Daring to Lead

March 24, 2006

Financial Challenges, Low Salaries Contribute to Executive Director Turnover

Washington, DC – Relentless fundraising pressure, weak boards of directors, low salaries, and lack of management support are causing many executive directors of small to mid-sized nonprofit organizations to leave their jobs. Daring to Lead 2006, a new study based on a survey of nearly 2,000 executive directors in eight metropolitan areas throughout the U.S., reports that three out of four nonprofit executive directors are likely to leave their jobs within the next five years. The report also suggests that boards of directors, foundations, and other grantmakers can play important roles in reducing burnout and turnover among executive directors.

The survey, which was conducted by San Francisco-based CompassPoint Nonprofit Services and the Eugene and Agnes E. Meyer Foundation in Washington, D.C., asked executive directors about their career paths, likely tenure, management teams, and challenges and frustrations. The study focused on community-based, locally focused nonprofit organizations in Boston, Chicago, Dallas, Los Angeles, Minneapolis/St. Paul, Sacramento, San Francisco, and Washington, D.C. Hospitals, universities, and national organizations were not represented in the sample.

In addition to revealing executives’ deep anxiety about fundraising and the financial sustainability of their organizations, the survey responses highlighted several other challenges that may affect the ability of nonprofit organizations to recruit new leaders to replace those who are leaving:

  • Most executives believe they have made a significant financial sacrifice to work in the nonprofit sector and believe their successors will need to be paid substantially higher salaries. Executive directors who were very dissatisfied with their compensation were twice as likely as other respondents to be leaving within a year.
  • Although they outnumber male executives by a 2:1 margin, women are less likely than men to lead organizations with annual budgets of $10 million or more. In every budget category, the mean salary of women was lower than that of men.
  • Despite increased emphasis on racial and ethnic diversity in recent years, executive directors remain overwhelmingly (82%) white. Recently hired executives were just as likely to be white as their longer-serving colleagues, and executive directors under 40 were only slightly less likely to be white.

The complete 36-page report can be downloaded at www.meyerfdn.org or www.compasspoint.org. Printed copies can also be purchased from CompassPoint.

CompassPoint Nonprofit Services is a consulting, research, and training organization providing nonprofits with management tools, strategies, and resources to lead change in their communities. With offices in San Francisco and Silicon Valley, CompassPoint works with community-based nonprofits in executive transition, planning, boards of directors, finance systems and business planning, fundraising, and technology.

Established in 1944 by Eugene Meyer, owner and publisher of The Washington Post, and his wife Agnes E. Meyer, the Meyer Foundation is one of the Washington area’s oldest and most experienced private grantmaking foundations. The Meyer Foundation works to develop Greater Washington as a community by supporting capable, community-based nonprofit organizations that foster the well-being of all people in the region. Meyer accomplishes its work by: finding visionary and talented nonprofit leaders; making early and strategic investments in nonprofit organizations; strengthening the management and leadership of nonprofits in the region; promoting a strong and influential nonprofit sector; building partnerships to foster the sector’s work; and serving as a resource to other donors who want to make effective charitable investments in the region.

Contact: Richard Moyers
202-483-8294 x103

Contact: Jeanne Bell
415-541-9000 x342