No one was surprised when TIME Magazine named the Ebola Fighters as their choice for Person of the Year 2014. In a crisis that had many blunders, these heroes raised our hope for a better outcome. In the social sector, we have many everyday heroes who do not serve for the accolades, but do it for the mission. Unlike the for-profit space, where many inputs can make or break a company, the one and only driving force of the social sector is our talent – the men and women who dedicate their lives to helping others. However, to do good at a scale that solves social problems, we must increase our focus on this common denominator and ensure that the sector is attracting and retaining the best workforce and volunteer force. It could be the sector’s great multiplier – allowing us to magnify our efforts in this century. This year, we are focusing on this game-changing idea as we start out the year with word shifts – signs of larger shifts in the social sector – we are seeing:
- Talent Management vs. Human Resources: Business has made the shift, but for all the reasons above and more, the social sector needs to be in the business of talent management. Human resources is about filling jobs and filling out paperwork; talent management is about attracting, training, and incentivizing employees and creating a culture that serves the mission. If we can attract the best talent for the social sector, we will indeed get better outcomes.
- CEO vs. Executive Director: Many nonprofits go back and forth with the right title. The right one today is CEO. The title “Executive Director” does not speak to the range of skillsets needed to be the leader of a nonprofit – Chief External Officer, Chief Empowerment Officer, or Chief Everything Officer.
- Board Engagement vs. Board Involvement: There is an old, but famous joke about the making of bacon and eggs. The chicken is involved, but the pig is committed. The same goes for a social sector board. We often tell clients that we judge board members’ commitment not by what they do during board meetings, but what they do in between board meetings. For the social sector to adapt and do better, we must have boards that also go above and beyond and are deeply engaged with the mission.
- Total Rewards vs. Salary: On the first day of my Social Entrepreneurship class, I ask the class how many would like to work for a nonprofit and almost every hand goes up. It is, after all, a biased sample. I also ask how many of them actually will and, heartbreakingly, only a handful stay raised. When I ask why, the answer is always the same – salary. Many young people believe nonprofits do not pay as well as their for-profit counterparts. I quickly dismiss this myth in my class, but I also believe we collectively need a better recruitment strategy, especially for millennials and baby boomers. It has been well documented that both generations are searching for more than money; they are looking for the “total rewards” of money, ownership, and flexibility. Nonprofits, in my experience, can offer the best total rewards package to new employees, but it must be marketed in the right way. We need to recruit on college campuses, re-brand the experience and give opportunities for intrapreneurship. Once we do this, success will beget success and word-of-mouth will take over.
- Success Factor vs. Overhead Rate: For more than a decade, we have been fighting the overhead word battle, yet many smart people still believe that overhead is the primary method of judging the effectiveness of nonprofits. Overhead, which is also called the indirect cost rate, is used for many things that cause a nonprofit to flourish – professional development, storytelling (otherwise known as fundraising and marketing), audits, board/staff retreats, evaluations and strategic plans. To prove the point, some nonprofits developed T-shirts for staff with the phrase “I am Overhead.” Why would you want to limit these investments if they led to higher accountability and results? We believe a new word is needed – maybe “success factor” – to showcase how investments made outside of the direct programming can ensure the success of the nonprofit. We also believe that each of these investments – like all investments – should be monitored for its reasonableness and contribution to the nonprofit’s success. If we do change, I want to be the first one with the “I am Success Factor” T-shirt.
If you missed our past two editions of “Words to Know in the New Year,” check them out here and here. We welcome your feedback on these or other word shifts. Future articles will further delve into each of these topics, and we welcome your help in TrendSpotting others!
Suzanne, love the words that you highlighted. Interesting reflection on both of these phrases :”total rewards vs salary” and “success factor vs overhead rate”. Each represents a way for nonprofits to reposition themselves in a very competitive market for both talent and money. And each deals with the relationship of money to the nonprofit sector. Great insights!
I agree (and like) everything you said about Total rewards vs. Salary and Engagement vs. Involvement, but I don’t agree with the CEO vs. Exec Director. How does it not convey the skills that the person with the title has and/or needs? Also, if an organization was to change Executive Director to CEO, would other positions need to change as well? Director of Operations becomes COO, Financial Director becomes CFO, etc.?
Incredible points. Great arguments. Keep up the great effort.