What’s Keeping Nonprofit CEOs Up at Night?
Roundtable participants share nonprofit insight, worry about funding, poverty
The lives of nonprofit CEOs can be very different from those of typical for-profit business leaders. As they strive to put every dollar possible into care for their clients, nonprofit execs typically don’t have much money left over for their own professional development.
That’s why The Miller Group started a special CEO Roundtable program about a year ago. We have been putting small groups of nonprofit CEOs together with a professional facilitator – a former nonprofit CEO himself. They meet monthly to hash out case studies, help each other with specific challenges and work on deepening their leadership skills.
Recently, we asked a few of them what was keeping them up at night, and we thought others would appreciate hearing their perspective.
Funding is the top issue
Funding levels always change as political leadership changes. And current times are especially challenging. For instance, Kansas cut 4% from its Medicaid funding last year. For one nonprofit where Medicaid represents 90% of non-philanthropic funding, such cuts go deep. Grant funding, too, has been decreasing.
“The real issue is how we can keep delivering quality care with reduced funding,” said one leader. “Our organization has a good reputation for quality services, and we’re always working to enhance them. But there’s a direct correlation between staffing and quality. You can easily see how funding cuts affect staffing. How do we keep them from affecting quality?
Recruiting and retention suffer
Another byproduct of funding issues is difficulty with recruiting and retaining well-qualified staff. It’s hard to attract workers when they can make more and have less responsibility in the for-profit sector. Many front-line workers don’t see their jobs as true careers, so turnover can be high. Even with level funding, it’s tough to retain millennials, who make up 65% of many nonprofit staffs.
State outsourcing presents challenges
“We’ve seen a 20-year trend of state outsourcing,” said one Kansas leader. “They re-bid the work every few years, and each time, the state asks the bidders to deliver more services for less money.” That kind of change ultimately puts a greater burden on the nonprofits offering related services. Nonprofit leaders expect to see more direct competition from for-profit providers, which could present both challenges and opportunities for nonprofits.
Pervasive poverty feeds the need
About a quarter of children in the United States are born into poverty. Our ranking among industrialized countries is astonishing, the leaders said. And it’s very difficult to get out of poverty. The lack of paid leave for working poor parents and the absence of affordable childcare are just two of the factors leading many poor children to arrive at school one or two years behind. And that deficit feeds the cycle of poverty.
Perceptions are important
These leaders said the political climate is often hostile to their clients’ plights. “The perception about so-called entitlement programs,” said one CEO, “is that people choose not to work and actually choose to rely on government support. The reality is that most of our clients need us because they are truly unable to work.” The question, said another, is not “How do we care for these people?” but “Do we care about these people?”
Future holds more challenges, some opportunities
Looking ahead five years, our participants see more challenges:
- They expect the number of clients to increase.
- They believe the number of nonprofit providers will shrink.
- Providers expect to experience significant strains to meet the need.
- With baby boomers retiring and life expectancy rising, they anticipate a shortage of workers.
- They don’t expect K-12 education to improve – which leads to greater needs for their services.
At the same time, they see positive potential:
- Some are looking at adding programs and expanding the number of locations.
- They think technology innovations such as robotics and remote monitoring could supplement and replace some high-touch care requirements.
- They expect for-profits to increase the competition – which could improve quality overall.
- They are hopeful for improvements in early childhood education programs for Kansas and Missouri.
While current problems are real and challenging, I was not surprised to hear the optimism in these leaders’ conversation. It’s a quality and commitment that seems essential to the strongest nonprofit leaders – a quality and commitment for which we and our communities can be grateful.