Nonprofits Face Generation Gaps For Boards Donors

Call it the “Boomer Bottleneck.”

The oldest members of Generation X, 46 million Americans born from 1965 through 1981, are reaching age 40 this year, the advance guard of a generation that ultimately will replace the 80 million Baby Boomers, born from 1946 through 1964, the youngest of whom turned 40 last year.

That generational shift, compounded by the aging of 75 million “Traditionalists” born before 1946 and the 76 million “Millennials” born from 1982 through 2000, creates big challenges for nonprofits in diversifying their boards to better serve increasingly diverse constituencies, experts said.

Boomers increasingly dominate nonprofit boards, they said, and are not doing enough to welcome their elders or younger generations as members.

“We’re losing a lot of our pre-World War II, ‘Greatest Generation’ people, and we’re not inviting younger people,” said Sandra Hughes, a consultant on nonprofit governance in Sarasota, Fla. “We’re pushing people out at one end and not inviting people in at the other.”

People ages 40 to 59, essentially Boomers, accounted for 54 percent of nonprofit board members, according to a 2004 survey of nonprofit chief executive officers conducted by BoardSource.

In comparison, people age 70 or older accounted for only five percent of board members, and people under age 30 accounted for just 2 percent.

Five years ago, in an article in The NonProfit Times , Hughes called on nonprofits to bridge generational gaps in the boardroom.

“Differences in skills and styles can work to the board’s advantage,” wrote Hughes, at the time senior governance consultant and executive adviser to the president at the National Center for Nonprofit Boards in Washington, D.C., now BoardSource. “If a board ignores the differences, however, it runs the risk of marginalizing board members who have a great deal to offer.”

Today, she said, the focus closing the generation gap on boards has waned, despite the growing need to broaden their membership to better serve their communities.

Boomers now dominate nonprofit boards, she said, while the Traditionalists born before 1946 are not represented on boards as much as they were in the past.

But new generations bring important new perspectives and can breathe new life and ideas into organizations, she said.

She credited innovative nonprofit enterprises, such as bookstores at local Goodwill Industries sites and ReStore shops at local Habitat for Humanities chapters, to the entrepreneurship and “franchise-industry mentality” of Generation X. “That changes the board room,” she said.

Underperforming asset

Deborah Hechinger, CEO of BoardSource, said boards have become an “underperforming asset” at a time when boards are focusing increasingly on compliance and neglecting their role in advancing their nonprofits’ mission and work.

To help boards move from “passive stewardship to active leadership in order to make a discernable difference in their organizations,” BoardSource in June released “The Source: Twelve Principles of Governance That Power Exceptional Boards.”

One of those principles, known as “Revitalization,” calls for boards to “energize themselves through planned turnover, thoughtful recruitment, and inclusiveness.”

Diversity and inclusiveness “bring an array of perspectives to the table,” Hechinger said, and “are important in building boards that are able to meet the constituents’ needs and the community’s needs that they serve.”

Some boards like to recruit younger members “because they like to have a voice at the table that has a different perspective than another board member who may be in their 50s or 60s,” she said.

“What is important is for boards to assess what a particular organization needs,” she said, “and then seek the kinds of voices at the table that help the organization and the board make the best decisions they can.”

A big challenge facing nonprofit boards today is “making a discernable difference in the organizations on whose boards they serve,” Hechinger said. “They make that discernable difference by executing their fiduciary responsibilities and by bringing intellectual, reputational and financial capital to the organization needed to meet its mission.”

Making that difference is the idea behind the 12 principles of governance spelled out in the new BoardSource publication.

One principle, “constructive partnership” between the board and CEO, for example, can be accomplished through strategies such as “independent open-mindedness, through the importance of a culture of inquiry on the board, through a culture of compliance, and ethics, as well as the importance of making sure that the organization has appropriate resources to live up to its obligations,” Hechinger said.

