

While the county has an “incredible talent pool,” Ostrem said it can be a struggle to connect the right people with the right organizations.

The expectations for nonprofit leaders has changed significantly in recent decades. Executives must be passionate about agency’s mission and possess the skills needed to raise money, balance budgets, and motivate volunteers. They also need to be more transparent about nonprofit finances than ever before.

“Every aspect of nonprofit leadership has changed in the last 15 years,” said Robin Doeden, executive director of McHenry County Community Foundation.

Nonprofit leaders are expected to be just as professional and polished as their colleagues in the for-profit sector, she added.

The McHenry County Community Foundation recently joined with a much larger nonprofit organization, the Chicago Community Trust. Having the trust’s back-office staff to handle administrative tasks such as payroll and accounting enables the local foundation’s staff to spend more time on projects in McHenry County, Doeden said.

Such collaboration could become more common in the future. As could the use of temporary employees and consultants, according to the 2013 Nonprofit Employment Trends Survey.

The hurdles are even higher for smaller nonprofit groups with smaller budgets, said Steve Otten executive director of United Way of Greater McHenry County. Even so, Otten said the county’s nonprofit community remains strong.

“I’ve been really impressed with the leadership of the United Way’s partner agencies,” he said. “McHenry County is truly blessed.”

Nonetheless, the community could do more to cultivate future nonprofit executives as a today’s veteran leaders prepare to retire.

Hoban challenged philanthropists and donors to consider helping charitable organizations by giving them money for training and leadership development.

“We need to educate people about the need for that kind of funding,” she said.

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