Introduction

As organizations that rely primarily on the generosity and good will of volunteers, nonprofits need strong leadership in order to be successful. Leadership sets the tone and expectations for the nonprofit, and it drives both the public and internal images of the organization. The consistency and cohesiveness of these images are crucial for recruiting and retaining volunteers, navigating changes, and fostering inclusion. This paper examines academic literature that discusses the role and impact of leadership in nonprofit organizations in terms of member retention, adapting with shifts in community needs, and fostering inclusion.

Nonprofit Member Identification & Retention

The work and success of most nonprofit organizations is impossible without a strong volunteer base. While the organization’s mission or cause is often what drives volunteers to donate their time and resources, the unpaid nature of the work requires other factors to encourage volunteers to remain with the nonprofit, i.e., develop member identification. Almas et al. (2020) focused their research on the direct and indirect effects of transformational leadership on volunteer’s intent to remain with a nonprofit. The study yielded two important findings: (1) if a volunteer coordinator or other leader implements a transformational leadership style, there is an increased likelihood that volunteers with remain; and (2) that a progression of volunteer satisfaction, organizational commitment, and role identity can partially influence a volunteer’s intention to remain with the nonprofit (Almas et al., 2020).

In their literature review, Phipps and Burbach (2010) propose that “effective nonprofit strategic leaders increase the organization’s learning capacity” (p. 141). In this particular proposition—one of six presented in the paper—the authors cite Jansen, Vera, and Crossan's (2009) finding that strategic leaders implement transformational leadership behaviors to encourage innovative thinking among organizational members. Phipps and Burbach (2010) contend that this finding can be applied similarly to nonprofit organizations. The idea that transformational leadership can challenge nonprofit volunteers to think creatively feeds into the three-step progression of satisfaction, commitment, and role identity proposed by Almas et al. (2020), thereby contributing to volunteers’ increased intention to stay with the organization.

Similar to these findings, research by Shier and Handy (2020) found that engaging internal stakeholders—in this case, nonprofit volunteers—is a crucial leadership tactic in fostering innovation. In their discussion about hiring and keeping the right people, the authors noted that a vast majority of survey respondents in their study felt it important that leadership actively work to promote and provide opportunity for staff engagement in innovation. Their research drew upon multiple studies that showed that internal leadership in innovative organizations often has a reciprocal approach, including transformational or servant leadership (Shier & Handy, 2020).

From the volunteer perspective, Wolfe (2019) shared a positive reflection on her own experience on a nonprofit board. Of the many aspects that gave her joy were “creative problem solving for challenges and fundraising initiatives” and “creative and inspiring projects” (p. 9). Wolfe’s sentiments reveal practical applications of the findings from the studies previously discussed in this section. Taken together, these sources exemplify the substantial potential impact of transformational leadership on nonprofit volunteers.

Leading Change in Nonprofits

Much like for-profit organizations, nonprofits are subject to major changes brought about by circumstances like changing demographics or community needs, rotation of leadership, and external crises like the COVID-19 pandemic. McMullin and Raggo (2020) focused on the dual role of leadership and management by most nonprofit boards, asserting that in times of major crisis the board must be “remarkably agile, flexible, and responsive to the ever-changing environment to ensure survival (p. 1185). The authors further explore various governance configurations to best mitigate a crisis and how the board can shift between leadership and management at various stages of working through the situation. A qualitative study conducted by Leviten-Reid et al. (2022) complements the research of McMullin and Raggo. Leviten-Reid et al. discuss one organization’s responses to the pandemic, including innovating traditionally in-person service work to continue serving the community under the physical distancing requirements at the time, and navigating fundraising challenges. Both articles maintain that the pandemic was a reminder that nonprofits need to be prepared for any eventuality and give them tools to accomplish that.

