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Crunch Predicted in Nonprofit Sector

After graduating from Wellesley College, Heather Peeler took a job at the National Gallery of Art. Several stints at arts nonprofit groups later, and after getting a master's degree, she felt squeezed financially.

Peeler became a mid-level executive at an online textbook company, a job which paid her more. But her heart was in nonprofit organizations. "People want to have a more tangible societal impact," she said.

So Peeler hunted for a new job in the nonprofit sector. But she ended up taking an offer from the Advisory Board Co., a private health-care consulting firm.

"The salary that they offered me there was more than double the two offers I received from the well-known nonprofits," said Peeler, who lives in the District. "That enabled me and my husband to buy a house. It paid for our wedding. It would not have been possible if I had continued to work in the nonprofit sector."

Peeler, 38, is now back in the nonprofit sector, working as managing director for Community Wealth Ventures, which advises nonprofit groups on business models.

But many like her do not return, said Rick Moyers, a director at the Washington-based Meyer Foundation. The foundation was founded by a former publisher of The Washington Post but is not affiliated with the newspaper.

"They come in, they work really hard, they have a lot of responsibility, they learn a lot and are not paid very well, and in a few years they move on," Moyers said.

Chuck Bean, executive director of the Nonprofit Roundtable of Greater Washington, a consortium of nonprofit groups, said the report is "a call to action for all nonprofits in our region."

"I think the report validates a lot of what we've seen anecdotally amongst our members and nonprofit organizations in the region," he said.

Nonprofit organizations are a vibrant force in the Washington region's economy, contributing at least $9.6 billion to the regional economy, according to a study released last year by the Nonprofit Roundtable.

The study, conducted with the World Bank, found that many of the area's 7,614 nonprofit organizations help address key social problems, including homelessness, hunger, violence and illiteracy, in the early stages. Their work saves the government money down the road, the study said.

Rosetta Thurman works for the Nonprofit Roundtable, where she sets up mentorship programs for next-generation leaders.

"We've been chugging along thinking that we'll just keep attracting these young people out of college, but I don't think nonprofits realize how important it is to keep these young people once they get here," said Thurman, who writes a blog about working in the nonprofit sector.

If the sector continues struggling to retain talent, it could have a dramatic effect on social services in Washington and around the country, said Paul C. Light, an expert on nonprofit groups and a professor at New York University's Wagner School of Public Service.

"It's really a significant problem and one that is just so important to the future of the sector," he said. "Nonprofits are so focused on meeting their mission in the present tense that they don't think of succession planning for executive directors, they don't think of recruitment for future employees. It's just not on the agenda because they're under such pressure to deliver, especially during economic downturns like this."

Now, Light said, "they're waking up to say, 'Where's the next generation of workers?' And they're saying, 'We just don't know.' "

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