The Gap Between the Outward & Inward Focus of the Nonprofit World

Last week, I was invited to speak on nonprofit leadership, focusing on navigating tough times and strengthening leaders. It was a wonderful chance to share my insights and hear from colleagues about their hurdles. As the nonprofit sector evolves rapidly, organizations must constantly adapt their programs to shifting resources and funding. A common sentiment has emerged among my peers amid these changes—a need for stronger leadership.

What has become increasingly evident is the significant gap between the outward and inward focus of the nonprofit world. Our energy is directed toward impact, donors, and the constituents who benefit from the organization’s mission. Yet, what is often overlooked is the internal structure—the human infrastructure responsible for leadership, daily operations, securing funding, and implementing programs.

As of 2023, there are 1.8 million nonprofit organizations in the US—an increase of 85% since 2000. Here is another surprising fact about nonprofits: More than 10% of companies in the US are nonprofit organizations, accounting for approximately 6% of the country's economy. Nonprofit organizations are the third largest employer behind manufacturing and retail. So, what does that tell us? That there are millions of passionate, purpose-driven people in the US who dedicate their time and talent to the nonprofit sector.  

Here are some more surprising facts:  

• Nonprofits have the highest turnover rate—21% vs. 12% in the for-profit sector—due to burnout and lack of support.
• The average frontline fundraiser lasts just 18 months, yet it takes three years to build lasting donor relationships.
• Replacing an employee costs 50% to 200% of their salary..
• For example, if an employee earns $60,000 annually, replacing them could cost $30,000 to $45,000 in recruitment, onboarding, salary adjustments, and benefits.
• The Hidden Cost: Beyond recruitment expenses, turnover leads to lost relationships, institutional knowledge, and momentum. The potential financial impact on an organization? $100,000 or more.

What if we focused on closing the gap that exists between our outward and inward priorities? What if nonprofit organizations invested in their people—the Board, the staff, and the volunteers—through coaching, leadership development, and organizational alignment? How much stronger, more impactful, and more successful would the organization be?  

Return on Investing in People:

• Investing $5,000–$15,000 in organizational wellness programs costs a fraction of replacing just ONE employee.
• Organizations that invest in professional wellness see a 70% improvement in performance, particularly in management and leadership roles.
• Coaching can boost employee engagement and retention by up to 60%, leading to higher productivity and stronger commitment.
• Organizations that leverage coaching often experience a 25% increase in employee retention, significantly reducing hiring and training costs.
• Coaching improves communication skills by approximately 50%, strengthening teamwork and collaboration.

I am deeply passionate about nonprofits and the dedicated individuals who power them. My decision to become a performance coach and pursue Rutgers University’s Leadership Coaching for Organizational Performance stems from firsthand experience with the need for stronger leadership and the disconnect between external impact and internal support within the sector. 

Now more than ever, nonprofit organizations need strong, adaptable leaders to navigate challenges, foster innovation, and drive meaningful change. Leaders must also be equipped with the right tools—from improved decision-making and stakeholder engagement to effective social change management. It’s time to shift focus and invest in purpose-driven people to maximize their potential and the organizational impact.