COVID-19 has brought a new focus on how nonprofit boards handle organizational strategies during times of crisis.
Before the COVID-19 pandemic, nonprofit institutions accounted for at least 12.5 million total jobs. As public records show, in the first three months of the pandemic, the nonprofit sector shed some 1.64 million jobs, reducing the entire workforce by 13.2% as of May 2020.
Traditionally, nonprofit has two central governing bodies: The Board of Directors and Executive Management. Both serve very different purposes; there is a clear distinction between the Board governance and the Executive management.
In very simplified terms, the Board develops a mission, sets policies, and provides a structure for daily activities to fulfill its mission. In contrast, Executive Management wants to promote change, inspire, and empower staff to reach their highest potential.
As the global pandemic threatened the mere existence of thousands of organizations, a review of the various types of contingency planning shows that flexibility in the leadership structure is the key to survival. This flexibility theory was already developed in “Bradshaw’s (2009) Contingency Model of Governance.” It has proven to be the appropriate response during the ongoing crisis. The same theory was also explored by Smith & Phillips in 2016.
“Typically, the Board’s strategic role translates into a focus on developing organizational mission, vision, and policies; however, a crisis may challenge this traditional role when short-term decisions must be prioritized over long-term planning. As scholars have noted, times of change require nonprofits to reconsider governance structures and the Board’s composition to ensure that board members possess the skills and attributes necessary to pursue their oversight function and guide the organization through tumultuous times (Smith & Phillips, 2016).
Indeed, the pandemic’s initial shock required a pendulum swing between the two traditional roles. Boards needed to contribute to emergency planning to help the organization weather the storm. In such a context of crisis, Board’s quest to find the appropriate balance between leadership and governance proved that heightened involvement with the executive director’s role was the key to success.
With this in mind, Execsearches.com will share a follow-up report in the new year. The forthcoming information will dive into the specifics of how the pandemic has affected the recruitment of Nonprofit Executives and link identifiable trends to the pendulum swing observed.
EMPLOYMENT RECOVERY in numbers since the spring of 2021:
The following tables give us an idea of how the nonprofit sector handled staffing needs during the pandemic. Approximately 1.5 million 501(c)3 organizations are based in the United States. (source: Candid / National Center for Nonprofits). The nonprofit sector retained its position as the third-largest employer in the U.S, behind retail and manufacturing. In 2020 it employed approximately 12.5 million Americans or one in every ten working Americans. More than half or 6.25 of these jobs are in Healthcare and Social Services (Nonprofit Quarterly.) Estimates show that the sector lost 1.6 million jobs in the early months of the COVID-19 pandemic between March and May 2020.
(Source: Johns Hopkins Center for Civil Society Studies 2020 Nonprofit Employment Report & Center for Civil Society Studies https://ccss.jhu.edu/july-2021-jobs/
NOTABLE CHANGES as of the second half of 2021:
The educational field had substantial recovery of 28,300 jobs—an increase of nearly 15%. Religious, grantmaking, civic, professional, and similar organizations grew by over 20% during the month, adding over 10,000 total jobs. Nonprofit arts, entertainment, and recreational organizations added over 8,000 jobs in July, increasing employment in this sector by more than 11% over June’s numbers. The nonprofit social services field added over 13,000 positions in July, a gain of 5% since June. Nonprofit health care institutions added nearly 16,000 jobs during July—an increase of almost 7% over June. Ambulatory health care services also added 6,157 jobs in July.
However, nursing and residential care facilities continued to shed jobs in July 2021, losing nearly 5,000 workers during the month, continuing a 14-month trend of additional job losses in this field since the onset of tracking the recovery.
In summary, significant shares of the initial 1.6 million lost nonprofit jobs were recovered, regaining a combined 40.6% of these lost jobs. Spring of 2021 saw a more robust overall recovery, with March, April, and May making up an additional 9.6% of the losses. Summer 2021 has continued this strong recovery, with June’s adjusted 68,000 recovered jobs representing 4.2% of the initially lost 1.6 million jobs and July’s 67,000 recovered jobs representing a similar 4.1% recovery.
As of Q4 2021, nonprofits have recovered a combined 62.6% of the jobs lost as of May 2020. Despite this encouraging progress, the latest figures published by Johns Hopkins Center for Civil Society Studies confirmed that 485,190 fewer jobs now exist compared with pre-pandemic levels.