Non-Profit Organisations (NPOs) have to deal with a variety of challenges, depending on the field and region they operate in. From government regulations and tax reforms, to funding and organisational growth, NPOs face difficulties that most CEOs would struggle to manage. Out of all these difficulties, leadership challenges have the most impact on NPOs.

We explore two different views on these challenges, and the approaches you can take to solve them. Before we get into these issues, it’s important that we have a better understanding of what to expect from NPO leadership.

What makes someone a suitable leaderThere are certain elements that influence leadership in any organisation. In his piece Leadership skills South Africa needs in the next decade, Professor Arnold Smit highlights the following:

• Context – Responsible leaders are aware of the situation and adapt accordingly.
• Character – A leader’s character must be trustworthy and have a strong foundation of integrity.
• Beliefs – Every culture will have different beliefs on what good leadership means, which will play a role in shaping their leadership style.

Key leadership challenge #1 – Finding leaders with the right skillsThe first challenge is highlighted by Chris Grundner, President and CEO at Welfare Foundation, Inc. In his TED Talk, “Modern nonprofit board governance – passion is not enough!”, he discusses how NPOs are often forced to pick leaders who don’t have the relevant skills. The financial constraints of a NPO often force their boards to find volunteer directors, with Grundner highlighting that “beggars can’t be choosers”. As a result of this, little concern is paid to the actual skills they bring to the organisation.

The Nonprofit Board Governance “Hierarchy of Needs”Grundner draws on Maslow’s Hierarchy of Needs to create a similar model for nonprofit boards, The Hierarchy of Nonprofit Board Governance. This model explores the key characteristics that directors on the board should have, in order of importance:

• Passion – While passion for the NPO’s mission is important, it’s not the most important skill in regards to helping the NPO as an organisation.
• Standards & Best Practices – Different standards and practices, such as job descriptions and annual reviews, are a vital part of board efficiency. The board must also embrace a philosophy of continuous learning and hold individuals accountable for their performance.
• Diversity – While like-mindedness can speed up decision making, a diverse board will give you a more accurate view, offer a broader set of skills and instigate critical conversations that will help the organisation in the long run. Additionally, board members must represent the views of the people they are trying to help.
• Transcendent Leadership – At this stage the board and its members must be thinking long-term, more specifically about how the next members of the board will carry the torch. This is vital during times of change, particularly when they’re unexpected, but the right plans for succession can keep your organisation moving forward.

Finally, Grundner highlights these three points that boards and board members need to embrace:

1. Nonprofits: Raise the Bar
   NPO boards shouldn’t hire individuals that only roughly meet necessary criteria. Existing board members should be regularly evaluated, and unproductive members removed.
2. Board Members: Hold Accountable
   As a member of the board, hold the organisation accountable. If you’re struggling to do what you need to do because of delays within the organisation, engage and challenge them to be better. But remember you must also hold yourself accountable. If you are unable to perform your role on the board to the best of your ability, step aside.
3. Considering Joining: Be “All In”
   When deciding whether to join the board, ask yourself, “Can I go all in?” If you’re unable to commit, reconsider applying for such a position of leadership.

Key leadership challenge #2 – Addressing The Key Elements of NPO LeadershipIn our report, MBAs meet NPOs – What do they learn?, University of Stellenbosch Business School (USB) explores the leadership challenges affecting NPOs from a different angle. These findings were based on the work of 201 MBA students who worked with NPO leaders in USB’s Social Engagement Project (SEP). The students came up with a list of NPO leadership elements that are critical to an NPO’s mandate and long-term sustainability.

The four main categories in the report are:

• Planning for the Future
• Collaborating for Sustainability
• Self-Sufficiency
• Public Relations

Planning for the FutureMBA students observed that NPO leadership must have long-term strategic plans in place. To achieve the goals for this category, some of the things to commit to include are:

• Strategic planning – NPO leadership will struggle to capitalise on interest from funders and donors if the NPOs lack a strategic direction.
• Alignment with the Sustainable Development Goals (SDGs) – Connecting with SDGs could improve performance and recognition for NPOs due to their internationally recognised framework. NPO leadership must make an effort to take advantage of this.
• Diversifying service approach – Charity and philanthropy will only take an NPO so far. To attract donor funding, NPO leadership must ensure the NPO offers additional services.
• Expanding and replicating services – Due to the vital role NPOs serve in society, NPO leadership must take steps to expand so their services can reach others who require their services.
• Staff development – NPO leadership needs to offer staff development programmes, as these benefit the entire organisation.
• Monitoring and evaluation – Data is vital for NPO leadership to assess the impact of the NPO. This data can be gathered from service users and the communities connected to the NGO.
• ICT advancement – If NPOs want to make the most of their resources and ensure their organisation is communicating effectively at all times, NPO leadership must be prepared to take advantage of the latest technology.

Collaborating for SustainabilityNPO leaders must develop collaborative partnerships to ensure sustainability for the NPO. Two aspects of this category that are vital are the forming of private sector partnerships, and actively embracing opportunities that will positively affect NPOs in a number of ways. For example, improving development capacity by collaborating with tertiary institutions will help them to better influence policy development with their for-profit partners.

Self-SufficiencyTo become self-sufficient and financially sustainable, NPO leaders must recognise the importance of strategic planning and collaboration. However, they also need to ensure they focus on:

• acquiring funding
• sharing information with funders and other key stakeholders
• creative thinking when it came to leveraging limited resources
• leveraging their NPO status to attract additional donor funding

Public RelationsPublic Relations (PR) is a critical tool that NPO leadership can use to create an identity that defines their NPO as the preferred partner. The key factors that NPO leaders need to address around their PR approach include:

• organisational identity such as branding and “corporate” identity
• a code of conduct which improves the NPO’s culture and legitimacy
• the steps they need to take to remain competitive and ensuring they align with corporates, funders and government departments

Growing your own leadership skillsWhile these two approaches will undoubtedly help you address the challenges with NPO leadership, you need the right foundation of leadership skills before you apply for a position on an NPO board or decide to lead one. The University of Stellenbosch Business School is a triple-accredited African business school that can help you acquire those skills. Take a look at our Leadership programme here to find out more.