One employer-based talent incentive strategy that has gained momentum since the pandemic is providing extended leave benefits to employees. Funders are uniquely positioned to intentionally address shifts in the labor market by leading initiatives to expand access to and utilization of paid time off (PTO) and extended leave benefits provided by nonprofit organizations.

Funders should consider increasing philanthropic support to nonprofit organizations for extended leave, professional renewal, and/or sabbatical programs. Combined with leading sector-wide efforts to develop effective responses to burnout, enhance employee wellbeing, reduce voluntary turnover, and improve talent retention efforts by nonprofit organizations, funders have the unique opportunity to transform talent strategies, improve service delivery, and achieve higher levels of social impact.

The Impact of Extended-leave Benefits

According to The Sabbatical Project, an initiative led by Harvard Business School faculty, the number of employers offering sabbaticals to motivate and retain employees has grown exponentially since the pandemic (Source). For this article, a sabbatical or professional renewal is defined as an extended break from a job lasting long enough to distance oneself from everyday work life. The Sabbatical Project has collected preliminary data on company-sponsored sabbatical policies. Data from 56 companies and organizations across the U.S. suggests that, on average, sabbatical policies provide employees 24 days, or nearly 5 weeks, of extended paid leave.

Definition: A sabbatical is an agreed-upon extended period when an employer allows employees to take time away from their work responsibilities. Sabbaticals vary in time but are always longer than a standard employee vacation time.

Studies have found that extended leave with meaning (purposeful activities) and affiliation (activities that foster a sense of relatedness with others) is positively related to improved personal wellbeing (Sonnentag et al., 2017; Kujanpaa et al., 2020; Virtanen et al., 2020). Those who took sabbaticals or extended leave reported greater self-clarity and confidence in their managerial skills and were eager to step up.

Further, those who filled in during the sabbatical-taker's absence had their own experiences of self-discovery and could showcase hidden talents while serving in different roles. Most sabbatical-takers returned to their pre-sabbatical profession but not their pre-sabbatical work itself. After taking extended leave, some employees pursued new projects, arrangements, positions, or employers that fit their talents and values.

Studies have also found that the positive impact associated with extended-leave programs is particularly tied to how the program is administered and the support provided by the employer. Research suggests that there are two major components critical to maximizing the benefits of extended-leave programs, including the (1.) autonomy to choose desired activities and supportive culture and (2.) processes that reduce guilt or social pressures for being away from work for an extended period (Newman et al., 2014). You must feel comfortable taking time away from your routine work to experience extended leave benefits. Nonprofit organizations can use extended leave policies to allow employees to pursue their passions and reenergize themselves away from the workplace while minimizing confusion about the preferred procedures for organizing time off. However, the three most common barriers to sabbaticals are (1) cost, (2) pressures from work, and (3) family responsibilities. (Source).

By expanding extended-leave programs to more nonprofit professionals, removing the cost barrier and assisting with implementing supportive workplace practices related to extended-leave, funders can improve key labor market indicators of wellbeing while sustaining critical services that improve quality of life of local residents.

Barriers to Accessing Extended-leave Programs

Boundaries between work and leisure have again blurred, and private and public life domains seem to have merged in the post-pandemic labor market. A new poll from Fishbowl by Glassdoor found that most professionals have difficulties unplugging from work while taking time off, with 54 percent of professionals reporting that they are unable or do not believe they can fully unplug while on paid time off (Source).

There are two primary drivers that can enhance extended-leave strategies, increasing both (1.) access to and (2.) utilization of paid time off benefits. Paid time off (PTO) is often based on the number of years an individual has been employed with the organization, with employees earning more PTO the longer they have been employed with the company or organization. In the U.S., the average paid vacation time after one year of tenure is 10 days, 15 days after five years, and 20 days after 20 years.

However, having access to PTO and utilizing this employer-based benefit are two different issues. According to a 2023 Pew Research Center report on American views on jobs, nearly half (46%) of workers who have paid time off take less time off than offered (Source). Reasons for not utilizing paid time off benefits vary, including not feeling the need to take more time off, worrying about feeling behind at work if they took more time off or feeling bad about their co-workers taking on additional work and responsibilities when they are not at work (Source).

Funder-Sponsored Extended-leave Programs

Executive-level extended-leave programs for nonprofit leaders, usually referred to as sabbatical programs, can be a relatively inexpensive but highly productive capacity-building tool that yields measurable results. Creative Disruption: Sabbaticals for Capacity Building and Leadership Development in the Nonprofit Sector provides emerging evidence of the benefits to nonprofit organizations, leaders, funders, and the sector.

