Effective Leadership Styles in Nonprofit Organizations

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Nonprofit organizations employed roughly 2.5 million Canadians in 2019. This level of employment represents 12.8 percent of all Canadian jobs, including many crucial leadership positions.

If you are the new leader in the onboarding process of a nonprofit group or a seasoned director looking to revamp the way you oversee your staff, there is always more to learn.

Nonprofit leaders can use multiple tactics to guide their staff and keep their organizations running smoothly. The following are four of the most common styles for nonprofit leaders.

Four Nonprofit Leadership Styles

1. Servant Leadership

Servant leadership emphasizes sharing various elements of the leadership role and empowering others.

Servant leaders focus more on others’ needs than their own. They care about their fellow employees, their organization’s volunteers, and those the organization serves. They also strive to create value and improve people’s well-being.

Some assume that servant leadership and nonprofit organizations should always go hand in hand. There are both pros and cons to this leadership style, though.

Pros of Servant Leadership

Servant leadership helps executives and managers build strong relationships with their nonprofit staff and volunteers.

Servant leaders contribute to a positive organizational culture. They also foster more engagement among team members.

Organizations led by servant leaders might also see a decreased employee and volunteer turnover rate. In addition, because people enjoy working with and feel supported by these leaders, they are less likely to jump ship to another nonprofit.

Cons of Servant Leadership

In most cases, servant leaders’ concern for people’s feelings benefits the organization, its staff, and its overall culture.

However, servant leaders sometimes make the mistake of putting feelings above the organization’s function. As a result, the nonprofit may struggle to reach its goals or significantly help those it aims to serve.

2. Transformational Leadership

Many people also value transformational leadership in nonprofit organizations.

Transformational leadership involves elevated morality, optimism, and confidence for the future. These leaders are eager to serve. They are also dreamers who work hard to improve and transform organizations to their fullest potential.

Pros of Transformational Leadership

Transformational leaders are united with their team members to pursue a common goal.

In the nonprofit sector, transformational leaders work tirelessly to expand the organization’s reach and serve those in need. They also motivate their staff and volunteers to do the same.

When employees and volunteers see a transformational leader’s passion for the cause, their passion will also grow. Growth in passion can result in increased engagement, more productivity, and better outcomes.

Cons of Transformational Leadership

Many employees and staffers are motivated by transformational leadership. However, some may hesitate to adopt changes or take on additional responsibilities.

Transformational leadership may also contribute to increased burnout among some team members. If someone’s passion does not match the leader’s, they may overextend themselves trying to keep up.

3. Transactional Leadership

Transactional leadership places a strong emphasis on goal setting and achievement.

Transactional leaders value fulfilling contractual obligations and work hard to set clear objectives, monitor performance, and control outcomes.

Some assume that transactional leadership is not ideal for a nonprofit organization that serves a specific group. But while this approach has some downsides, there are also considerable benefits like increased clarity and pursuit of desired outcomes.

Pros of Transactional Leadership

Transactional leadership works well in nonprofit spaces for several reasons. This style focuses on setting and achieving specific goals. Transactional leaders are excellent at the following:

● Identifying objectives
● Establishing clear metrics for monitoring progress
● Setting teams up to achieve performance goals

This type of leadership is beneficial when organizations need to meet a distinct goal or conduct an event, like a fundraiser.

Transactional leaders break goals into manageable tasks. Then, they assign specific roles to each employee or volunteer. Finally, they often ensure everything happens seamlessly.

Cons of Transactional Leadership

The primary downside to transactional leadership is that it can feel a bit too rigid or “corporate” for some nonprofit employees and volunteers.

What happens if the leader is too focused on meeting goals and does not bond with team members? They could hurt the organizational culture at their nonprofit.

Leaders must strike a balance between being task-oriented and connecting on a human level.

4. Charismatic Leadership

Charismatic leadership involves great enthusiasm and passion for a particular cause or mission.

A charismatic leader has a strong personality. They use their convictions and confidence to steer the nonprofit, its employees, and its volunteers in the right direction.

Pros of Charismatic Leadership

Charismatic leaders have infectious personalities.

Their enthusiasm for the cause and passion for helping others often rub off on their employees and volunteers. When everyone is enthusiastic, it is easier to accomplish goals and expand the organization’s influence.

Charismatic leaders can encourage employees and volunteers to be more committed to their work. This increased commitment can also lead to higher satisfaction and reduced turnover.

Cons of Charismatic Leadership

A potential downside to charismatic leadership is that some leaders can be overbearing in their communication style. Their passion might come across as obsession.

A charismatic leader may also be unwilling to hear other people’s concerns or objections. This unwillingness to listen can create a culture in which employees and volunteers feel unimportant or unsupported.


Of the four nonprofit leadership styles discussed above, one is not inherently better than the others.

Each approach has pros and cons. It is up to you as a leader to decide which one works best for a given situation.

Charismatic leadership might benefit those feeling jaded by their work. On the other hand, transactional leadership may work better when you need to prepare for an event.

The more flexible you can be, the better. Flexibility makes it easier to choose a leadership style that works for your team. It also allows you to accomplish your organization’s goals and better serve the communities your nonprofit aims to support.

Do you need help finding quality candidates for executive roles at your nonprofit? If so, we are here to assist at Cause Leadership Inc.

Contact us today to start your search.

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