April 12, 2016

Study: The State of Nonprofits and Leadership in Hartford and New England

A recent study of nonprofit leadership by Third Sector New England, funded in part by the Hartford Foundation for Public Giving, looked at executive and board leadership. More than 1,200 executive directors and board members from all six New England states responded. Of the surveyed executives, 123 directors and 49 board members were from the Hartford Foundation for Public Giving’s service area.

Why was this study conducted?
The purpose of the study was to learn what challenges nonprofits are facing when it comes to leadership. Who are our executive and board leaders? How prepared are they and their organizations for changes in leadership? What keeps them up at night? And lastly, what does the future hold for leadership in our nonprofit sector?

Who was surveyed?
Compared to the rest of New England, the Greater Hartford-area executive leaders were generally older, more racially and ethnically diverse, and have been in their current positions longer.

Nearly two-thirds (64%) of New England respondents, and 69% of Hartford region respondents, have at least a master’s degree. Despite the educational credentials of our nonprofit leaders, two-thirds of Hartford area nonprofit CEOs have salaries under $99,000, with 22% of those having salaries under $50,000. Furthermore, the gender gap in the region’s nonprofit sector is stark. Overall, just 9% of female nonprofit leaders have salaries over $200,000, compared with 35% of male nonprofit leaders.

How does Hartford compare with the rest of New England in terms of diversity?

Percentage of leaders who are non-white:

13% of New England sample
23% of Hartford-area leaders

Percentage of board members who are non-white:

14% of New England sample
37% of Hartford-area leaders

Percentage of executives who say their staffs are “not at all diverse”:

40% of New England sample
21% of Hartford-area leaders

As you can see, Hartford-area nonprofits seem to have greater board and staff diversity. The greater racial and ethnic diversity in our region may be due in part to the Hartford Foundation’s board diversity policy, which requires the boards of applicant organizations to reflect the communities they serve, as well as our Nonprofit Support Program’s Board Leadership Program and board development grants, and Leadership Greater Hartford’s Leaders on Board program.

How prepared are they for leadership changes?
The Hartford Foundation-area sample mirrors New England in terms of leaders’ expectations about leaving their positions: 

66% of nonprofit leaders expect to leave within 5 years;
27% within 2 years;
7% within 1 year. 

Significantly more Hartford-area respondents have a succession plan in place compared to the rest of New England, when it comes to a planned absence, unplanned absence, or departure of an executive. This may be in part due to the many agencies that have received assistance with succession planning and executive transitions through our Nonprofit Support Program. 

What challenges keep them up at night?
For executive directors and board members alike, fundraising is by far the most challenging part of the job. According to the results of the study, it’s almost three times more challenging than any other area. 

Financial management, and managing and developing staff are also cited as major challenges.

When asked about the condition of their organizations when they first stepped into their executive director roles:

1 in 5 respondents found their organization to be healthy and stable;
23% found their organization in need of a turnaround;
23% described their organization as growing or a start-up;
19% described their organization as frail;
13% described their organization as a complete mess.

Not surprisingly, cash flow is a major issue for many Hartford region nonprofits:

Only 27% said their organizations have 7 or more months of cash reserves;
24% said they have 4-6 months;
28% said they have 2-3 months;
14% have a month or less;
7% have no cash reserves at all.

When it came to “creating effective organizational structures and systems,” Hartford-area respondents were significantly less likely to rate it as challenging as compared to the rest of New England respondents.

Why? TSNE suggests that “Effective technical assistance and capacity-building programs like [the Hartford Foundation’s] Nonprofit Support Program can create strong platforms for systems creation in nonprofits, particularly those having to do with financial management, technology, and human resources.” In fact, several Hartford-area respondents specifically mentioned the Nonprofit Support Program as a resource.

CEOs and board leaders varied significantly in their perceptions of board effectiveness. Board members generally rated their own performance higher than CEOs rated those same boards. The areas with the greatest discrepancy between CEO and board member perceptions of the board included: community ambassadorship, public policy/advocacy, and ensuring the mission of the organization is upheld.

What does this data tell us about the future of nonprofit leadership in Greater Hartford? 
We’ve certainly made some progress in the Hartford area, but there is a long way to go. What solutions or opportunities do YOU see? What can we learn from successes in other places? Send your thoughts and comments to nsp@hfpg.org and we’ll share ideas on our website and social media.

As our tagline says, we are “together for good.” Let us know how we can better serve you.

Read the full report here, or read the brief on the Hartford Foundation’s region here.