A promising trend in Canada’s nonprofit sector over the last decade is the steady rise in the employment rate. However, with an increase in nonprofit operations and the related number of people seeking nonprofit roles, there’s also a need for more skilled and influential leaders.
If you’re currently leading a nonprofit organization or considering applying for a nonprofit leadership position, this guide can help.
There are some common leadership styles for nonprofit leaders to run their organization smoothly and reach noticeable results. But first, let’s look at how best to lead a nonprofit organization, the unique challenges nonprofit leaders face, and the differences between nonprofit and for-profit leadership functions.
Key Differences in Leading a Nonprofit vs For-Profit Organizations
If you’ve never worked in the nonprofit space before, it’s easy to assume that leading a nonprofit organization is the same as leading a for-profit company. But, in reality, you must keep some distinct differences in mind.
For-profit leaders focus intently on increasing revenue for the company.
Generally, for-profit companies focus on providing customers with products or services to make a profit. Because the purpose of a for-profit company is to make money, for-profit leaders’ primary focus tends to be increasing the organization’s revenue.
Nonprofit organizations aim to provide services or benefits to the community without the intention of earning a profit. Nonprofit leaders, therefore, aren’t focused on profitability. Instead, their top priority could be promoting a social cause, raising money for an underserved group, raising awareness of a specific issue, etc.
Nonprofit leaders don’t seek direct financial benefit.
Nonprofit leaders also differ from for-profit leaders because they don’t have an economic ownership stake in the organization. Usually, a board of directors leads the group and decides its future without interest in the organization’s profitability.
On the other hand, for-profit leaders tend to be more committed to the company’s financial success because it produces significant results for them, like bonuses and profit-sharing opportunities.
The Role of a Nonprofit Leader
Nonprofit leaders may focus on profitability differently than for-profit leaders do. However, they still perform many critical roles to keep the organization running smoothly and ensure it makes a difference in their clients’ lives.
The following are some of the most notable roles of nonprofit leaders:
● Articulate the organization’s vision and ensure others understand the group’s purpose
● Fundraise to support the organization’s mission and keep it up and running
● Develop the board, recruit new members, provide training, and encourage their ongoing growth
● Manage finances to ensure funds raised go to the appropriate places
● Build community relationships to expand the organization’s impact
● Encourage thought diversity among board members, employees, and volunteers
Nonprofit leaders are also responsible for minimizing risk. They are critical thinkers who evaluate the organization’s current standing, identify potential issues, and develop strategies to combat them.
What Makes a Strong Nonprofit Leader?
A strong nonprofit leader carries out the abovementioned roles and responsibilities, paying attention to detail and helping all partners to stay committed to the organization’s mission.
Some people are better suited to the nonprofit leadership role than others. However, the following are some attributes typically associated with an effective nonprofit leader:
● Self-Starter: Nonprofit leaders are motivated by change, not money. They’re self-starters who don’t need financial rewards to keep them focused.
● Passionate: They care about the cause their organization supports and want to make social, environmental and other impacts in the world.
● Able to Motivate: In addition to being motivated themselves, nonprofit leaders also know how to encourage others and get them excited about their cause.
● Dedicated to Service: Nonprofit leaders want to make a difference in the world and are committed to serving those in need through their skills and resources.
● Able to Handle Conflict: Conflict is inevitable in any group, including a nonprofit. The best nonprofit leaders don’t shy away from conflict and know how to handle it effectively and productively.
● Active Listener: Nonprofit leaders are active listeners. They strive to understand others’ points of view, even if they disagree.
The best nonprofit leaders also have great stamina. They understand that making a difference can be a long game, and results don’t always appear immediately. So they’re willing to stay the course and continue working to carry out the organization’s mission.
Strategies Nonprofit Leaders Put into Practice
In addition to possessing critical traits like persistence, passion, and the ability to motivate others, nonprofit leaders put their skills to the test by using the following strategies to connect with stakeholders and move the organization in the right direction:
Nonprofit leaders work with board members, employees, volunteers, and community members to identify ways for the organization to support those in need. They also set specific, measurable, and time-based goals to ensure they’re truly making a difference.
Clarifying Mission and Values
Nonprofit leaders know their organization’s mission inside and out. So they strive to clear up confusion regarding the group’s mission and values and ensure everyone understands what they’re trying to do and why.
Performing a SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. Nonprofit leaders must regularly analyze the organization to identify these four elements in their organization. Then, they must develop plans to address their weaknesses and threats while expanding their strengths and opportunities.
Performing Regular Reviews
Nonprofit leaders should not rest on their laurels. Instead, they should continuously work to make the organization better. To do this, they must conduct regular reviews and assess performance. Ongoing evaluations help them understand what’s working.
Challenges Leaders Face when Leading a Nonprofit Organization
Like any leader, nonprofit leaders must contend with specific challenges when carrying out their roles. The following are some examples of challenges non-profit leaders may face:
● Inequality: Nonprofit leaders must be aware of inequalities and how they affect those they’re trying to help.
● Urgency: Those in need require help sooner rather than later, creating a sense of urgency that leads to extra stress and work for nonprofits.
● Internal Communication: It can be challenging for leaders to communicate effectively with internal members, primarily when they work remotely.
● Reporting: Nonprofit leaders must generate reports regularly to clarify the organization’s progress, prove its effectiveness, and explain where funds raised are going. This process can be time-consuming and adds to leaders’ already full plates.
Non-profit leaders don’t shy away from these or other challenges. Instead, they’re committed to helping the organization grow and thrive.
Leading a nonprofit organization comes with some unique challenges, but it also presents many opportunities to make a valuable difference in society. Follow the guidelines discussed above so you can become an effective nonprofit leader.