Leaders usually face challenges regardless of their field or sector. Here are three challenges that nonprofit organizations face:
Non-profit organizations usually find difficulties in providing measurable value “when a profit motive is non-existent involves creativity”. (Ingrid Pregel, Leadership Intelligence).
- A wide range of stakeholders
Non-profit organizations have complex operations for example, leaders have to deal with the board, key donors, colleagues unlike the non-profit organizations. In short, the range of key stakeholders is much greater for a leader in a not-for-profit organization.
- “Challenges of governance”
Ingrid Pregel said that ” Working with governing boards is a different task in a not-for-profit situation than in a corporate one. Issues with board governance and the relationship between the board and CEO, as well as other stakeholders, take up more mental energy and time with a not-for-profit organization than in a typical for-profit company. In a for-profit organization, the board of directors is in place to look after the shareholders’ interests, and the shareholders are looking for returns. However, in a not-for-profit, the shareholder is the community. This provides a unique, inclusive dynamic. A board member with a for-profit company might not know anything about making the product the company sells. But when you’re a community member sitting on the board of a not-for-profit organization, and you’re there in a fiduciary role, you have a lot to say about what’s going on in the community and what the needs are. The leadership is more of a shared commodity with the board. Who develops the strategic plan? In the corporate world, the CEO and executive team do, and they might show it to the board, or they might not. In the not-for-profit sector the board members are up to their elbows in developing it. The leadership is shared.In the not-for-profit sector, issues of accountability and questions about who’s the owner and who’s the shareholder all make the job much more complex for a leader”.