What Independent Sector Should Look For in a New CEO

When John Gardner and Brian O’Connell created Independent Sector in 1980, they envisioned a strong collective voice on such issues as government regulation of nonprofit organizations, the relationship between foundations and charities, and the future of the nonprofit world. But in recent years, the organization, made up of some 800 charities and foundations, has not lived up to its promise.

With last month’s announcement that Sara E. Meléndez will step down at year’s end after eight years as president, the board of Independent Sector has the opportunity to hire a new leader who could restore the organization to the stature and effectiveness intended by its founders.

In its early years, Independent Sector took strong stands on the federal budget, catalyzed the development of nonprofit research, promoted the growth of nonprofit studies at academic centers, and started a project on nonprofit leadership run by Mr. Gardner.

But Independent Sector’s influence has waned considerably since those early days, and its dynamism, vision, and quality of performance are gone.

Many nonprofit officials and observers are disappointed at the organization’s failures: its unwillingness to reach out to low-income constituencies, its weakness at dealing with questions of public accountability and relationships between grant makers and grantees, and its resistance to taking strong and principled stands on key public-policy matters.

A brief but important effort by Independent Sector proved the exception a few years ago. In leading the fight against an amendment proposed by U.S. Rep. Ernest J. Istook, an Oklahoma Republican, that sought to undermine the advocacy voice of nonprofit organizations, Independent Sector demonstrated its potential for productive action and leadership. Once the battle was won, however, the organization slipped back into mediocrity and equivocation.

In a nonprofit world that has become increasingly fragmented, challenged by the forces of commercialism and corporate values, in need of greater public accountability, and gasping for visionary leadership, an organization like Independent Sector has a vital role to play. It could be the catalyst for new ideas about how the nonprofit world prepares for the future, how donors and charities can relate more effectively with one another, and how government can better regulate the nonprofit field.

But to fulfill its promise, Independent Sector must gain new blood and energy. Its board and search committee, in recruiting the next leader, should have a clear idea of what they are looking for. The criteria should include the following:

• A keen understanding of the nonprofit world and a vision of its future. The new president should already be very familiar with both foundations and charities. It would be a big plus if the person had experience running a nonprofit organization. Perhaps the most important requirement should be a vision of where the nonprofit world should be headed, how it can overcome its many obstacles, and how nonprofit organizations can come together to think about those issues.
• Coalition-building skill. Independent Sector is widely viewed as an elitist organization representing the “big boys and girls” of the nonprofit world. Foundation and corporate executives make up half of its board, even though private and corporate grant makers constitute only a very small part of the nonprofit arena. Most of its members are large, established nonprofit organizations, because many of the smaller, less-established, and more activist groups don’t regard Independent Sector as sympathetic to their interests. To be effective, the new president must develop better relationships with labor unions, civil-rights organizations, and other groups. Independent Sector also must go beyond schmoozing with the other nonprofit umbrella groups or deferring to the Council on Foundations on matters related to grant makers.
• Strong moral leadership. The new president should have the resolve to help Independent Sector transcend the narrow self-interests of a trade association, pushing the organization to do what is in the public interest — even when some of its members may oppose such actions. Many nonprofit observers believe that Independent Sector has temporarily lost its moral compass. For example, the organization appears to have abandoned principle and pragmatic budgetary concerns in its fervent pursuit of a charitable deduction for taxpayers who don’t itemize on their federal tax returns. Independent Sector supported a controversial bill to help religious charities get government money just because the measure included the provision for donors who don’t itemize.
• Commitment to social and economic justice. The new president should be sensitive to social- and economic-justice concerns. They are an integral part of the mission of so many nonprofit organizations, not to mention the policies and practices of the federal, state, and local governments. Independent Sector’s outreach to organizations that serve low-income and working-class people, minorities, women, and disadvantaged youngsters has been limited at best. The organization has not spoken out forcefully on policy or legislative issues that threaten the well-being of such constituencies or nonprofit groups that serve them. In refusing until the last moment to take a position on the repeal of the estate tax, Independent Sector’s only major concern was the amount of money that would be lost to foundations and charities. It did not seem to worry about whether repeal might cost $60-billion a year in federal revenue — money that otherwise would go to domestic programs, many of them for needy people.
• Integrity and courage. The person selected to lead Independent Sector must have the integrity and courage to make tough decisions and to initiate efforts that may be controversial or unpopular with some of the organization’s leaders. If Independent Sector wants to exercise leadership on policy issues, it cannot be a consensus organization, catering to the lowest common denominator of its members. Decisions will not always be popular, but the president’s role will be to make certain that they are made and followed through. That will take courage. So too will projects and research that may go against the grain of certain member organizations. Exploring the role and practices of philanthropy, promoting public accountability among groups that are unsympathetic to such efforts, discussing more-effective government regulations, and assessing the pros and cons of encroaching commercialism are matters that are crucial to the future of the nonprofit world. They should be part of Independent Sector’s agenda.
• Policy savvy and experience. The new president should have a thorough understanding of public-policy processes at all levels of government and the requirements for effective lobbying. While probably not the primary lobbyist for the organization, the president should be skillful at articulating to legislators, regulators, and other nonprofit leaders Independent Sector’s positions and the needs of the nonprofit world. Some observers claim that a former member of Congress would be best suited to fill the president’s chair. But many former legislators have drawbacks that would undermine their ability to lead: enormous egos, lack of nonprofit experience, political partisanship, and an absence of courage. Many of the best policy makers, strategists, and lobbyists in Washington and elsewhere work for nonprofit organizations.

In the end, the decision of who will lead Independent Sector should be determined by the candidates’ strength of character, values, skills, and experience. Independent Sector cannot afford to have a president who lacks what John Seffrin, chairman of the organization’s board, has called “vision and gravitas.”

Not only must the new president be a first-rate leader, but the board also will have to do a better job than it has in the past. Many of Independent Sector’s recent problems stem from the indifference and lack of involvement of board members. A number of them have privately complained about Independent Sector activities or positions on policy matters, yet have done nothing to bring about change.

Similar charges can be leveled at Independent Sector’s member foundations and charities. Many remain uninvolved in the activities and policies of the organization. While a number may come to the annual meeting, most have left the business of the organization to a small group of board members. Revitalizing the membership and board should be the first priority of the new president.

The board and president also will need to make hard choices about the governance structure and staffing of the organization.

Independent Sector is at a crossroads in its history. It can either continue its lackluster performance or transform itself to meet the promise of its founders. Much will depend on the new president. Yogi Berra’s admonition, “when you come to a fork in the road, take it,” will not suffice. For all our sakes, Independent Sector will have to do much better than that.

Pablo Eisenberg is senior fellow at the Georgetown University Public Policy Institute and a member of the executive committee of the National Committee for Responsive Philanthropy. He is a regular contributor to these pages. His e-mail address is pseisenberg@erols.com