Sector Switch: 5 Tips for Transitioning from Corporate Executive to Nonprofit Leader

by Mary Ontko
Senior Search Consultant, The Moran Company
“We Find Great Nonprofit Executives”

In my recruiting work, I speak with many corporate professionals who are interested in making a career transition to the nonprofit sector. That’s understandable – it’s a great sector in which to work! According to the Independent Sector, there are nearly 1.6 million tax-exempt organizations in the United States, and 10% of the American workforce is employed by a nonprofit. The work of nonprofits is inspiring, transformational – and necessary. Nonprofit organizations fill a critical gap in services for those in need.

Executive search consultants play the part of matchmaker for our nonprofit clients, seeking a fit for both skills and attributes. Interest in and adherence to a common mission is a very important attribute in a candidate, and not one possessed by all.

Here are a few key differences between the corporate world and the nonprofit sector that should be carefully considered by candidates interested in making a career transition:

• INVESTORS vs. DONORS – While both corporations and nonprofits have investors, their motivations and strategies may look very different. Corporate investors ultimately expect a financial return on investment, while nonprofit investors (which can include individual and corporate donors, foundations and public entities) are interested in solving a societal problem and making the world a better place, regardless of financial return. This can make the timeline for progress on goals look different than in the business world.
• INDIVIDUAL vs. COMMUNITY GOVERNANCE – Unlike a business, nonprofits are governed by the community through the leadership of committed volunteers. Individuals do not have an ownership stake in a nonprofit organization. This involves the need for greater community engagement, consensus building and buy-in and is a different type of governance. Nonprofits are governed by a volunteer board of directors, who ideally have term limits, thus making transition in governance an inevitable – and healthy – part of nonprofit life.
• COMPENSATION DIFFERENCES – Although the nonprofit sector is a very satisfying career path, compensation and incentives can be very different. Nonprofit revenues most often come from the generosity of others, through donations and investments, and the sector is very sensitive to how those funds are used. In mission-based work, staff tend to be compensated with an agreed-upon salary, not commissions and bonuses as is more common in the business world. Organizations such as the Association of Fundraising Professionals offer guidance on professional ethical standards in compensation for charitable fundraisers.

As executive search consultants, we have extensive experience evaluating the skills of professionals in other sectors and considering their fit for nonprofit leadership work. Based on our experience, here are 5 tips for consideration as you prepare to seek work in the nonprofit sector.

1. Explain Congruent Skills. We believe that leadership and executive-level skills can be transferable from the corporate sector to the nonprofit sector, with the above sector differences in mind. A leader who has helped hire, coach and motivate a corporate staff to grow a company’s revenue and scope could certainly use those skills to do the same for a nonprofit mission, provided that leader is prepared for the key differences in the sectors. Likewise, a sales professional who understands and demonstrates the value of building relationships over time around a shared passion for an organization’s mission can be a successful mission-based fundraiser.
2. Demonstrate Your Passion. During our conversations with candidates as we seek to make a match, we are looking at “fit” with the mission and vision. Can we tell from our conversation with you that you have a passion for the mission of the organization, beyond what you say? How have you demonstrated your personal interest in that mission?
3. Show Your Interest/Commitment. About 25% of American adults volunteer in the nonprofit sector. Professionals who are interested in making a transition to the nonprofit world should participate in this world as a volunteer before seeking a job, either through Board or committee service, as a program volunteer, or both. Another option is to build skills and knowledge through the workshops offered by local associations of nonprofit professionals. Local universities might also have certificate programs, which would be a shorter-term commitment than an advanced degree in nonprofit management or a similar field of study.
4. All Hands on Deck. Good nonprofits work within their governance structures to react quickly and nimbly to the needs of those they serve, and everyone – top to bottom – plays a part. The “all-hands-on-deck” service mentality is prevalent at all levels of nonprofit organizations. As a transitioning leader, be sure you are willing to roll up your sleeves and do what is needed to meet the needs of the organization in that moment, while working toward a vision that will best use everyone’s talents and time.
5. Willingness to Learn. It has at times been popular in the nonprofit sector to champion “running a nonprofit like a business.” Corporate leaders have made this transition with a story that they are the saviors of the sector, using their savvy to educate the nonprofit rubes. Naturally, this has raised some hackles in the nonprofit world. While certain corporate principles are certainly universal, there is no doubt that the two sectors are fundamentally different, for the reasons outlined earlier. When looking to make this transition, acknowledge the things you don’t know about the sector and demonstrate your willingness to learn.

The Moran Company has completed more than 100 nonprofit executive searches and evaluated thousands of candidates, including many from the corporate sector. If you are considering a transition, you are not alone. It is rewarding and inspiring to join other committed individuals to work for a common mission and cause. Keeping in mind the key differences between the sectors, evaluating your willingness to work within a new paradigm, and considering the steps you need to take to demonstrate your strong candidacy, a transition from the corporate sector to the nonprofit world is certainly possible.

Nonprofit organizations, if you are filling a key leadership position, call us. If you think a candidate from the private sector might be the right fit for your open position, we can help your board consider the opportunities and costs of such a goal and whether the fit is right for your organization. Contact us today for a free 30-minute consultation.

© 2019 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