Organizational leadership has long been a topic of social science researchers. Literally hundreds—if not thousands—of studies regarding leadership and its many elements have been conducted over the decades, and scores upon scores of papers have been published. When it comes to nonprofit organizations (NPOs), however, the majority of studies have relied on for-profit leadership theories. Unfortunately, most of these studies consider only a very narrow element of NPO success, failing to place the element studied into a broader context of NPO success or failure.

A Square Peg in a Round Hole

Many times, studies have attempted to force the square peg of for-profit enterprise (FPE) leadership into the round hole of NPO leadership.

At least one leadership guru—Peter Drucker—recognized the differences between for-profit firms and NPOs:

The nature of the problems that a foundation tackles is exactly the opposite of business. In business, you look for easy things, very good businesses that don’t have very many problems and that almost run themselves. . . In the philanthropic world, you’re looking at the toughest problems that exist. The reason why they’re important problems is that they’ve resisted the intellect and money being thrown at them over the years and they haven’t been solved. You have to expect a lower batting average in tackling the problems of philanthropy than in tackling the problems of business (Phipps & Burbach, 2010).

Clearly, there are significant differences between NPOs and FPEs. And yet, too many researchers have assumed that leadership is leadership—that it matters not what type of organization the leader is seeking to lead.

But, this couldn’t be further from the truth. While NPOs and FPEs have many similarities, they require different leadership styles.

Common Ground in Leadership

First, let’s look at things NPO and FPE leaders have in common.

For example, a human resource system that includes adequate selection, training, coaching, evaluation, and compensation is necessary for both types of organizations. The actual implementation of the system might differ slightly between the two, but the components of the system itself are similar.

Another example of crossover between FPEs and NPOs is the area of organizational mission statements. The vast majority of FPE mission statements are constructed around financial ends. Things like quality management, financial performance, and shareholder return are often the focus of FPE mission statements. However, NPO mission statements do not generally include financial terminology; they are more apt to focus on changing lives, improving conditions, or achieving a philanthropic purpose.

Both FPEs and NPOs need mission statements; however, they are vastly different in their implementation.

Different Leadership Demands

The different situations, goals, and functions of NPOs and FPEs demand different kinds of leadership. Among the most obvious dissimilarities between FPEs and NPOs would be organizational advancement.

Certainly FPEs require a degree of marketing, public relations, and public affairs activities in order to achieve their shareholder-driven missions. However, to the leader of an NPO, the purpose of organizational advancement is to increase donations, raise public awareness, or other charitable cause.

Program delivery would be another area of dissimilarity between NPOs and FPEs. In the typical NPO, programming is aimed at achieving a particular charitable objective, such as reducing chronic truancy, increasing zoo attendance, or mitigating the effects of human encroachment on a species of animal. For FPEs, program delivery would be a foreign concept. The closest activity to program delivery would be order fulfillment or achieving specific quarterly results for shareholders.

The Solution for NPO Leaders

So, what is a nonprofit leader to do? His or her job requires a different style of leadership, yet many studies and leadership resources out there treat all leadership alike.

To address the specific needs of nonprofit leaders, we created the Civicus Alignment and Risk Assessment Model. This audit will show you which areas of your organization need improvement, whether your staff and board are unified in their understanding of your strategic plan, and how you can create a more effective organization.

The Civicus Alignment Pyramid assesses more than 100 touch points and analyzes things like staff interviews, survey results, internal communications, bylaws, and corporate documents to give you a very clear picture of how you can more accurately lead your nonprofit.

Be sure to check out our blog post, here, which explains our model in more detail. Contact us at 815-985-6794 for more information or to learn how we can help your organization.