When discussing executive leadership, for-profit CEOs might be the first group that comes to mind. However, the executive directors in the nonprofit sector operate under unique conditions (and challenges) that call for exceptional nonprofit leadership skills.
Dive in below to 12 key leadership skills for nonprofit leaders, plus strategies for leadership development, professional growth in the nonprofit sector, and stronger nonprofit management.
1. Vision and Strategic Thinking
Nonprofit leaders are guided by their future vision for their organizations. This acts as a catalyst for setting long-term goals, developing short-term benchmarks designed to achieve them, and ensuring the entire organization is aligned around its common, shared vision. A future vision (written down as a formal vision statement) paired with strategic thinking creates the framework for a nonprofit leader to achieve and expand an organization’s mission.
2. Fundraising and Financial Management
Nonprofit financial management is complex, and executive directors leverage their fundraising and financial management skills for success. This entails the executive director cultivating donor relationships, upholding financial transparency to create trust with donors, and ensuring financial compliance with governing bodies.
Although a nonprofit’s board of directors is ultimately responsible for overseeing financial management and legal compliance, executive directors work closely with the board to develop operating budgets and fundraising strategies. Leaders then act as a liaison between the board’s strategy and the rest of the nonprofit team to ensure programs have the funding they need, within the available budget.
Nonprofit leaders also work with the board and accounting department to collect financial and operational data while tracking key performance indicators (KPIs) for measuring performance, donor retention, and the return on investment (ROI) of programs, events, and fundraising campaigns to demonstrate effectiveness.
3. Emotional Intelligence and Empathy
The most successful leaders demonstrate emotional intelligence. The ability to understand, recognize, and manage emotions within themselves and in others makes nonprofit leaders more influential and trusted. Having high emotional intelligence and empathy supports better team engagement and morale, not to mention solid relationships with donors, volunteers, communities, staff, and directors.
4. Communication and Storytelling
Nonprofit leaders can leverage effective communication to inspire stakeholders, donors, and teams. Whether in a meeting with a donor, presenting at an event, or creating a compelling annual report to share, having a knack for storytelling is a powerful way to demonstrate an organization’s impact while connecting emotionally with audiences.
5. Team Building and Volunteer Management
In addition to donor management, nonprofit leaders are responsible for recruiting, training, motivating, and retaining paid staff and volunteers. Leading with a growth mindset and being sure to recognize everyone’s contributions to the mission can help boost retention, collaboration, and productivity in a way that bolsters a positive culture.
6. Data-Driven Decision-Making
Rather than relying solely on instinct or gut feelings, successful nonprofit leaders combine intuition developed through experience with data-driven insights. Data analytics helps maximize the ROI of every dollar that enters the organization by evaluating performance, donor engagement, and overall impact—while also identifying which programs deliver the strongest results.
Some valuable KPIs that nonprofit leaders may track include metrics like:
- Program success rate
- Volunteer participation
- Cost per beneficiary
- Donor retention rate
- Average gift size
- Fundraising efficiency
- Donor lifetime value
- Program expense ratio
- Operating reserve ratio
- Digital engagement
7. Change Management and Adaptability
Change management skills enable nonprofit leaders to operate with flexibility and adaptability, supported by innovation and thorough, organization-wide contingency planning. Nonprofit organizations experience almost constant change due to:
- Volatile economic conditions
- Shifts in funding
- Changes in the availability of grants
- Growing and evolving community needs
- Frequent modifications to regulatory environments
8. Advocacy and Relationship Building
Nonprofit leaders can lean on their communication skills to advocate on behalf of their organizations — explaining their missions and their importance — while building strong relationships with donors, partners, stakeholders, and their communities. Advocacy efforts can help expand the organization’s reach, secure funding, lead to creative partnerships with local businesses and other nonprofits, and drive policy changes that support an organization’s mission.
While a business owner can found a business and expect to own and operate the entity for as long as they are fiscally successful, no one can “own” a nonprofit — not even the founder. Depending on the size and structure of an organization, nonprofit leaders work with a board of directors or trustees who have fiduciary and legal oversight. A nonprofit board has the power to remove an executive director or founding nonprofit president at any time. Thus, skill sets encompassing communication, collaboration, relationship building, and future vision can prove integral for the success of executive directors and their missions.
