Unpredictable Times
We live in uncertain and unpredictable times. As Chris Birch states “Future historians will probably judge we are living through a revolution. Propelled by global forces and the push/pull of information and communications technology, our established political, economic and social models are struggling to cope.” Social and technological change seems to be speeding up, while “the impact of the speed of change is perhaps what differentiates current challenges to those of the past.”
The future is hard to predict; very few economists predicted the 2008 crash while many other experts consistently resisted acknowledging the rise of IT and the Internet: one scientist told the author in the mid-1980s that computers were just glorified typewriters. The then UK prime minister clearly did not foretell the Brexit vote to leave the European Union when he decided to set up a referendum in 2014, nor was the election of Donald Trump as the U.S. president in 2016 predicted by most experts or pollsters.
Opportunities
Yet these changes can also bring opportunities. For nonprofit sector organizations with the right skills and aptitude, technology opens up new services, create new fundraising channels and cut costs. For service users and staff it can open up new communication channels between each other and with the powers that be, whoever they are. Then there is Artificial Intelligence (AI), whose effect will immense. Clearly young people are better equipped to use IT and AI applications, but managers of any age can keep up by training, networking and so on.
The business world is clearly much more fast-moving than the nonprofit sector. One reason is because the nonprofit sector is regulated and guided by service users’ needs on the one hand, by government direction, funding, and regulations on the other hand and finally by volunteers’ involvement. In other words the sector has many more stakeholders than the private sector, as discussed earlier, which leads to greater scrutiny. In turn this provokes attention from the press over issues such as fundraising methods, senior managers’ pay, or the performance of individual charities.
Trends in the Sector
Political scientist and writer, Michael Kaufman, writes1 that “Various factors have shaped the modern nonprofit sector in the U.S.:
First and foremost, the country has a small social security net, state-funded healthcare, and state support for cultural institutions compared to other OECD countries. People’s lives and well-being and the vibrancy of communities have depended on robust non-profits.
Second is the massive role of organized religion which occupies a space now unknown in many European countries or Canada. Churches, mosques, synagogues, and temples, and the religious-based non-profits they support, play a critical role in social services and healthcare especially in smaller communities, although in big cities the most important non-profits and community groups are secular (I should add that this church role isn’t always positive, as seen by the well-funded and well-organized groups opposing women’s right to reproductive services or LGBT rights.).
Third, in the absence of an adequate state role, individual charitable contributions to non-profits play a much bigger role than in most countries, as do private family foundations (from the Carnegies, Fords, Rockefellers, and Gates on down). The reasons for this are complex. When it comes to giving, U.S. residents are a very generous lot. Tax laws encourage donations. And there is a belief in individual action over state measures and a stress on ‘charity,’ as opposed to universal rights to services. But there is also a long-standing role of community-based organizations, which create person-to-person connections to meet needs outside of the state. Community foundations, for example, provide a critical response to local needs. At times their programs draw on support from city governments, which shows how complicated the picture actually is.”
In the UK Peter Beresford believes that there is a growing divide between small charitable organizations—with low profile but high energy, real street credibility, and beneficiary involvement—and the traditional UK large nonprofit organizations—with big reserves, highly paid chief executives, and expensive central London headquarters.2
It is unclear exactly what the future will holds for the nonprofit sector in the UK. The British Council predicted in 2014 that all UK charities would generate income from contracts and trading; that is clearly unlikely for small charities but not for large ones. Grants from statutory funders will not return for the sector in place of contracts, as the latter gives much greater control to funders over service delivery. This trend also ensures that competitive tendering will continue, with requirements that impact be measured and reported in some detail. Research from NPC3 shows that UK nonprofits are cross-subsiding state contracts with charitable donations but not always succeeding in covering their own costs; a recent example is Lifeline, a UK charity with a £62 million annual turnover, which has collapsed.4
Likewise the involvement of the private sector in delivering large contracts in both the U.S. and UK (for example, prisons, health care) is almost certain to continue, so many nonprofit sector organizations will inevitably carry on with subcontracting as a way of generating income for themselves and still being able to offer services. Yet most charities are still very small with no contract income, with some subsisting solely on local fundraising or trust fund income.
Realistic Perspective
It is essential for nonprofit sector managers to develop a realistic future perspective both on a macro level—looking out for changes in the political and business environments within society—but also on a micro level—in their own organizations, to ensure they can meet new challenges. NCVO have predicted that there will be many changes in Western society and nonprofit management, including those involving new technology, social attitudes, and population demography.5 In a useful paper, Williams notes that organizations can become more successful by spending their time improving their understanding of the likely future regarding these external pressures and using this to make a stronger organizational strategy.6 As I have written elsewhere with a colleague “The environment is dynamic and the only thing, of which we can be sure, is that change will be continuous and demanding” and nonprofit sector managers “must be prepared for this, be always learning and be resilient.”
Trends
Leading and managing a nonprofit organization is both demanding and rewarding. Managers must expect the unexpected and equip themselves to deal with whatever comes. Rising to meet such challenges is one of the aspects of management that is exciting. Clearly it is particularly stressful if it is your first management role and you are operating in the prevailing climate of austerity and cuts.
I cannot emphasize enough how essential it is to seek high quality training, support, and coaching for yourself to equip yourself to overcome these challenges. I have already stated how important it is to define your training needs, through some sort of training needs analysis to select what you need (see chapter Managing Your Resources). These activities overlap, in that the best training provides support, while the best coaching gives one-to-one training. Informal networking with peers in the field can also provide support and generate new ideas.
Leadership Styles
One guiding principle is to assess the situation you are facing very thoroughly, including the resources and staff you have available, the realistic prospects for your organization and then to plan and deliver from there. Clearly some leadership styles (for example, Commanding) are only best suited today to situations, where clear danger is threatened to service users, staff or public or the organization itself (which might include financial danger). Hard work always pays off; the old saying is very true, namely that genius is 99 percent perspiration, or as one head teacher states real “delivery is about grind not just the grand.”
Some recent research into school leadership in the United Kingdom. The Centre for High Performance identified five types of so-called super-heads of schools: “architects, soldiers, surgeons, accountants and philosophers.”7 Most of the styles were not effective over the long term, apart from the “architects,” who do not opt for a short-term solution, but build schools that continue to improve long after they have left. “Rather than making quick fixes they build relationships with the local community, create a climate of respect and trust, develop their (staff’s) teaching and find the right future for all their students.” This requires concentrating on building solid foundations, planning for the long term, analyzing the needs of customers (pupils), and orienting services to meet their needs. I believe that nonprofit managers should follow the same path.
The Grenfell Towers block disaster in London in 2017, in which over 80 people died and 300 were made homeless, has shown how the community and its own nonprofit organization responded far more swiftly and sensitively than government at all levels. I believe that nonprofit organizations still provide the most opportunities to work creatively and innovatively in developing positive solutions to tackling the most difficult issues in society and the environment.
1 Private e-mail to author 2017.
2 https://theguardian.com/society/2012/apr/24/tax-relief-row-big-charities-priorities
4 https://theguardian.com/society/2017/may/18/drug-and-alcohol-charity-lifeline-project-collapses
5 http://www.ncvo.org.uk/images/documents/policy_and_research/funding/financial-trends-for-small-and-medium-sized-charities-ncvo-lloyds-bank-foundation-2016.pdf
6 http://www.dochas.ie/sites/default/files/Williams_on_Effective_CVOs.pdf
7 https://hbr.org/2016/10/the-one-type-of-leader-who-can-turn-around-a-failing-school