Leadership in Focus: Hilary Pearson
By Elisa Birnbaum
January 5, 2009
This month in our Leadership in Focus series we feature Hilary Pearson, president and CEO of Philanthropic Foundations Canada. Over the years, Hilary held titles that spanned the public, private and nonprofit sectors. From a policy analyst with the federal government to a VP at the Royal Bank, and from a management consultant to her current role as CEO, Hilary's 20-plus-year career continues to be as diverse as it is challenging and exciting.
CharityVillage: Keeping in mind your experience in all three sectors, what would you say are the specific challenges that leaders face in the nonprofit sector as compared to the others?
Hilary Pearson: My first thought on this is perhaps not the usual one. Usually what you would expect to hear is that leaders in the nonprofit sector have more trouble than others around funding issues. But what I actually found as a leader in the nonprofit sector is that I lack networks - infrastructure - in the sector itself that would allow me to connect easily to my peers. And when you don't have those kinds of networks, you're in the position of having to reinvent the wheel all the time. That is one of the most frustrating aspects of nonprofit leadership. It's a waste of human capital and productivity because you're constantly having to do it yourself, you don't know who to ask, who to call. There aren't the structures available like in other sectors. I'm thinking, in particular, of things like trade associations, professional associations, employer-employee conferences, and learning opportunities and seminars - various kinds of mechanisms that people use to connect with each other.
CV: What do you feel are the biggest challenges facing the nonprofit sector today?
HP: It comes back to the constant worry about how to get resources together to achieve your mission. And it's not always funding resources. It's also other kinds of capital - particularly, human capital, which is a challenge common to all sectors but even harder in the nonprofit sector. When you don't have tools and you don't have networks, it's harder to find and keep people and it's harder to make people feel they're developing in their job. They don't have access to the training, the learning, the connecting kinds of activities. And it's hard for an employer to offer those things.
And when you think about it, it's not just paid leaders who have trouble with this, it's the unpaid leaders too: the board. In the for-profit sector, board members are, by and large, paid and there's tons of training available for them. Companies pay fees, people have means to endow themselves with training, certificate courses. There's a lot available around corporate governance in the for-profit sector. For example, there's the Conference Board of Canada, but there's no equivalent in the nonprofit sector. We have to work on it; there are many good minds out there. But it is particularly surprising because Canada has such a large nonprofit sector.
“Leadership can't be just at the top of the organization; it has to be shared at various levels.” |
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CV: Having worked in the federal public sector for more than 12 years, what do you feel nonprofits could be doing to better communicate with the federal government?
HP: One of the jobs I had in government was to run the pre-budget consultations for the Ministry of Finance for five years. I spent most of my time thinking about communicating with the other two sectors because that's what it was all about - trying to figure out who to talk to, how to talk to them, and how to get them to bring forward their perspectives to the department of finance and the minister. We needed to make sure the budget and policy was well-informed and the minister had a real sense of the priorities of people in all different sectors.
In the nonprofit sector, the essential problem has been the fragmentation and lack of infrastructure. The trade associations in the for-profit sector are extraordinarily good at serving members. They put together briefs, get to the right people at the right time, and they often hire government relations people to help them. In our sector, it's improved a lot from the days I was there in the late 80s. It's still coming along. But it depends if an organization wants to be involved in policy development or not. Most don't; they're too busy with services.
So it falls to the umbrella organizations. And you do see much more systematic organization by sub-sector now than you did 10 years ago. They act as the collection points, coordinators, informers, two-way channels between sector and government. And there are successful organizations like the Canadian Conference of the Arts - they have a broad membership and a good handle on common issues. The federal government helped the process by agreeing to do the Voluntary Sector Initiative. While no longer in existence, the impact it had over five years was to really force the sector to organize itself better in order to participate in that initiative. And it made a difference. It led to other changes that have supported the sector longer term. For example, HR Council for the Voluntary and Nonprofit Sector was set up through the Initiative.
CV: Given the current economic situation, how do you foresee the instability impacting foundations in Canada? What does the potential impact mean for the sector as a whole? And what do you feel nonprofit leaders can/should be doing during this turbulent time to meet those challenges?
