Nonprofits face an unprecedented leadership deficit, as a wave of retirements hits just as social needs are exploding. The Silicon Valley Encore Initiative is an effort to fill the gap by helping recently retired or soon-to-be-retired corporate employees transition to encore careers in the social sector.

“We thought it was a terrific idea – one worth writing about and one worth emulating,” said Jeff Chu, senior editor at Fast Company, which named the initiative one of the magazine’s Social Enterprises of the Year. “It’s a clever solution to a nagging, ongoing problem.”

Civic Ventures, publisher of Encore.org, has made Fast Company’s list of “Social Capitalists” for the last two years. The magazine changed its format this year to highlight specitic ideas rather than entire organizations. The December 2008/January 2009 issue heralds nine “bold and timely ideas that wow us” with “the kind of innovative thinking that can transform lives and change the world.”

The initiative is one of several pilots testing paid encore fellowships as a way to facilitate the transition of corporate professionals to not-for-profits or public agencies seeking managerial expertise. Encore Fellowships also are a central feature of both the Serve America Act of 2008, introduced by Senators Ted Kennedy and Orrin Hatch, and the Encore Service Act of 2008, proposed by Senators Chris Dodd and Thad Cochran, along with Kennedy.

President-elect Barack Obama has pledged to sign the Serve America Act, which calls for Encore Fellowships “to enable individuals age 50 or older to carry out 1-year service projects in areas of national need (education, health care access, clean energy, economic opportunities for the poor, or disaster response/preparedness) at eligible organizations and to receive training for full-or part-time public service in the nonprofit sector or government (provided by the eligible organization).”

“Among baby boomers, there’s increasing interest in ‘encore careers,’ especially in not-for-profits,” Fast Company noted in its report. The challenge, according to Marc Freedman, CEO of Civic Ventures is to “help supply and demand find each other.”

The first Encore Fellows to be supported by Civic Ventures’ Silicon Valley Encore Initiative are expected to be placed with educational and environmental nonprofits early next year. The fellows will receive $25,000 for the equivalent of six months of full-time work. Each nonprofit will receive a small “innovation grant” of $5,000 to help support training and other program expenses.

The first Encore Fellows are employees, or former employees of Hewlett-Packard Co. and Agilent, the program’s initial corporate sponsors. The initiative is supported by the David & Lucile Packard Foundation.