One study written by TSNE’s Deborah Linnell and CompassPoint’s Tim Wolfred exposes the myth that an executive sabbatical will be a chaotic disruption, finding instead that the creative disruption of a well-planned sabbatical can be productive for the entire leadership of an organization. One unintentional consequence of an executive-level extended-leave program is that organizational capacity is increased as the second tier of leadership takes on new responsibilities. Governance is also strengthened due to the planning and learning that goes with a sabbatical process.

Research shows that executive directors come back rejuvenated, with a fresh vision and innovative ideas, and tend to extend their tenure with the organization. By providing multiple awards and their community leadership efforts, funders gain a deeper perspective on community needs from participant feedback, networking, and innovative ideas that sabbatical alumni bring.

The Creative Disruption Report recommends funding sabbaticals as a best practice in philanthropy for leadership development, succession planning, and organizational capacity building.

Sabbaticals can be an investment in the long-term health of nonprofit organizations - and the sector; however, more must be done within the sector than provide philanthropic investments to nonprofit organizations to reward their respective executive leaders and staff with extended-leave opportunities to effectively combat impending labor shortages and current voluntary turnover resulting from burnout.

Funder-Supported Extended Leave Programs Can Be More Intentional to Address Labor Market Challenges

The administration of and process improvement strategies for extended-leave programs are well documented, led by the Durfee Foundation and others that follow this model. However, the administration of a sabbatical program alone will not drive equitable outcomes nor bring about transformational change within the nonprofit sector. Most, if not all, of the documented extended-leave program impacts are byproducts of the program itself, do not intentionally address root causes, and are not sustainable post-award.

Extended-leave programs unintentionally address burnout, organizational capacity building, and social capital development by the very nature of the administration of the opportunity, not necessarily by design, and most certainly do not take into consideration addressing more systemic issues, for example, nonprofit workplace practices, compensation and professional development opportunities, distributive leadership, paid time off policies, or building social networks.

A byproduct of sabbatical programs is that shared leadership occurs when leaders are away from the organization; however, the fact that shared leadership does not occur may also be a root cause of stress and the inability to utilize paid leave or achieve work/life balance. Additionally, many extended-leave programs are not diverse in acknowledging and recognizing multi-generational talent. Most extended-leave programs, particularly sabbaticals, would disproportionately benefit one generation and possibly unintentionally exclude sub-groups if they have not had the opportunity to assume executive-level leadership as required by extended-leave programs.

Developing a Transformative Sabbatical Program

To truly use extended-leave programs as an instrument for change and to drive equity, funders must examine the systemic challenges of the nonprofit sector that would necessitate a sabbatical in the first place. For example, does the nonprofit sector adequately utilize and promote paid time off policies and practices? Are there enough people cross-trained within nonprofit organizations to allow a team member to take advantage of an extended leave policy, bereavement, or wellness time without feeling the pressure of job insecurity? Funders must also be concerned with talent development practices within the nonprofit sector workplace and the availability of training resources to encourage continuous skill development throughout the organization.

To achieve intentional impact beyond the effective administration of sabbatical programs, Wheeler Social Impact provides the following recommendations:

• Expand Eligibility to Be More Inclusive: Expand criteria for extended-leave participation to anyone who has served in the nonprofit sector for 5+ years since the average tenure with an organization is dramatically decreasing.

• Convene Organizations to Discuss Effective Talent Investment Strategies at the Organizational Level: Funders are uniquely positioned to convene nonprofit organizations to discuss practical strategies for addressing social challenges and should intentionally develop programs that build social capital and networks across sub-sectors to understand organizational challenges and labor market shifts impacting grantee organizations.

• Fund Professional/Personal Development Opportunities In Collaboration with Extended-Leave Programs:  Integrate personal and professional goal-setting and personal coaching with extended-leave strategies to increase wellbeing and productivity within the sector.

• Incentivize Talent Innovation to Respond to Labor Market Shifts: Intentionally connect executive-level extended-leave awards from funders to develop new workplace models that allow all nonprofit employees to achieve work-life balance.

• Build Board-Level Capacity to Lead Talent Innovation Initiatives:  Make a concerted effort to support board directors in developing and sustaining extended-leave policies and programs at all levels to achieve long-term organizational talent recruitment, development, and retention goals.

As a part of this three-part series, Wheeler Social Impact will soon release results from its research that will provide insights on what indicators are most associated with voluntary turnover.