HP: I'll speak for my membership, which is most of the larger private foundations in the country, but by no means all. There's 96 members in all. The gist of what I'm hearing is: “We're holding the course in 2009. We've seen this before; cycles come and go and we're not going to panic.” Most of them are not under the same restrictions as community or public foundations that have donor provisions such as having to preserve capital, not encroach upon it, and hold onto it for perpetuity. Also with community foundations, they have a commitment that if market value goes below the book value of a gift, they can't make any disbursements. This is why many community foundations have had to stop dead. They may still have the capacity to give but donor agreements have limited them. Private foundations, especially ones that have been around for a while, can encroach on capital, don't have donor restrictions, and actually have more tools at their disposal. They all suffer the same dismal returns on investments but they can say, at least for now, that it doesn't mean they need to cut back. We have the money and can encroach on capital or can find other ways of using assets to support grantees and communities.
The situation can get really horrible in 2009 because a lot of charities will not only be losing foundation money but will also be losing government money and individual donations. But if you have a good business plan and a contingency reserve, can grit your teeth through it, you can probably make it. I think the foundations themselves will have to assess whether they need to do a triage and support the organizations that they think are critical that they've invested in. It's important to be as creative as possible and it's not just about money. As a foundation, you can also make space available, you can convene people, you can share some back office structure with charities. It's an investment in social capital, not just about the grants.
This situation is going to really test leaders, no doubt about it. One thing I have to say in favour of nonprofits is that, on the whole, our demographic in terms of leadership is a senior one. And you want an older leader who's seen some of this before, who can stay calm and reach out and find resources in other ways. I think the nonprofit sector has a lot going for it in a crisis. It's used to doing a lot with a little. There's going to be quite a lot of flexibility and imagination and the ability to tap into all possible resources that one may not see as much of in the private sector. So I think, in this circumstance, while it's a bad story for everyone, it may be a better story for the nonprofit sector in terms of quality of leadership.
This is where networking and the Internet and the ability to go through umbrella or infrastructure organizations is really important. I've already participated in a number of conference calls with leaders in a number of organizations. We can look to each other and learn from each other and we can share that information with our members. Again, the fact that infrastructure was created through the early years of this decade is going to be helpful. This is when those organizations and networks will have to come into their own.
CV: What is the biggest public policy issue affecting the effective fostering of philanthropy in our country?
HP: It's been hard for a number of years to try and get government funders to be less demanding in their accountability requirements. As the pendulum swings to accountability and the need to report and account for and provide value for money, the whole process has been overweighed. So it's very difficult to apply for a grant, its difficult to report as you disburse the grant, and very difficult to report at the end of grant and go through the auditing process. Auditing has gone way overboard, particularly at the federal level. Organizations with relatively small grants have had relatively costly audits done on them for no results, just to show everything is fine. The federal government did set up a blue ribbon panel that made many good recommendations but that job isn't finished. If those could be implemented, it would go a long way.
CV: Are there specific traits that make great leaders?
HP: If there's one that to me is really important it's the ability to connect with people on a very human level and to inspire them. You've got to have energy, vision and the ability to network. But it's really the human factor, the ability, without a huge amount of ego, to bring people around to a common point of view and get them to act on it. I really do think a lot of nonprofit leaders have that in spades.
CV: Are organizations doing enough to foster future/young leaders? If not, what can they do better?
HP: No, I don't think they're doing enough. It's a real gap in our sector and it's a worry. We do have this older profile - there are all these people in their 50s - but where are the younger people? Our problem is one of depth. The gap between the leader in her 50s and the younger person is fairly wide because there aren't that many levels. For young people that means no obvious career path. "What's the next step?" they ask. "How do I get from here to there?"
I came into the sector sideways. I climbed into the government sector and when I jumped from there, I had already made it into the executive ranks and then worked as a senior consultant. So I was already at a leader level when I came to the sector. If I had come in at the beginning, those steps wouldn't have been as obvious. It's a structural problem and I'm not sure how one overcomes that other than through building on an asset of the sector. A lot of organizations can work horizontally because they're not too stratified and don't have all these bureaucratic layers. In fact, as small and nimble organizations, we should be able to network with each other. So if you start a job in one organization, you should be able to move sideways. You should be able to move from cell to cell. That's the way youth think now – they tend to think in links. But for older generations, that may not have been a normal path.
