Preparing for a changing of the guard: Leadership in the not-for-profit sector
1 July 2021 at 7:00 am
Given the importance our sector plays in the health of communities, governments, not for profits and funders need to work together to ensure the next generation are not just ready to lead but ready to excel at leading, writes Bruce Argyle.
Generational change and the consequences of Australia’s ageing population are both hot topics, especially among not for profits. Many worry the ageing of Australia’s traditional donor base will drastically shrink donations – a key source of income for the nation’s more than 52,000 charities. Some also worry there will be greater demand on services as the country’s tax base decreases.
However, another question needs urgent discussion. Given not for profits employ one in 10 Australians and provide vital services across the country, how will generational change affect leadership in the nation’s $129 billion charity sector? Have not for profits adequately developed the next group of leaders who will step up once today’s leaders retire?
Strong leadership is essential to driving strategy, retaining employees, responding nimbly to changing environments and ensuring the trust of donors, governments and clients remains high. This is especially true in the not-for-profit sector where every cent invested matters.
Research from a US study found that companies with strategic leadership development programs were better prepared to respond to unpredictable business environments. As not for profits grapple with changing donor and volunteer patterns and new or increasing demands on services, this is especially relevant.
The size of the sector is often under-appreciated. Collectively, it is roughly the size of the Australian retail industry, the education and training economy or the public administration and safety sector, according to Deloitte Economics’ report: Economic contribution of the Australian charity sector. Each year, countless Australians contribute to the 328 million unpaid volunteering hours performed that have an equivalent value of about $12.8 billion. Four out of five Australian adults donate to charity and therefore, arguably have a financial interest in seeing not-for-profit organisations flourish.
Given the importance our not-for-profit sector plays in the health of our communities, a whole of society solution to this challenge needs to be explored. Governments, not for profits and funders all need to work together to ensure the next generation of leaders in the charitable sector are not just ready to lead but ready to excel at leading.
The sheer size and reach of Australia’s not-for-profit sector mean that any investment in leadership will not only have benefits for individual organisations, but also society as a whole. As today’s leaders make the transition to retirement, we need considered succession planning that equips younger leaders today with the skills they need to lead organisations and contribute to the social fabric of our communities.
To future proof their organisations, not for profits should consider learning and professional development and talent management in the same way they consider other resources, like grants, donations and income. In this way, we can preserve the vast experience and knowledge of those who have come before us and ensure the vitality of our not-for-profit sector continues for generations to come.