First, the good news. There are plenty of young, ambitious and talented people eager and ready, or almost ready, to take leadership roles in the nonprofit sector.

The large pipeline of younger leaders should help mitigate fears that organizations that provide crucial services and social support could be crippled by a “leadership deficit” in the next decade as members of the baby boom generation change gears, according to a new report conducted by CompassPoint Nonprofit Services, Idealist.org, the Annie E. Casey Foundation and the Eugene and Agnes E. Meyer Foundation.

Now, the bad news. Many of those potential leaders are leaving the nonprofit sector because of pay, long hours and what they perceive as limited chances for training and promotion, according to the report, “Ready to Lead? Next Generation Leaders Speak Out.”

Thus, the inter-generational opportunity: mentorship.

Among the survey’s respondents, only 4 percent reported that they are explicitly being developed to be their organization’s next executive director.

“Considering the sector’s increased focus on developing new leaders to fill the leadership pipeline, we hoped to find more evidence that executives are actively developing successors from within their staffs,” the report’s authors wrote. “Particularly disheartening was that executives appear to be undervaluing the experience and leadership potential among their most experienced staff. The value of building “bench strength” goes beyond succession planning. Investing in staff development is also an effective retention strategy. Acknowledging people’s leadership potential helps build their confidence and interest in advancement. It is also an effective way for executives to share large workloads, reducing the risk of burnout.”

The findings suggest a strong role for people in their “encore careers” to mentor younger leaders in the nonprofit sector.

The report predicts serious trouble for nonprofit organizations that are not doing enough to retain younger workers. It is based on a survey taken last fall of 6,000 nonprofit employees.

About two-thirds of the nonprofit workers surveyed said they had financial concerns about working in nonprofit jobs, and almost half expressed fears about not earning enough money to ever be able to retire.

Interestingly, 18 percent of the “next generation” leaders surveyed were more than 50 years old. Of this group, one in five was favorable to the idea of becoming an executive director, and one in four said they were ready right now. “This hints at a sizable and experienced population that is both ready and willing to take the helm,” the report noted.