The Brain Drain in the Nonprofit Sector

We've known for years that there has been grumbling about the nonprofit sector. Among themselves, nonprofit professionals have confided in each other stories of abusive bosses, entitled and non-diverse boards, lack of vision, chaos, and dysfunction. Unfortunately, these rumblings are causing a brain drain in the industry.

If you follow discussions online or in media about the nonprofit sector, you’ll notice that there’s a rise in disenchantment. And at a time when more and more for-profit businesses are bringing in solutions through impact investing and social enterprises, for example, there are more opportunities for top talent to go elsewhere and still make a social impact.

Corporations and Innovative Charities Disrupt the Space

Sensibilities have changed, and there’s a public push to have corporations expand their profit-driven motives to support corporate social responsibility (CSR). There’s also a rethinking within the for-profit industry about how to become socially responsible. Some leaders discuss bringing on board people with social work skills to work on teams geared toward CSR.

Why are the shifts happening and the brain drain accelerating?

Because the nonprofit industry has had more than a century to get its act together and it still has a very long way to go. For example, the organization charity: water disrupts the space by paying its team members what they're worth by creating The Pool. However, most nonprofits continue to plod along with the status quo. Ultimately, people
see that better is possible, and they lean into CSR and nonprofits like charity: water.

Top Talent Leaves

There are several consistent reasons why talent is deciding to give up working in the sector and move to CSR programs or leading nonprofits that invest their resources, including salaries.

Lack of Living Wage

Of course, one of the top reasons that talent in the nonprofit industry is moving into CSR positions is money. Nonprofit boards, donors and executives have not invested in their teams or organizations. Moreover, if you look at social threads, you will realize people are working long hours, including weekends, for the opportunity to do meaningful work. However, money and a living wage matter to people, and more and more are unwilling to compromise.

Executives Pushing Boundaries

Another significant reason for top talent shifting to the private sector is that boundaries aren’t respected. There are countless stories of nonprofit leaders and boards expecting their teams to work nights, weekends and prepare things on the fly, not considering that people do (and should) have lives outside of their jobs. Personal boundaries, especially in the digital age, are not being respected, and talent is deciding to earn more and have more balance in their lives with for-profits or large nonprofits.

Lack of Meaningful Leadership

Unfortunately, many boards and nonprofit executives have little idea what a modern nonprofit should look like to thrive. For example, talent sees nonprofit boards that lack diversity or any lived experience. Executives have little vision, leadership or management skills, and because of it, they create spaces that are borderline abusive or dysfunctional. While top talent might be excited to become part of the organization, once they figure out the reality of the workplace, they’re looking for the next opportunity out the door.

Nonprofit Sector reinvention

The reality is that the nonprofit sector as a whole has a lot of issues. Too many nonprofits are led by people who don’t have experience or knowledge about entrepreneurship and business leadership. Yes, nonprofits are a business, just like any other kind of business.

Unfortunately, the sector has become a place for low expectations even though there’s so much to do to improve people’s lives. In short, what’s needed is a reinvention of the industry or a significant realignment. Perhaps it will come with a tremendous brain drain of talent into the for-profit sector working within corporations and institutions on their social responsibility programs.

Maybe it will come by more professionals leaning into becoming independent consultants for management, strategy and fundraising. Whatever happens, ultimately, the industry is ripe for a massive overhaul. It can’t continue with business as usual. The public, donors and top talent are tired of talking about social good, but the disfunction in the industry is ongoing.

Editor's Note: This article was originally published in the July/August 2021 print edition of NonProfit PRO. Click here to subscribe.