Making the Leap from For-Profit to Not-for-Profit

11/17/2011 09:02 am ET

An executive leaves a financial services giant and announces plans to spend time in academe or the philanthropic world. But does it always make sense for a not-for-profit (nfp) to hire this star?

In the course of our work with board search committees, we have interviewed a range of potential candidates for nfp jobs who have encountered relatively young mandatory retirement ages from positions of great responsibility, such as running global law or accounting firms. We also have talked with government officials and university presidents who have announced plans to step down and who contemplate "what's next." We have interviewed career changers whose private sector earnings (or whose share of the sale of a major business) so far surpassed any expectations that they are now free to work for a fraction of their former salaries.

It is our conviction that each of these pools presents talents and skills nfps cannot afford to overlook. As always, it is important to consider carefully their fit with the organization and the opportunity. Boards must manage potential discomfort or mistrust on the part of career nfp staff to a potential hire of great wealth. Boards must also closely assess potential misperceptions on the part of career changers and retirees as to whether they regard nfp life as a chance to "slow down" one's pace, (or, conversely whether they plan to introduce changes to the nfp that are too radical or too rapid.) While in some cases, the nfp pace is different, it is hardly the leisurely life some envision. Boards will also need to be clear and forthcoming about the change in scale, resources, complexity and budget a move to their organizations entails.

Assess the sincerity of the executive's intent to change sectors. If the executive seeks to enter the nfp sector as a "back-up" plan, because his or her desire to re-enter or to remain in the for-profit sector is thwarted, there might be a high-likelihood of returning to that sector, should such an opportunity occur. (This, of course, may be of concern when a candidate leaves one part of the sector - for instance, politics - for another.)

Our preference, as search professionals, is to find such a person on the "second bounce" - that is, once he or she already has ventured into the nfp sector. Such a trajectory instills confidence in a search committee (and the search consultant) that the candidate can shift cultures.

If that has not yet occurred, we look for other examples of knowledge of and commitment to the nfp sector, such as significant volunteer work, fundraising, or board service. Another good indicator is the executive who has gone back to school - whether for a degree in a new field or a certificate program in fundraising or some other aspect of nonprofit management. Search committees derive comfort from even early career experiences in a similar nfp (or even if the candidate's spouse works in one). Each provides a degree of familiarity with and realistic expectations for life in the new organization and sector.

While the desire to "give something back," may be part of what prepares and propels an executive to change sectors, if it is a "stand-alone" phrase that is unsubstantiated by a track record of service, it is not persuasive to us.

Pay close attention to tranferrable skills. Has the person been in occupations that require him/her to be a quick study - for instance, management consulting or journalism? We do look for other examples of an executive's ability to navigate a culture shift, such as an expatriate assignment. While selling in the for-profit world may translate well to fundraising in the nfp world, there can be a difference in the patience needed to engage and nurture prospective funders.

Know the skills you need. While specific business skills may be sought by the search committee, a candidate needs to take a lead from them. Any candidate who presumes that nfps are poorly managed and speaks of the advantages of his or her business background may offend the hiring organization - not to mention, the staff he or she would manage in the nfp. In fact, Peter Drucker and Frances Hesselbein have written about the superiority of some nfp management.

Listen, too, to the candidates' language. Do they convey passion for the organization's mission? Can they do so in a compelling way? Can they present without PowerPoint and, in fact, "paint a picture" with words? Moreover, for an nfp that provides direct service, do they possess and present compassion?

Many times a search committee finds itself interviewing leaders from the nfp world alongside other candidates from the for-profit world. Board members, many of whom may have worked only in the for-profit sector themselves, may find and must be aware of a far greater sense of familiarity and personal comfort when interviewing an ED from their own world.

Do discuss salary, benefits and "perks" early in the process. We have encountered candidates who are open to pay cuts, but unrealistic about the extent of such cuts. Since this can be a "dealbreaker," get it on the table earlier rather than later. Have candidates see the work environment and visit facilities sooner to avoid surprises later. Shifting settings may mean exchanging palatial surroundings for decidedly less posh environments.