In our most recent nonprofit leadership study, one of the things we looked at was how four different leadership styles affected a nonprofit’s “culture of philanthropy.” The four styles were: servant leadership, transformational leadership, charismatic leadership, and transactional leadership.
Servant Leaders Most Consistently Grow Philanthropy
The researchers’ definition of a culture of philanthropy was one in which both the CEO/Executive Director and others in the institution, like the board, participated in fundraising. In the report, the researchers go into more depth defining each leadership style. Here, we’ll just hit the high points.
Servant leaders showed the strongest link having a solid culture of philanthropy at their nonprofit. In reading this, I think it may be because servant leaders define success as serving those who report to them as well as serving those they report to. This modeling of serving appears to be more conducive to a “two way street” where those served also serve.
- The next most likely to have a strong culture of philanthropy were nonprofits led by leaders more in the transformational leadership style. Transformational leaders rally people around a common mission and vision. This style was found at times to produce a culture where both the CEO/Executive Director and others like the board participate in fundraising.
Why “at times”? When the researchers dug deeper into the data, they made a fascinating discovery. With this leadership style, a successful culture of philanthropy seems to hinge on the leaders own confidence. As the researchers state:
“Where leaders have a high level of confidence in their abilities, an enhanced degree of intellectual stimulation (i.e. encouraging non- traditional thinking and alternative perspectives) has a positive impact on philanthropic culture. Where that confidence is lacking, the effect is negative.”
This is particularly important because only about 1 in 5 surveyed said they had a high level of confidence in their leadership abilities.
- Charismatic leadership tends to be a style centered on the personality of the leader. This is likely present when boards say, “We don’t fully understand her, but she rocks! She can do whatever she wants because she’s amazing.” It could be for this reason that while the leaders do fundraising, they didn’t seem to be able to get others to do the fundraising too.
- The fourth style of leadership in the study was transactional leadership. This style focuses more on goals and rewards. I liken this to “Do your work and you get a paycheck” leaders. The researchers weren’t able to tie this style of leadership to a culture of philanthropy. But they did make an interesting observation: those identifying more as a transactional leadership style also were most likely to say their nonprofit was experiencing a shrinking budget. Since a study like this is more like a “snapshot,” we don’t know if transactional leadership causes less money to be raised or if less money being raised causes a more transactional style of leadership behaviors. But the link between transactional leadership and declining revenue is there.
The next most likely to have a strong culture of philanthropy were nonprofits led by leaders more in the transformational leadership style. Transformational leaders rally people around a common mission and vision. This style was found at times to produce a culture where both the CEO/Executive Director and others like the board participate in fundraising.
Charismatic leadership tends to be a style centered on the personality of the leader. This is likely present when boards say, “We don’t fully understand her, but she rocks! She can do whatever she wants because she’s amazing.” It could be for this reason that while the leaders do fundraising, they didn’t seem to be able to get others to do the fundraising too.
The fourth style of leadership in the study was transactional leadership. This style focuses more on goals and rewards. I liken this to “Do your work and you get a paycheck” leaders. The researchers weren’t able to tie this style of leadership to a culture of philanthropy. But they did make an interesting observation: those identifying more as a transactional leadership style also were most likely to say their nonprofit was experiencing a shrinking budget. Since a study like this is more like a “snapshot,” we don’t know if transactional leadership causes less money to be raised or if less money being raised causes a more transactional style of leadership behaviors. But the link between transactional leadership and declining revenue is there. Leadership Can Be Learned
It’s clear from the study that leadership styles significantly impact nonprofit fundraising. The good news? Leadership behaviors can be learned. So if you’re experiencing a decline in fundraising, or just frustrated with doing all the fundraising yourself, take a look at your leadership style. It might just hold keys to turning your culture around.
What’s your leadership style?
We all have a style of leadership that we consider “right” or “natural.” Learning what our style is can help us learn when we might want to adapt.
To find yours, take our free, 2-3 minute leadership style assessment at https://concordleadershipgroup.com/style.
Then download a free copy of “The Wake Up Call: A study of nonprofit leadership in the US and its impending crisis,” to see how your style correlates with fundraising. Get it at: https://concordleadershipgroup.com/report/
The Wake Up Call nonprofit leadership report was conducted by the Hartsook Centre for Sustainable Philanthropy and sponsored by The Concord Leadership Group, Bloomerang, Boardable, and DonorSearch. Get your own copy free at https://ConcordLeadershipGroup.com/report/
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