I think it's necessary for us to be willing to let go, to say, "I know about an opportunity through my network that may interest you." But, in return, you want to be able to acquire. If you send someone out you want to be able to recruit someone in. And I don't think we do that very well and that's frustrating. Leaders hold on too long to their resources and young people without offering them a comparable step up because they don't know where else to go to find their young replacement. It's a real problem. But it doesn't mean we shouldn't try and tackle it.
CV: What practical advice on leadership would you offer others?
HP: From the practical point of view, I think it's important to be realistic. If you want to be a leader, you have to be thinking about things 24/7. Perhaps a cliché, but it's really important. If you're really leading something, you have to be doing it 100%. It means thinking about it on weekends, putting in long hours, making the extra effort, it's all-consuming. You have to be prepared to put in the time. There are no part-time leaders. It's involving and engaging, one of the reasons not everyone wants to be a leader.
I can still remember when I was in the federal government, Georgina Steinsky-Schwartz - a deputy ministry at the time - came to talk to the young women at the Department of Finance and the Treasury Board. We were all working in the type A, workaholic-type of environment. And she said to us, "I'm here to tell you that you can't have it all. If you want to continue up the ladder and have the leadership position and all the great and satisfying things that come with that, you will have to give up something. And you'll have to decide what your trade-off is. I'm here to tell you as deputy minister that I have a great job. I find it fascinating, I find it intellectually challenging, but I have another woman take care of my kids."
She was very blunt about it. I think it was a really good corrective that she was administering because there's always a cost and it's better to know sooner rather than later and make the choices realistically. There's a tremendous amount of satisfaction to leadership. I also think there's an illusion that, "anyone can be a leader at any time - just shift leadership around and hand it over and you can be the leader in a cell and them move to the next and not be the leader." But that's too unrealistic. Once you become a leader, you have to take it on and see it through.
CV: Do you have any mentors who've inspired you over the years?
HP: I have two answers. I have mentors who've mostly been men who've taken a chance on me at various points in my life, who have really challenged me, who have said to me, "Why do you say that? Why do you think that? You can do better than that. Why didn't you come up with something better." For example, the senior VP who hired me at RBC, Don Wells. He took a huge chance on me. I was working in the federal government, I had never worked in the bank and he decided to hire me. I learned a tremendous amount and he really challenged me as well.
When I think about mentors, I also think of my mother, Landon Pearson. My mother is an extraordinary sector leader; she has been in the voluntary sector as a volunteer all her life. She was also a senator and has been dedicated to the cause of children's rights in Canada for her whole career. She's 78 years old and she's still going strong. She retired from the Senate at 75 and she's now running a centre for the study of children's rights at Carleton University. She speaks, she writes, she agitates, and she's now taken up the cause of rights to education for aboriginal children on reserves, flying up to northern Ontario to remote reserves. How can you not be inspired by that role? Until she became a senator she never had a paid job. She was also a leader in getting Canada to sign the UN Convention on the Rights of the Child.
More about Hilary... |
First nonprofit job: Consultant to nonprofits starting in 2000 (joined PFC as CEO in November 2001)
Education: BA and MA, Political Economy, University of Toronto
Annual budget of the organization she oversees: $500,000
Number of employees: 4
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CV: What books or resources about leadership would you recommend?
HP: There are tons and tons of books on leadership out there but one that has struck me is by a man who has thought a lot about leadership - and he's now thinking about it in the social sector: Jim Collins. Good to Great, his book in the private sector was great, and then he came out with Good to Great and the Social Sector which is very powerful, with lots of good lessons. The way he thinks about it and presents it is very motivating. And he gives you things you can apply in your own context.
Elisa Birnbaum is a freelance journalist, producer and communications consultant living in Toronto. She is also president of Elle Communications and can be reached at: info@ellecommunications.ca.
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