Four Ways to Fund a Nonprofit Executive Search

by Laurie Minx
Director of Communications, The Moran Company
“We Find Great Nonprofit Executives”

If you are like most nonprofits, you are keeping a close eye on your bottom line right now. This is especially true at the end of any given year – and even more so in a year when agencies have faced unprecedented challenges amid a pandemic. You want to be good stewards of your financial resources and continue to have a strong impact in your community.

So what do you do when faced with a planned or unplanned need to hire a key leadership or fundraising position for your organization? Anyone who has served on an executive search committee or personally hired for these positions knows it requires a tremendous amount of time and resources to take on a thorough recruitment effort, whether you choose to hire a professional search firm or not. Careful planning is needed to update the job description, establish a search committee, advertise the position, conduct personal outreach, keep staff informed of progress, rate resumes, screen applicants, schedule interviews, conduct candidate due diligence and ultimately extend an offer to the right individual who can take your mission to the next level.

The Moran Company recruits only for nonprofits – ranging in size from very large organizations to very small agencies with budgets under $1 million annually. What all of our clients have in common, however, is that they are faced with hiring a key leadership or fundraising position. Because of our team’s executive director and fundraising backgrounds, we are sought out by nonprofits that want to ensure the best hire for critical transitions and long-term stability.

Some organizations have funds available within their budgets for executive search services as part of their overall recruitment or succession planning efforts, while other agencies seek additional funding for this purpose. This can be true for smaller organizations or those facing unexpected leadership transitions, for example. Each situation is unique, just like the needs of our nonprofit clients.

Below are four ways we have seen nonprofit organizations secure additional funding for executive search services when necessary:

1. Capacity-building grants from private foundations: Recent trends indicate some foundations are willing to award grant funds with fewer restrictions to build capacity or support immediate operating expenses for organizations. This is incredibly helpful for nonprofits that must adapt quickly to the rapidly evolving needs of their community, programs, and workforce. Not all foundations will fund salaries, but some will consider providing funds for an executive search, especially if they recognize the importance of the position to your mission and the value the right firm can bring when it comes to providing quality candidates. Check with your local funders for capacity-building grants or similar opportunities.
2. Charitable gifts from a board member or benefactor: Individuals who have been highly successful in the corporate world are often accustomed to working with professional search firms. They understand the value the right firm can bring when it comes to providing top talent. When they hear about firms like The Moran Company that specialize in recruiting leadership and fundraising positions for nonprofits across the nation, they may be willing to contribute funds to offset the cost.
3. Endowment or reserve funds: Hiring the right nonprofit Executive Director or CEO is the most important decision a Board of Directors will ever make for the organization they serve. Perhaps a founder is ready to retire, a longtime leader is transitioning to a new role, an unexpected vacancy has occurred, or turnover in a key position is becoming a trend. If surplus funds are not readily available within the budget, the Board may choose to approve the use of certain endowment dollars or reserve funds as a wise investment in the agency’s future.
4. Financial assistance from national partners or affiliates: If your organization belongs to a national network or association, there could be funding available to help offset the cost of hiring a professional firm to lead your executive search. The national office has a vested interest in maintaining the strength of your organization’s leadership. As a bonus, sometimes a reduced rate can be negotiated with the firm if there is an opportunity to create an ongoing partnership to benefit other locations within the network that may need hiring assistance in the future.

Nonprofits continue to ask: “How can we afford to engage a search firm? How can we afford NOT to?” Fortunately, there can be opportunities to secure support for professional hiring assistance, even on a limited budget. After all, the cost of partnering with a firm is far less than the cost of making a bad hire on your own. Within a short period of time, the wrong leader can significantly damage finances, employee morale, fundraising efforts and relationships within the community.

In the end, most nonprofits would like to have professional help when it comes to executive recruiting for key leadership or fundraising positions – as long as funds are available to do so. At The Moran Company, we understand the need to conserve financial resources. We do our best to offer 30 minutes of free advice to all organizations, regardless of whether they can afford our services.

More information about “Budgeting for Nonprofit Executive Recruitment” can be found in our Resource Library. As former nonprofit executive directors and senior-level fundraisers, we are servant-leaders at heart. Contact us at any time if we can be of assistance.

© 2020  The Moran Company, “We find great nonprofit executives.” We specialize in searches for nonprofit executive directors, directors of development/fundraising staff, and other top nonprofit leadership. www.morancompany.com