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Keywords: Nonprofit human resources, staff development, staff, talent development, leadership, grantmaking strategyPart I - The Nonprofit Talent ChallengeFraming the IssueThe workforce challenge facing the social sector has been characterized primarily as a leadership crisis or deficit (Tierney, 2006; Eisenberg 2004; Schwarz, 2003). The narrative is premised on the idea that baby boomer nonprofit executive directors would begin retiring at the traditional age. This has not come to pass. The story line also suggests that this exodus will leave too few people to fill the vacated slots. This framing conflates management and leadership into one challenge, ignoring the distinction between these ideas and making invisible the importance of nonexecutive roles. Moreover, it overlooks millions of promising nonprofit professionals already in the field and committed to lifelong service. This flawed crisis mentality has led to ill-informed interventions, including efforts to recruit business students to manage the nonprofit sector (Buchanan, 2013).The true crisis is not a lack of bodies to fill nonprofit jobs; rather, it is the deficit of investment in current nonprofit people and the systems that support them (Kunreuther & Corvington, 2007). It is true that numerous foundations have proudly funded excellent fellowships and leadership-development initiatives over many years (McGonagill & Reinelt, 2011). I have personally benefitted from such generous support, both as a program participant and as staff at a leadership-development organization. In recent years, the support of executive coaching, sabbatical opportunities, and executive-transition management have grown popular among some foundations. Yet, it has been unclear how many foundations support this work and how much philanthropic capital is routed to nonprofit talent efforts.To investigate this question, I partnered with the experts at the Foundation Center's research department. We found that during 1992-2011, the annual average total support for nonprofit talent was 1.24 percent of grant dollars. In the last decade, the percentage of this type of funding fell by half, from 1.4 percent to 0.8 percent of total grants each year. (See Figure 1.) A similar study by McKinsey & Co. found that only 1 percent of funding went to leadership development (Callanan, 2013).While designing a proxy for talent grantmaking using the Foundation Center taxonomy, I discovered that the codes to describe support for grantee talent are nonexistent or, at the very least, challenging. For example, under the "type of support" category, the descriptive term that comes closest is "faculty/staff development." This blurry phrasing presents a clear bias toward higher education and a lack of general focus in grantmaking on staff development at any type of grantee organization. This is not the fault of Foundation Center; it is an inherited mental model amongst many funders that does not encourage them to conceptualize grantee talent as an important ingredient in the success of organizations and programs.With this data as context, the next sections examine the talent investment crisis by describing the current and chronic landscape.Urgent: The Current Talent EnvironmentSeveral trends in the nonprofit arena make it important to increase talent investment in this decade. These developments include generational and demographic change, a bottleneck in nonprofit careers, the war for talent, and the increasing rate at which talent moves in the nonprofit labor market. These issues have taken shape in the context of long-term divestment in nonprofit talent and chronically broken talent-support systems.Massive demographic and generational change in the American workforce has been widely documented and discussed (Halpern, 2006). The new majority will be people of color, not white people. The "greatest generation" is rapidly exiting the stage. Baby boomers are reaching the traditional retirement age. …

Talent Philanthropy: Investing in Nonprofit People to Advance Nonprofit Performance