Why Corporate America Should Be Backing Nonprofits and Their Emerging Leaders

And 4 ways to train them to succeed.

The nonprofit sector is strong. Of course, we’ve known for decades its significance in bolstering the health and welfare of communities. It’s the leading sector that educates our children, feeds and houses those in need, identifies and deploys solutions to save the planet, and backs our society in a host of other ways. I find that individuals recognize the escalating need for nonprofits and their myriad contributions, but they underestimate the industry’s economic importance. 

With 1.6 million 501(c)(3) tax exempt nonprofit organizations in the United States, the nonprofit sector is the nation’s third largest, just behind retail and manufacturing. This represents 12.5 million jobs and 10.2 percent of the workforce (as of 2017). And with Millennials’ growing workforce prominence, I suspect this will not slow down anytime soon. 

How do Millennials play a potential role in the sector’s growth trajectory?

It’s been well documented that as a demographic, Millennials care most about having a purposeful life, an active community, and social ties. According to a 2016 Gallup study, only 29 percent of Millennials are emotionally and behaviorally connected to their job and company and are flocking to mission-driven organizations that feel worthwhile. In just two years, Millennials will comprise 50 percent of the workforce. 

With the growth of the Millennial workforce and their desire to fulfill societal needs, the potential for the nonprofit industry is massive.

And yet, the industry has been plagued with challenges—from inadequate funding and insufficient staffing, to an issue my company has been working hard to address: an absence of management training. It’s not surprising that studies show only 20 percent of nonprofit leaders find they have the skills to meet their goals. 

Many large companies have highly sophisticated and intensive training programs that emerging leaders are required to take before they assume leadership roles. Corporate America increasingly recognizes that leaders who are just starting out need a whole new set of skills to be effective and that leadership training is essential, yet nonprofits often lack the same mandates. Therefore, emerging nonprofit leaders often are left to “figure it out for themselves” when there is so much riding on their success, such as the safety and well-being of the communities they are trying to support. 

It is just as important—arguably even more so—to train nonprofit leaders than corporate managers because of the immense potential for social good.

How Companies Can Help

What makes a successful leader? We find that the most successful leaders must develop behaviors rooted in three dimensions of leadership. They need to: 

1. Set the agenda

2. Bring others with them

3. Do it the right way 

What can Corporate America do to help emerging nonprofit leaders acquire these behaviors and skills and give them the tools they need to succeed?

There are four ways companies can help.

1. Encourage volunteerism. Companies can make a concerted effort to engage staff in philanthropic activities, including supporting nonprofits and their leaders. Individuals who work for companies can harness their professional skills and business acumen to: provide management consulting, strengthen operations, improve organizational branding and messaging, offer presentation training, implement marketing strategies, and deepen engagement with donors and volunteers. 

2. Make grants. Companies can advance their corporate social responsibility efforts by making grants focused on training leaders to tackle important issues. Specifically, companies may donate to nonprofits to help organizations create, expand, or maintain their own leadership development programs for high-potential, emerging leaders. Ideally, companies can initiate a matching program to encourage employee participation in the grant process, as well.

3. Leverage leadership on demand. Companies can develop, curate, and share with nonprofit organizations content on leadership topics, available on demand for nonprofit staff on an intranet or other online platform. Content may include: executive coaching, team leadership, and a tool for encouraging 360-degree feedback. Corporations also can fund access to existing online development and learning platforms for social purpose leaders. 

4. Facilitate professional development and networking. Companies can host in-person educational conferences for emerging nonprofit leaders, which may include a variety of workshops and panel discussions designed to: grow participants’ networks, enhance their leadership skills, and present best practices for advancing the sector. Following these events, companies can help participants continue their leadership development journey through networking platforms and custom Websites with leadership stories from their industry peers along with key resources and expert insights.

It’s already becoming increasingly essential to support emerging nonprofit leaders given the growth of the Millennial workforce and their appetite for professions that support social justice. What’s on the horizon? Generation Zers, who are particularly interested in issues surrounding global poverty and hunger, the environment and climate change, and human rights.

The emergence of Millennials and Gen Z bodes well for the nonprofit sector’s continued growth. As far as demographics are concerned, we are moving in the right direction, but we need the backing of corporate America. Corporate colleagues, let’s work together to empower future nonprofit leaders to boost our nation’s economy, build a healthy society, and make a profound, sustained impact.

Timothy J. McClimon is president of the American Express Foundation. He oversees the American Express Leadership Academy, which builds the personal, business and leadership skills of emerging nonprofit leaders and social entrepreneurs through multi-day, in-person trainings. Under his leadership, the company has hosted more than 130 Leadership Academy programs across 12 countries, training more than 4,300 nonprofit and social sector leaders. For more information, visit https://about.americanexpress.com/we-develop-leaders

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