Burnout as a Business Model

The nonprofit sector runs on passion, resilience, and the relentless drive to meet community needs with limited resources. But beneath the mission statements and impact reports, there’s a growing crisis we’re not talking about enough: the emotional cost of leadership. Behind every bold initiative is a leader carrying grief, pressure, and impossible expectations—often in silence.

Diana Stanley knows this terrain intimately. She led The Lord’s Place as CEO for over 17 years and has spent more than four decades working in the nonprofit sector—much of it in direct response to poverty, trauma, and homelessness. She is widely recognized for her leadership across South Florida, and for many of us in the nonprofit sector, she is more than a respected executive—she is a mentor, a model, and a quiet hero whose courage and compassion have shaped the field. When she speaks about the weight nonprofit leaders carry, she’s speaking from lived experience.

In a recent conversation, she put it this way:

“You need to be able to cry one minute and be tough as nails the next. How do you balance that?”

This is not burnout in the casual sense. It is chronic moral injury—a condition that arises when professionals are asked to sustain missions they deeply believe in while being deprived of the resources they need to do so responsibly (Dean & Talbot, 2018). It happens when nonprofit leaders are expected to deliver exceptional outcomes with inadequate resources, to serve more people every year while stretching already thin budgets, and to absorb systemic failures without adequate support. They must justify every dollar, report flawless data, grow impact year after year, and do it all while shielding their teams—and their funders—from the full weight of that pressure. The emotional and ethical dissonance created by this gap—between what is needed and what is possible is not just exhausting. It is damaging. That is moral injury. And it is quietly defining the leadership experience in far too many corners of the nonprofit sector.

We are watching some of our most effective leaders quietly make their exit, or stay on at great personal cost, because we have failed to fund the one thing nonprofits truly need to thrive: their people.

The data is concerning:

According to a 2023 survey by the Center for Effective Philanthropy, nearly half of nonprofit leaders identified staff-related challenges—including burnout, retention, and capacity—as their organization’s most pressing concern. These findings reflect a broader trend: nonprofits across the country continue to face workforce shortages, unmanageable workloads, and difficulty attracting and retaining staff—especially when salaries, support systems, and mental health resources lag behind the sector’s demands. Meanwhile, the Building Movement Project has found that up to 75% of nonprofit executives are planning to leave their roles within the next five to ten years. That number is even higher among leaders of color, who face additional stress from systemic inequities, tokenism, and exclusion.

This is not just a staffing challenge. It is a structural failure—one philanthropy must own and address.

At the root of this exodus is a fundamental misalignment between what nonprofits are asked to deliver and what they are resourced to sustain. Funders want bold outcomes but often hesitate to fund the people behind them. They applaud innovation but are not inclined to cover the cost of operational costs (which includes salaries and benefits), professional development or mentorship. They expect “resilience” while underfunding financial security and wellness.

We have built a nonprofit funding culture that celebrates sacrifice and equates “lean operations” with moral virtue. We romanticize doing more with less; while failing to acknowledge the toll this takes on human beings—particularly in health and human services, where the emotional intensity of the work is compounded by the constant instability of funding. The result is slow but steady personal erosion.

Stanley lays it out clearly:

“We will not survive as a sector unless we invest in developing our leaders. Especially in health and human services. The emotional toll is relentless. You’re holding grief and trauma every single day. And there’s no one teaching you how to hold that and still lead.”

So what can funders do?

They must begin by treating nonprofit wellness not as a soft issue, but as a strategic priority. That includes funding for mental health care, professional coaching, mentorship, and leadership development—not as extras, but as core infrastructure. Foundations must stop viewing operational and administrative investments as “overhead” and start recognizing them as the scaffolding that makes mission delivery possible.

Support for leadership transition is critical. While many nonprofit executives are stepping down due to burnout, low pay or exhaustion, too few organizations have structured succession plans or resources to develop the next generation. This creates a leadership vacuum with seasoned executives exiting the sector and emerging leaders left without mentorship, guidance, or a clear path to rise.

I don’t offer this as an outsider critiquing philanthropy, but as someone who has worked inside this ecosystem for over 20 years—grateful for the dollars that fuel good work, and also deeply troubled by how those dollars are allocated. At this point in the sector’s evolution, we need to ask harder questions: Are we investing in change, or just funding activity? Are we supporting people, or simply measuring output?

We shouldn’t be proud of a system that rewards exhaustion and underfunds leadership. And I don’t believe funders want it this way. But acknowledgement is not enough. The next step is rethinking priorities—and shifting resources in ways that truly sustain the people behind the work.

This moment requires a fundamental shift in philanthropic thinking. Funders must ask: What would it take for this leader—and their team—to be well, long term?

The nonprofit workforce is not immune to exhaustion simply because it is values-driven. In fact, it is more susceptible—because its work is rooted not only in empathy, but in justice, urgency, and a deep understanding of what happens when systems fail. And too often, its rewards rest on moral validation rather than financial stability.

For too long, philanthropy has operated on a flawed moral calculus: that passion justifies underpayment, that mission compensates for overwork, and that social good requires personal sacrifice. It doesn’t and shouldn’t.

This is not about wellness perks or symbolic gestures. It is about equity, sustainability, and mutual respect. It’s about changing how philanthropy engages with nonprofits—treating leaders as trusted partners, not passive recipients. Too often, nonprofit executives hide the emotional and organizational toll of their work from funders, fearing that honesty could be mistaken for weakness—or worse, risk their funding. This silence comes at a cost. Philanthropy must build relationships that make space for candor, not performance; relationships rooted in humility, shared purpose, and long-term commitment. That means funding organizations for their vision and expertise, not just their proximity to crisis. It means offering support that strengthens people, not just programs. And ultimately, it means building a future for the sector that doesn’t rely on burnout as a business model.

If we expect nonprofits to deliver lasting change, we must invest in the well-being of those doing the work—or risk losing the very people holding the sector together. We cannot ask leaders to build thriving communities while slowly breaking down themselves.

Note: The term “moral injury” was originally introduced in the healthcare field to describe the emotional toll on professionals working in under-resourced systems. For further reading, see Dr. Wendy Dean and Dr. Simon Talbot’s article, "Physicians aren’t ‘burning out.’ They’re suffering from moral injury." published in STAT in 2018.

This post is Part 1 of the blog series:
Reimagining Support for Nonprofit Leadership

Coming up next:
It Takes More Than a Peer — Why Mentorship Must Be a Philanthropic Priority