Talent gap

Bridging the generation gap is critical for nonprofits, said Lynne Lancaster, a partner in Sonoma, Calif., for BridgeWorks, a Minneapolis-based research and consulting firm that focuses on generational issues.

“If they are going to serve four generations of constituents, and if they are going to engage four generations of volunteers and donors,” she said, “then they need multi-generational boards to help them understand what makes each of those generations tick.”

At community foundations in states like Kansas, Michigan and North Carolina, said Hughes, young people have been named to advisory groups to decide how to distribute funds to local charities.

Getting youth involved in giving can prepare them for serving on boards, and represents the kind of tailored approach nonprofits should use to engage each generation, she said. “The motivations and the reasons for people being on boards is different by generations.”

Stability, security and loyalty, for example, motivated the World War II generation, she said. “This is the group that would always be there,” she said. “They would even serve on a bylaws committee. They would give regularly.”

But with the youngest members of that generation turning age 60 next year, she said. “We’re not including them as much on boards as we used to.”

That’s a big mistake, said Lancaster, because that older Traditionalist generation, like the Boomers, Xers and Millennials, represents a critical pool of nonprofit volunteers and donors. “We’re looking at a talent gap down the road,” she said.

To tap the potential of all four generations, she said, nonprofits “need to understand the influences that shape each generation, and some of the traits they tend to exhibit and the preferences they have for how they want to get engaged.”

Hechinger said that boards, in identifying possible new members, should “think about the organization’s future needs and the competencies of current board members.”

And in assessing current members, she said, boards should look at their personal characteristics and experiences, the boards’ overall makeup, and the need for new members to “help strengthen the understanding of the institution’s constituencies or communities.”

The matrix

Exceptional boards “see the correlation between mission, strategy and board composition,” seek diversity in terms of “personal and professional backgrounds and experiences,” and “welcome differing voices and an array of perspectives,” says the new BoardSource publication.

Those boards “are acutely aware of the need for members who possess knowledge of the nonprofit sector, superior financial acumen, ability to secure funding, and personal characteristics and experiences that positively enrich group interaction,” The Source says. “They also use board composition as a strategy to increase understanding of their constituencies and community needs.”

Hughes said nonprofits should complete a “matrix” that identifies attributes, skills and experience of board members.

Nonprofits then should examine whether the board truly represents the community and, based on the organization’s mission, develop a model that fills any gaps and creates the most effective board.

“Think of creative ways to set up an organizational structure that is inclusive,” she said. That might include a youth advisory group, founders’ council, past president’s group or planned-giving group.

Nonprofits also should develop fundraising strategies that engage each generation, she said. “The three best fundraising techniques are cross-generational,” she said, including the sale of Girl Scout cookies; running and walking events; and reunions.

Lancaster said nonprofits should overcome stereotypes about each generation, understand the forces that shaped them, and develop strategies to engage them by playing to their strengths.

While Millennials are viewed as “just kids,” for example, the area “already giving and volunteering, and there are 76 million of them,” she said. “Why take a look at ways to involve them and create a lifelong relationship.”

Gen Xers are viewed as “hard to engage and not very loyal,” she said, yet the “reality is they’re determined to have a work-life balance and spend time with their families,” so nonprofits should develop family-based board activities and consider shorter board assignments and alternative meeting times.

Boomers are seen as hard workers who will “always be around,” she said, but many of them are burning out, so boards should “focus on bringing in some new faces and give Boomers a break.”

And while Traditionalists are known for giving their money, not as many give their time, so nonprofits should find ways to invite them in, particularly at the “critical transition point when people are retiring and are looking to redefine their identity and may be willing to come and redefine that identity with you,” she said.

“We need to understand the influences that shape each generation,” she said, “and some of the traits they tend to exhibit and the preferences they have for how they want to take part.”

Todd Cohen is editor and publisher of Philanthropy Journal, an online newspaper at www.philanthropyjournal.org. He can be reached at tcohen@ajf.org