Relocation Considerations for a Nonprofit Executive Search

One of the advantages of working with a search firm like The Moran Company to recruit a nonprofit leader is that we have a national network of potential candidates. Although there might be many great applicants in your local community, sometimes the ideal candidate must relocate.

The expense to relocate a new leader can be daunting, particularly for a nonprofit with a limited budget. It is important to determine if your organization is willing to pay for the cost of relocation, and if so, how much are you willing to spend?

There are differences in how the nonprofit sector typically handles relocation expenses compared to the for-profit sector. Usually, there is no full reimbursement. Below are several options I’ve seen nonprofits offer:

1. Relocation Stipend or Signing Bonus: Given all of the factors that go into moving from one place to another, many organizations opt to offer a lump sum as a goodwill gesture to support their new leader’s transition. This amount can be budgeted in advance and can range from $5,000 – $15,000 depending on the circumstances of the organization and the candidate.
2. Expenses Paid: Some organizations might be willing to reimburse their final hire for relocation costs up to a certain dollar amount.
3. No Relocation Package: Sometimes the reality is that an organization must conserve financial resources for its overall mission and competitive staff salaries. If this is the case, we simply recommend the nonprofit share this with candidates early in the search so that expectations are aligned and there are no surprises in the final stages.

As you review these options, here are several factors to consider when negotiating with a relocating executive in order to be prepared for candidate expectations:

• Physical Moving Expenses: The most obvious expense is the cost of hiring a moving company. Depending on the distance of the relocation and the extent of items being moved, the amount of this expense can vary significantly.
• Housing: In order to relocate, the candidate might need to sell a home or break a lease. In one of my searches, the hired candidate asked for several months of rent due to a current landlord in order to break a lease early. Sometimes an individual might ask for funds to cover a house hunting trip, help with the costs of selling a home, or temporary housing for several months while looking for a new home.
• Health Insurance: Although this is not exclusively a relocation issue, a gap in health insurance tends to arise more often when a relocation is necessary. For example, the timeline for relocating might extend for several months. If working remotely is not possible and the candidate terminates employment with the former employer, there could be a gap in health insurance coverage. I have seen instances when the hired candidate asks for a stipend to provide health insurance coverage prior to starting the new role.

Many organizations will also include a payback clause in the relocation agreement. This clause requires the employee to repay part or all of the relocation stipend in the event that the individual resigns within a certain period of time (e.g. within the first year). Because the relocation stipend may be considered taxable income by the IRS, make sure that new employee is familiar with the most recent IRS guidelines on moving expenses.

When posting a nonprofit executive position for a client that is willing to include a relocation package, we typically indicate that “relocation assistance is negotiable.” However, the hiring team should agree on a range at the onset of the search so that this expense can be offered if necessary.

The Moran Company has experience recruiting local, regional and national candidates for key leadership and fundraising positions. Contact us today for a free 30-minute consultation.

By Mike English, M.P.P.
Vice President for Search Strategies & Senior Search Consultant
The Moran Company
“We Find Great Nonprofit Leaders”