Racine (2003) takes a more broad look at nonprofit readiness for change, regardless of whether that change is planned, as it relates to the nature of nonprofits to replicate what works. Analyzing three dualities of nonprofits—replication versus adaptation, competition versus cooperation, and systems versus leadership—Racine examines how each of these can instead be bridged in order to strengthen nonprofit effectiveness. If these dualities can be overcome, Racine maintains, then replication may continue to be a good strategy for nonprofits. However, that requires the organization to recognize the benefits and shortfalls of both sides of those dualities. This same approach would allow nonprofits to respond better to both changes in leadership, changes in community needs, and unplanned changes like external crises, as discussed by McMullin and Raggo (2020) and Leviten-Reid et al. (2022).

Fostering Inclusion in Nonprofits

The need for increased diversity in business is generally a result of market demand, but when it comes to philanthropy, no external circumstances are pressuring nonprofit organizations to value diversity and foster inclusion (Nielsen & Huang, 2009). Instead, diversity must be an active choice for nonprofits out of respect for the clients they serve. In this way, choosing diversity increases the effectiveness of nonprofit programs and demonstrates an ethical commitment. Nielsen and Huang noted that millennials “are looking to the nonprofit sector to give them opportunities to work in multigenerational, multiracial, and otherwise diverse partnerships to build the ‘civic infrastructure’ needed to fulfill a truly pluralistic society” (p. 6). Leslie and colleagues (2021) described Generation Z similarly in their discussion of multiple generations of workers, saying that generation Z adults are particularly interested in working for organizations that make a social impact.

Ten years after Nielsen and Huang’s research, Brimhall (2019) realized that nonprofit leaders are still looking to understand how to exemplify and facilitate inclusion in their own organizations. Brimhall explored the effects of inclusion both within and outside nonprofits (Brimhall, 2019; Brimhall & Saastamoinen, 2019). Both of these studies maintained that leader inclusiveness engagement is critical to fostering inclusion in nonprofits. Such behaviors include inviting, respecting, and valuing the participation and contributions of every member of the organization. Brimhall (2019) offered a multilevel conceptual model of the direct and indirect effects of leader engagement. She proposed that leader engagement directly influences a climate for inclusion and for innovation. Further, a climate for inclusion resulting form leader engagement also mediates a climate for innovation, and both factors mediate job satisfaction and perceived quality of service. As proof of her findings, Brimhall also referenced evidence of the many benefits of inclusion in organizations in other countries, including the United Kingdom, Germany, Spain, and Canada. Brimhall and Saastamoinen (2019) also discussed the positive internal effects of leadership engagement, as well as the external effects of promoting social justice and working toward social good. By studying nonprofit employees, the authors were able to identify those who felt more valued or less valued, which coincided with several demographics. This find is interesting but not at all surprising. In response to their findings, Brimhall and Saastamoinen proposed that, by understanding what groups of workers feel less valued, leaders can know better how and where to invest resources in order to create more inclusive work environments. Following through on such work requires nonprofit leaders to be able to pivot as needed.

Nielsen and Huang (2009) also discussed this idea with their reference to “fluent leadership” and the need to be continually aware of the challenges of disparity, power dynamics, and inequality, which helps to integrate inclusivity into the culture of the organization. While McMullin and Raggo (2020) discussed the need for leadership to be “remarkably agile, flexible, and responsive to the ever-changing environment” (p. 1185) in terms of mitigating the devastating effects of crises, this idea can easily be applied to the changing needs of the community, both those serving, and those who are being served.

Conclusion

As the impact of nonprofits has grown over decades, these organizations have come to be defined as the third economic sector, alongside the public and the private sectors. Nonprofits occupy a unique place in the economy, as they are not typically self-funded, relying on community support from the other two sectors, and serving those who engage in all parts of the economy. Strong leadership in these vital organizations is essential for the survival of both the organizations and those they serve. To that end, nonprofit leaders must actively work to recruit and retain workers, be prepared for both anticipated and unexpected change, and cater to the needs of all through diversity and inclusion practices. The research in this paper discusses these critical skills, evaluates methods for executing on these imperatives, and offers suggestions to help nonprofits strengthen their foundations in these areas.