Many senior professionals come to a point in their profession when they no longer feel challenged or they feel their daily actions have lost their importance. They want to take their skills that they have built over their career and put them to “better use;” where they can make a difference in people’s lives, and also where they feel needed and necessary. They’ve supported a number of good causes; they might have even been a board member to a nonprofit. Doing these things has made them feel good and now they want to experience more of that sensation. Surely, an organization can benefit from their honed organizational abilities, communication skills, management experience.
Can you relate? Do you want to combine your heart and mind in one purpose every day? You say you are willing to sacrifice a high salary, profit-sharing, equity, options, incentive bonus for peace of mind? You are not alone. Many senior executives have spoken with me about changing fields and they want nonprofit to be a great fit for them. However, my advice is before you commit to that dream and leave your current life behind, consider whether that kind of life is actually right for you. Making the transition from for-profit to nonprofit as an employee takes a special, resilient individual who would be described as flexible and easily adaptable, regardless of the length of career experience you have on your LinkedIn profile.
This is the first part of a two-part discussion. In this article, we’ll examine the major differences between for-profit and nonprofit, along with its assumptions. Keep posted for part two of the series, where we’ll discuss the difference in the environment and people between for-profit and nonprofit. The second part will also address the situation for a recent graduate looking to work for a nonprofit and deciding whether or not it is the right move for them.
Changing your thought patterns and assumptions: Business versus Cause
The first thing to consider is the length of your career to this point. As you know, the longer you’ve been doing something one way, the harder it is to change those patterns and mindset – it’s ingrained.
You are accustomed to working for a business. That business’ purpose is to make as much profit as is possible (legally). It is understood — a given — that everyone who works for that business is dedicated to that purpose because it benefits them as individuals as well as the entire organization. If the company is doing well and is highly profitable, then you as an individual contributor would also expect to be rewarded financially; it goes hand in hand. So, in effect, everybody has the same goal or works toward that same goal.
A nonprofit “doesn’t make a profit.” Its purpose or reason for being is to make as much money as possible for its cause, not for the organization itself, nor its employees. At the end of the fiscal year, there should be no money left over, hence nonprofit (or it goes back into the running of the organization). Even though you may still feel this organization is a business, particularly given your background; however, there are those who work within a nonprofit who feel there is a conflict of interest between “business” and “mission” or “cause,” and they may not be drawn towards making the most money possible for the organization — instead they prefer to concentrate on its services.
Who’s at the helm of a nonprofit and why can’t they lead everyone to a mindset of maximizing money-making for the cause and strategically spending money? There is no owner of the organization, no supreme decision maker who can lead the entity; instead, there is an overall mission, board of directors and leadership teams. Furthermore, that organization is accountable to many: the general public, state agencies, the IRS (as compared to shareholders and employees). The board which governs and staffs the organization’s most senior positions does not have ownership rights but it does have legal and ethical duties. The Executive Director manages and mediates between the board and staff. Despite this, sometimes there is confusion over governing and managing and issues arise when that distinction and those roles are not clear from the beginning. The clarity that is assumed in a for-profit business is typically not so black and white.
Then, there is the financial reporting. There is a more complex economic model at a nonprofit, as there is earned revenue and contributed income and potentially more sources of income such as real estate holdings, intellectual property, etc. Members of the board may have different ideas of how money should be spent and may argue with the Managing Director’s intended necessary expenses and costs. Depending on the board’s composition and strength, it can be challenging to reach consensus.
You are starting to see how that potential career transition you thought would be easy, is not so. Perhaps there were facts you had neglected to think about, that you may have swept from your decision-making process. You are now armed with additional information. To get past the bigger picture and into the environment and the people who work at nonprofit organizations, I invite you to read the second part of this article.
Susan Goldberg is a leading specialist in finding and keeping the perfect talent. She is the Founder and Principal of SGES/Susan Goldberg Executive Search Consulting, a consulting firm. She has been conducting executive searches and coaching executives and companies around hiring and retaining their talent for 20+ years. Susan’s marketing background, people network, and boutique practice allows her to navigate across industries, gather insights and pay attention to details. She works with employers to navigate through the current tides of changing workstyles, diverse priorities, and high turnover.
She is also the co-author of “Leadership in Wonderland”, a combination book and workbook which takes you on a journey to discover your own leadership skills and fine-tune them. The book is particularly relevant for the nonprofit environment and for young leaders