9. Ethical Decision-Making and Integrity
Financially speaking, every penny truly counts for nonprofit organizations. In terms of reputation, the perception of a nonprofit in terms of trustworthiness, accountability, transparency, and effectiveness can make or break its relationship with the community, donors, volunteers, and staff.
For these reasons, nonprofit leaders will ideally possess integrity and the ability to make objectively ethical leadership decisions. Otherwise, under scrutiny of their donors, beneficiaries, regulatory bodies, charity watchdog organizations and the public, nonprofits risk damaging the organization’s reputation while losing trust and support from donors.
10. Innovation and Digital Literacy
Proficiency with technology is invaluable for nonprofit leaders in today’s world, where donors often prefer digital channels for connecting and giving. Nonprofit leaders can leverage technology to support innovation that improves operational efficiency, donor engagement, reach, and fundraising with tools and strategies such as:
- Website marketing
- Social media campaigns
- Digital events
- Online giving tools
- Artificial intelligence (AI)-powered solutions
11: Conflict Resolution and Negotiation
Nonprofit leaders may find themselves responsible for mediating between members of staff, volunteers, beneficiaries, the board, the community, and external stakeholders to resolve conflicts and negotiate on behalf of the organization. Emotionally intelligent leaders who practice empathy, active listening, and negotiation skills may be better equipped to resolve conflicts and promote collaboration.
12. Resilience and Self-Care
Many nonprofit leaders have at least some concern about burnout (within themselves or their staff). Leading a nonprofit is often more than a career or full-time job; for many leaders, their commitment to the causes of the organizations they run and their passion for the people they help become intertwined with their lifestyle and identity. Despite their dedication, nonprofit leaders who prioritize self-care and create a strategy for maintaining work-life balance may be better positioned to avoid burnout. After all, they have the influence to set a solid example and cultivate a culture of wellness within their teams.
How to Build and Develop Nonprofit Leadership Skills
No one is born with all of the above leadership skills and qualities that compose a successful nonprofit leader. That’s why any professional can benefit from committing to continuously strengthening their leadership skills through ongoing personal and professional development, continuing education, hands-on experience, and mentorship.
Invest in Professional Growth and Development
Nonprofit leaders can invest in and participate in professional development opportunities such as nonprofit-focused training events, workshops, and certificates as well as networking and coaching. Additionally, they might explore informal learning opportunities with books, podcasts, and industry publications and resources.
Pursue a Master’s Degree in Public Administration (MPA)
Advanced education in public administration provides a formal, well-structured opportunity for current or future nonprofit leaders to hone vital skills in financial management, fundraising, governance, program evaluation, and strategic planning. Through the educational experience, leaders deepen their understanding of connections in the public sector and further establish ethical leadership skills.
Seek Mentorship and Coaching
Nonprofit leaders can find and connect with mentors and coaches through an advanced degree program and by joining nonprofit industry associations, professional networks, and specialized programs. They may also access mentorship through professional consulting services.
Gain Hands-On Experience
The ultimate way to develop leadership skills is to actually lead in the real world. If you are not yet in a nonprofit leadership position, gain hands-on experience by volunteering for leadership roles in school, in the community, or within your office.
Build a Strong Network
Thriving leaders know where to find answers and solutions — and frequently, these solutions lie with people with skills, knowledge, donor potential, and valuable connections. Nonprofit leaders rely on a robust network of professional connections to support their organizations while also growing their donor base.
Embrace Lifelong Learning
Understanding that there is always room to improve, leaders with a growth mindset actively seek opportunities for lifelong learning, self-improvement, and leadership development. In addition, they encourage the same kind of learning throughout their organizations.
Reflect and Self-Assess
Criticism and constructive feedback help leaders elevate their skill set. Remain open to reflecting on your leadership performance, listen to peers and colleagues, and apply what you learn to improve your leadership abilities.
Key Takeaways
Nonprofit leaders inspire teams, establish sustainable organizations, and create lasting impact. Continuously strengthening one’s leadership skills is central to success in the nonprofit sector.
Fostering Leadership Development With Johnson & Wales University
At JWU Online, our Master of Public Administration degree program is designed to support nonprofit leaders by presenting the opportunity to develop their knowledge and skills in leadership, community resources, and public initiatives — all with a flexible online learning format.
For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].
