Nonprofit Leadership Development Is a Vital Ingredient for Social Change

Many economists say the U.S. economic recovery will stay in the slow lane until American companies finally step up capital spending on things like equipment and technology.

But corporate America is definitely opening up its wallet for one purpose: Spending on training and leadership development by U.S. companies grew by 15 percent in 2013, to more than $70-billion, according to a recent study. That followed two years of growth, at 10 percent or higher, in such spending in 2011 and 2012.

While business is investing in its people with renewed vigor, the nonprofit world continues to lag in making such investments. The Foundation Center recently reported that foundation support for leadership development was less than 1 percent of overall giving from 1992 to 2011. That’s not nearly enough.

We all know that programs and strategies don’t solve problems; people do. So why aren’t more foundations making leadership development an integral part of their grant-making strategies?

If we agree that strong leadership is crucial to the success of the nonprofits we support, what is keeping us from maximizing the impact of our funding by investing more in the skills and capabilities of people who lead organizations, including staff and board members?

At the Evelyn and Walter Haas, Jr. Fund, our trustees strongly support leadership development, based on their experience in both the corporate and philanthropic worlds and their intuitive understanding of the importance of investing in people.

We dedicate 10 to 12 percent of our annual grant making to strengthening leadership. Since 2005, the Haas Leadership Initiative has made mote than $18-million in multiyear grants to more than 100 nonprofits working in the fund’s priority areas of immigrant rights, education equity, and gay and lesbian rights.

We have seen time and again in our work how these investments have contributed to grantee impact and success.

Consider the case of the National Center for Lesbian Rights. Over five years, the center received $834,500 in support from the Haas, Jr. Fund, including $235,000 dedicated to strengthening the organization’s leadership.

The flexible, multiyear funding amounted to about $50,000 annually, which the center used for consulting, coaching, training, and other activities to build and strengthen its leadership.

Among the important results of this work is that the center, which previously relied on two overstretched leaders to run everything, was able to build a strong and collaborative senior staff team of five people

Relieved of many of the internal management responsibilities that had occupied so much of their time in years past, the organization’s executive director, Kate Kendell, and its legal director, Shannon Minter, have become even more powerful forces in the movement for marriage equality for same-sex couples. And the center is widely recognized as a critical player in the movement’s recent wins.

The National Center for Lesbian Rights is not an isolated case. An independent, five-year evaluation of the Haas, Jr. Fund’s early leadership investments showed that our support helped leaders get better results for their organizations and movements. The evaluation also showed that many of our leadership grantees were able to complete successful executive transitions and that they experienced impressive budget growth despite the economic recession.

Of course, we are not alone in supporting nonprofit leadership. Many other foundations around the country have made investing in leadership a top priority.

The Annie E. Casey Foundation, for example, works to develop current and emerging leaders in government agencies and nonprofit organizations serving children and families around the country. The reason: Casey knows that its goal of improving conditions for kids requires building the skills of people to work together to untangle complex problems.

The Blue Shield of California Foundation is building a stronger network of organizations that serve domestic-violence survivors by investing in individual and organizational leadership through its Strong Field Project. And the Durfee Foundation, based in the Los Angeles area, has created a multifaceted sabbatical program that strengthens the leadership of boards and senior teams while giving executives a chance to recharge and renew their commitment to their work.

These foundations are investing in leadership to advance their broader ambitions, and they are committing substantial grant-making resources to this work. While each foundation’s leadership-development approach is distinctive, they all share attributes that our experience suggests are important.

Chief among these is that leadership support is multiyear and is tailored to each organization’s priorities and needs; in other words, this is not about a foundation coming in and telling grantees what to do.

Nor is it simply about sending executive directors to one-time training sessions. Rather, it is about helping organizations identify and secure the leadership support they need at all levels so they can reach their broader goals.

I am not one who believes nonprofits and foundations should indiscriminately follow the strategic expertise of business. However, when the issue is leadership and talent, it’s worth taking a cue from the corporate world.

Unless we can figure out what is behind the nonprofit world’s chronic underinvestment in leadership and turn things around, we will continue to overlook one of the most important ingredients of positive social change. Investing in leadership doesn’t just deliver higher performance; it can also deliver a better, more equitable world.