Have you ever wondered why so many nonprofit leaders are departing? This emerging trend has some basis in historical events, beginning in January 1964, when President Lyndon B. Johnson declared a “War on Poverty” during his inaugural address. At the time, the national poverty rate was 19%, and Johnson believed poverty stemmed from systemic issues like inadequate education, limited access to healthcare, and insufficient housing. His ambitious vision included improving schools, healthcare, and housing; expanding job opportunities; providing temporary assistance for those in need; combating discrimination; revitalizing regional economies; and promoting adult education and workforce training.

For decades, the nonprofit sector has been driven by passionate Baby Boomer and Gen X leaders dedicated to advancing social change. Now, many of these longtime leaders are retiring, shifting to new careers, or exploring consulting and entrepreneurial opportunities, creating a significant leadership transition. As the poverty rate remains steady at 11%, nonprofits must grapple with an urgent question: What’s driving this shift, and how can organizations prepare for the next generation of leadership?

The pace of these changes is accelerating. Nonprofit leaders have a median age that surpasses the average across all U.S. workers, and leadership turnover in the sector typically falls within the 20–25% range. However, in some areas, due to the intensity of external pressures, up to 75% of nonprofit leaders are projected to step down in the coming years. This turnover is especially pronounced in direct service nonprofits, such as those in human services and healthcare, where emotional demands and financial constraints are particularly acute.

This wave of leadership transitions brings important concerns for the sector, including the reasons behind so many nonprofit leaders stepping down now and the actions organizations can take to prepare for this significant shift.

Why Are So Many Nonprofit Leaders Departing?

Several factors are driving the current wave of nonprofit leadership transitions, causing Boards to be in a state of perpetual leadership planning. While each organization may have its unique challenges, much of this trend can be attributed to these key workforce dynamics:

The Aging Workforce

Every day, approximately 10,000 people in the U.S. turn 65, reflecting the natural aging of the workforce across industries. Nonprofit leadership is no exception. Many leaders have devoted decades to their organizations, often staying well beyond the typical retirement age due to the deeply personal nature of their work. For example, a COO recently retired at age 83 after working with a housing-focused nonprofit since her mid-20s. Even the most committed professionals eventually step back, leaving a leadership gap. Many leaders also feel they’ve achieved their goals within their organizations and are ready to pass the baton to a new generation equipped to bring fresh ideas and ensure the mission remains relevant in a changing world.

The Nature of the Job

Nonprofit leadership is deeply fulfilling but comes with unique and relentless challenges. Leaders must balance mission-driven objectives with operational realities, often while being understaffed. They juggle tight budgets, navigate complex relationships with donors and boards, and manage a multigenerational workforce spanning five distinct generations—an increasingly difficult task. Fundraising remains one of the most pressing and stressful demands. The constant need to secure funding is emotionally draining, leading to burnout among even the most resilient leaders, particularly in human services. Frequent policy changes at the national level further complicate matters, creating uncertainty and stalling organizational operations, making an already demanding role even more challenging.

Life/Work Balance

The pandemic reshaped how Americans view work and life, and nonprofit leaders were no exception. Many faced unprecedented challenges, from transitioning to remote operations to addressing increased community needs during the global crisis. For some, these pressures proved to be a breaking point. Others saw opportunities to improve their organization’s culture after a Culture Audit by prioritizing staff well-being and rethinking traditional work models, but that meant significant changes in work pace, productivity, and how the work is conducted. These shifts have prompted leaders to evaluate their own balance, approach to team engagement, and the sustainability of their roles, leading some to step away for a much-needed reprieve.

Preparing for the Leadership Transition

With transitions on the rise, nonprofit boards must act proactively. Maintaining open communication with current leaders is essential to establishing clear timelines and beginning to plan budgets, salaries, and the desired leadership profile.

Investments must also be made in people, organizational structures, and culture. Embracing change, rather than fearing it, is vital for ensuring ongoing success and mission advancement.

As nonprofit leaders depart, it’s clear the nonprofit sector faces a crucial turning point. By understanding the underlying reasons for this shift and taking proactive steps to prepare for the future, organizations can ensure they are prepared to further their important missions. Learn more about “What Do We Do About It?” in Part 2 of our KEES blog series.

Curious to learn about what’s driving these changes? Reach out to KEES President and CEO Heather Eddy at heddy@kees2success.com to schedule a conversation.

Sources: https://federalsafetynet.com/poverty-statistics/#history, https://buildingmovement.org/reports/the-leadership-in-leaving/