Nonprofits, many of which felt the brunt of the recession, are finally beginning to bounce back. In fact, almost half of the organizations surveyed by the consulting group Nonprofit HR plan to hire staff this year — and of those looking to hire senior leaders, 40 percent said they are looking for people with significant for-profit business experience.
The shift from hiring leaders with subject matter expertise (i.e., children’s advocacy organization leaders would have experience in education, psychology or child development) is in large part a response to post-recession changes in the world of fundraising. While individual charitable contributions are on the rise, they have not yet reached pre-2008 levels. Competition for donations is fierce, and foundational grants and government support are still hard to come by. For that reason, nonprofits are looking for leaders who can bring the business skills that allow them to maximize resources; nonprofits, no matter how noble their cause, must operate like businesses if they are going to survive in today’s competitive marketplace.
Financial management skills are not the only reason that nonprofits and public sector organizations are seeking leaders with a business background, though. Professionals with business education and experience bring even more to the nonprofit table. First, it’s important to understand some of the challenges that for-profit leaders face when shifting to an entirely new sector.
Expectations vs. Reality
Many corporate leaders shift to the nonprofit sector out of a desire to make a difference in the world. Instead of toiling away for profits and growing the bottom line, they see nonprofit and public sector work as a chance to make a measurable difference in the lives of others. They see the work as more personally fulfilling, in that it meets their emotional as well as their intellectual and financial needs.
Nonprofit work generally does provide that sense of fulfillment, but it’s important to note that it doesn’t always come with the “warm fuzzies” that one might expect. Many leaders who change sectors find that they face significant challenges, including:
- A culture that may not be welcoming of a for-profit leader; some nonprofit workers fear that a leader coming from the business world will be more focused on the bottom line than on the mission.
- A disconnect between what they expected to be doing and what they actually do. For example, some leaders are surprised at the amount of fundraising they are called upon to manage.
- A board of activists who expect to be involved in every decision and question the leader’s decisions.
- A wider array of stakeholders, which may include government agencies, clients, foundations, donors, board members and volunteers, who expect to be heard and have their needs met.
Meeting the Challenges
While professionals making the shift from for-profit to nonprofit work will find some challenges, for many, the skills they learned in business school and developed in the executive suite will come in handy as they work to change the world. More specifically, some of the skills that are most useful include:
Change doesn’t happen overnight, and many organizations resist change. However, as nonprofits find their footing in the new economy, many need to make changes to how they operate if they are going to survive, let alone thrive. Business professionals have skills in planning, communicating and implementing change, and leading through the change process. This increases not only the likelihood of success, but also creates a stronger overall organization.
Human Resources Management
For-profit executives often bring with them experience in managing human capital and know how to put the right people in the right jobs and encourage high performers. Because many nonprofits lack the type of processes, practices and culture that demands — and rewards — high performance, many new leaders spend a great deal of time handling people-related issues in their early days on the job. However, their experience from the corporate sector helps them instate the right policies and procedures, as well as manage people to their highest levels of performance.
Many for-profit leaders come with skills in financial management, accounting and budgeting. However, they may need some additional training in the world of nonprofit finance, as there are some differences, especially when budgeting and planning in the public sector. However, bringing a business mindset to the nonprofit world can make a positive difference and allow the organization to identify new opportunities and increase efficiencies.
Even if you’ve spent decades working in a for-profit environment, you can successfully transition to a mission-driven nonprofit and make a measurable difference. It may take some time, and a few adjustments to your expectations, but in time, you’ll see results.
Image credit: CC by Steve Jurvetson