…After 37 years of working in the for-profit world, I was asked to lead a nonprofit social service agency in Philadelphia. Having made the switch from CEO to Executive Director, I get asked about the differences from individuals thinking about making a similar transition as a final professional chapter and what they ought to consider.
So after 6 years here is my list.
1. Talent Matters. In both sectors the better the talent, the better the outcomes. Historically nonprofits have had lower compensation and benefits and the approaches I used to attract talent had to get retooled. While I have found that investing in professional development, best of breed communication practices and an inclusive workplace, as in people who work for you have a seat at the table with strategy and problem solving, all help attract and retain talent in both sectors. The great talent in the non-profit sector is called to this work. Discerning that call is critical in the hiring process.
2. The Pace is different. Not for the challenges, amount of work, and long days. Instead, the pace for getting answers from funders, government, and in matters of compliance is very different. I am used to regulation, but in this sector the amount of paperwork and the number of touches on any given issue is complex and at times lacks a sense of urgency. Persistent and specifically relentless patience is a necessary tool in the tool kit.
3. The myth vs. reality of this work. I thought I was savvy on the issues of poverty, race, economic opportunity. After all, I had run a large business and was well read and involved in nonprofits as a board member and volunteer. Never has the ability to listen, ask questions, talking to the people closest to the work, mattered more. I would urge anyone to come into this work with an open mind and an open heart. Business skill can make a huge difference, but the program work is complex and layered. It took two years before I could start to connect the dots around poverty and race and privilege in this space and understand what mattered to move the needle.
4. Collaboration is not a given. Forty percent of the social service agencies in our region have six weeks of cash on hand. Most agencies depend on government funding for ninety percent of their funding. As an observation, most agencies do not naturally collaborate as a function of protecting funding. I think the ability to bring focus on the work, especially work that delivers impact and to collaborate to produce a wide range of services is a skill where an individual with a business background can bring value. Joint Ventures can bring terrific value to the individuals being served and drive impacts at much more effective levels.
5. Data matters. I am used to using data to drive quality improvement. Getting data that you can take action on is difficult in this sector and only now being recognized as critical to driving process improvement. Like the for-profit work talking to your customers, finding the pain and addressing it is the key. In both sectors, we make the mistake of telling people what they need rather than asking.
6. Overhead. I ran a profitable business with 21% overhead as measured by GAAP and sit on several for profit boards. 990’s if you believe them suggest 8-10 percent in this sector. Funders are only now understanding that overhead is critical to successful programs. Finance, IT, HR, Marketing, Development all need to be done right so programs can function and focus on delivering quality impacts. Changes coming in GAAP will drive a better accounting in the sector. Donors and funders will take some time to reset the model on what defines success. It is not the budget mix, but the impacts. The best agencies deliver impacts in the most cost-effective manner. Education on that mix is critical.
7. Boards. There is a significant difference dealing with a paid board vs a volunteer board. Board recruitment is critical in both sectors. However, with a volunteer board there are different levers when making decisions, and with governance and nominations, while it should not be, it is different. Again this is a space that a business background can add value. It is essential to look at skills, diversity of thought and experiences, funding capacity and networking ability. The ability to have clear, transparent communications, hear from all views, have two-way feedback, and clear expectations, is essential for effective nonprofit board relationship with management.
8. Focus. It is easy to be pulled in many directions in both sectors. A critical skill is the ability to say no to your staff, your funders and board. Your heart will want to say Yes. The key is the focus to drive impact, and it requires a clear vision and strategy. In nonprofit work, there is a tendency to chase funding. Mission, Vision, Values matter, and they should define your work and your direction. If they are right and they respond to real needs, then the funding will follow.
9. Humble Experience. It is easy to think that the scoreboard you measured yourself with in business matters in the nonprofit sector. In many cases it does, but the program work is hard and it by definition is humbling. I would strongly suggest that the better way to share experience is as scar tissue. In that when you made a mistake, share what you learned, that you continued to move forward, that in most matters a mistake is rarely fatal, and that the sun will come up tomorrow. Experience is perspective and it is something you need to share from a frame of reference that matters to the people you work with.
10. Muddy Boots. If you know me, you know the story. You do your best work in the field with your muddy boots listening to the people closest to the work and the people you serve. Ask how we are doing and what can we do better. And you listen. You listen with intention and without defense. I have long believed that a leader is at their best in their muddy boots. This is true in any sector, profit or non, and I could make the case true in life.
Finally, if you are not called to the work I would strongly suggest you consider other options for a final chapter in your professional life. Understand what you are getting into and do it for the right reasons.
But if you are called there is no more rewarding work. You work with amazing people and stakeholders, you have the opportunity to coach young people, you get way more than you give, you learn and grow tremendously, and if you can move the needle in your space, make a difference then the opportunity for a legacy that matters are significant.
But, it sure as hell is not retirement…
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