January 29, 2018; Pittsburgh Tribune-Review
The Pittsburgh-based Bayer Center for Nonprofit Management at Robert Morris University published a new report this month: “What Now: How will the impending retirement of nonprofit leaders change the sector?” It suggests that many baby boomers will be leaving nonprofit staff and leadership positions over the next ten years, a stance with which we won’t argue despite the fact that that similar warnings based on self-reports of intended departures have proven less than completely accurate in the past. For now, we’d also like to refrain from the usual “what will become of us” approach to the issue and focus instead on some of the report’s useful findings.
The first point, which we think is well made here, is that many of those who might like to retire may have to do so with inadequate financing. The report finds that 49 percent of the executives surveyed reported having less than $50,000 in retirement savings. That in itself might suggest that some baby boomers will resist moving along even in the face of, as one leader puts it, “losing your fastball.”
The amount of retirement savings is alarmingly low throughout society. However, there is a positive correlation between preparation for retirement and level of educational attainment (Annual Transamerica Retirement Survey, 2015). Nonprofit professionals are demonstrably well educated. Based on the findings from our most recent Wage and Benefit Survey (2017), 67 percent of executives reported possessing an advanced degree compared to 11 percent of the general public (U.S. Census, 2015). Yet their higher educational attainment and long tenure does not translate into greater retirement security. In fact, a recent Fidelity Investments study shows that nonprofit professionals with similar salaries to those in the private sector have on average 23 percent less saved in employer sponsored retirement accounts (Panepento, 2007). Other studies indicate much longer job tenure in nonprofits over for-profits (Bureau of Labor Statistics, 2016; Wage and Benefit Survey, 2017). Nonprofit people came—and stay!—for the cause. How can we foster programs, services, and policies to help create a better future for those who have served so faithfully?
Now, that is an excellent question. When the future may hold a measure of financial bleakness, declaring one’s imminent departure is a big step—and that, in turn, may retard measured succession planning. Sometimes, you just have to follow the money.
Meanwhile, the report makes other interesting points, including this one:
Many younger people report that they do not want the executive director job! A generation that often places a high priority on work-life balance has closely observed work-stressed elders coping with governance and funding challenges, working long hours for low pay and now not able to retire. They have some understandable criticism of the way the sector is currently built. New models of agency leadership need to be explored.
—Steve Dubb and Ruth McCambridge