Corporate CEOs Becoming Nonprofit CEOs and the Challenges They Face

There are truths in leadership that transcend across any sector you work in — for-profit, nonprofit, or public — but there are stark differences, too. This week, we break down some of the challenges that we see corporate leaders face when they move into a nonprofit role.

The nonprofit sector is vast. It ranges from multi-billion-dollar universities, hospitals, and health systems to small start-ups and community-based entities, so we must be careful to not overly simplify the complexity of the sector. We must also be wary of portraying all chief executive roles the same as they vary greatly within the sector and between organizations.

With those caveats stated, we offer the following insights based on our experiences with leaders over the last 20+ years.

  1. Don’t assume it will be easy.

On more than one occasion, I’ve heard for-profit candidates talk about how much they are looking forward to a reduced pace. That’s not only offensive to the team but it’s completely uninformed. I have no idea how break-neck-paced their corporate job was, but nonprofit chief executives shoulder tremendous responsibility to meet unrelenting community needs and usually never have enough resources. I have worked with nonprofit chief executives who are diligent about maintaining some semblance of work-life balance, but never have I heard one refer to their role as slow-paced or easy. The message should be about your enthusiasm for making a change and growing as a leader.

  1. Serving on a nonprofit board is not equivalent to being the CEO.

I serve on the finance council of my church, but I would never think I knew what it meant to be the pastor. Service on nonprofit boards is critically important, but it’s not the same as running the day-to-day operations, including all the fundraising, finance, facility, human resource, and compliance challenges. Be humble. Say that you believe in the mission because of your service on the board, which is important, but then say that you look forward to learning the inner workings of the organization. Maintaining that level of awareness through the interview and possibly the onboarding process will be important.

  1. Remember that no one owns a nonprofit.

For-profit leaders are often stunned at the complicated structure and decision-making processes of a nonprofit. Plus, if a founder is still involved in the organization, that adds another challenge as they often act or believe that it’s “theirs.” Non-profit chief executives make decisions all day long, but they are limited in their authority. The board is ultimately responsible for strategic direction and financial oversight, which means some boards take a heavier-than-necessary hand in decision making (see our former column on this topic). All too often, nonprofit leaders must seek board approval before proceeding on matters big and small. We hope these practices improve, but it will never go away since it’s not a privately held corporation – it’s a public charity. Asking how decisions are made in the interview will give you the insight you need.

  1. Talent recruitment and retention strategies are limited.

Building and leading teams is essential for any chief executive, but corporate leaders are often stunned at the lack of resources. There are lower salaries and a lack of insurance (health, vision, dental, disability, and life), retirement accounts, training and professional development funds, association memberships, bonuses, and other standard HR practices. Add in the fact that many nonprofits have no HR director and you can imagine the challenge of managing high turnover rates, open/unfilled positions, interview volume, and the time commitment of onboarding. You must think creatively about how to reward and incentivize talent and how non-financial benefits can be utilized.

  1. Beware of unrealistic expectations.

A new chief executive said to me, “the job I interviewed for is not the job I have.” Nonprofit boards expect the chief executive to be exceptional at everything, but they typically don’t have a full understanding of the work, which is why the job posting is often unrealistic. When there is a corporate candidate, they think “great, this person will take the organization to the next level” or “this person will be able to turn things around in six months.” Boards forget the steep learning curve and expect far too much, far too soon, with far too few resources. Be cognizant of this dynamic. Ask critical questions in the interview, including the highest priority leadership skill and attribute needed at this time in the organization’s life cycle.

The sector needs more talent. Corporate leaders can and should be viable nonprofit candidates. We hope this list informs your search process for success.

Article by Kerri Mollard, Founder and CEO, Mollard Consulting

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