Hiring a Nonprofit Leader with No Nonprofit Experience – disastrous or brilliant?

You have a key position to fill for your nonprofit organization and there are interested candidates with no nonprofit experience, are they automatically disqualified?  This is the question we want to unpack and examine.  The answer should not be a quick one.  As you will see, there are very solid reasons on both sides of the argument and all of them should be considered.

What Should You Know Before Hiring a Key Leader into Your Nonprofit Organization?

Like any good business leader, when you hire a key leader for your organization, you want to find the best person for the job.  You want someone who has the skills, background and personality that will bring success to your organization and its stakeholders. The big question is, how critical is previous nonprofit experience when you are hiring a key leader for a nonprofit organization?  Is it a deal-breaker if they don’t have formal experience?

In this article, we will discuss the arguments for and against hiring someone with no nonprofit experience and then give our recommendation. As an executive search firm with decades of experience, we’ve walked through this process with numerous nonprofit organizations and the results have been difference-making.

Arguments Against Hiring a Leader with No Nonprofit Experience

The traditional thinking around hiring someone with no nonprofit experience is that the differences between the two are just too vast for an executive to successfully make the switch.  The arguments have merit. See where you line up with these reasons.

1. Understanding of the Nonprofit Sector: There are nuances in the nonprofit sector that for-profit executives will be unfamiliar with such as unique challenges, regulations, and dynamics. For example, nonprofits are often seen as more altruistic than for-profit organizations and while that’s a positive attribute, it can come with unrealistic expectations.
2. Mission Alignment: Nonprofit organizations are driven by a specific mission and a commitment to social impact. This is very different than being driven by revenue goals. Hiring an executive with no nonprofit experience could mean you are hiring someone who will not be continuously motivated by the organization’s cause and its broader societal goals.
3. Sector-Specific Knowledge: Nonprofit executives bring knowledge and expertise specific to the nonprofit sector. Someone from outside the nonprofit space is unlikely to have experience in areas such as program development and evaluation, community engagement, volunteer management, advocacy, and grant writing.
4. Established Networks: Executives with nonprofit experience often have well-developed networks within the nonprofit sector. These networks can provide valuable connections to potential partners, funders, and other stakeholders. Leveraging these relationships can help the organization access resources, collaborate with like-minded organizations, and expand its reach.
5. Financial Stewardship: Nonprofit finances regularly have unique considerations, such as diverse revenue streams, donor restrictions, and accountability to funders. Executives without nonprofit experience may struggle to understand the intricacies of financial management in the sector, including budgeting, grant management, and reporting. Their lack of this type of financial exposure can negatively impact sound financial stewardship and the organization’s sustainability.
6. Less Compensation: Making the switch from for-profit to nonprofit almost always means a pay cut. While the attractiveness of working for a mission-driven organization may be attractive at first, there’s a danger that the new hire will feel the pinch of the compensation decrease and decide to move on. Nonprofit organizations want to avoid hiring someone who will only stay short-term.
7. Job Demand: Because of the leaner resources of a nonprofit organization, executives may have to wear many hats. Moreover, they may not have the administrative support that they are accustomed to in the for-profit world.  Additionally, they also must be publicly visible, which often involves attending events on evenings and weekends.  And finally, nonprofits regularly tackle complex societal problems that require innovative solutions and continuous adaptation. All these aspects can result in a very demanding work environment.

Arguments FOR Hiring a Leader with No Nonprofit Experience

Contrary to the arguments above, there are also many strong arguments FOR hiring a leader with no formal nonprofit experience.  Arguably, there is a lot to be gained from people who have spent their careers in the for-profit space.

1. Business acumen: For-profit leaders often possess strong business acumen, including strategic thinking, financial management, operational efficiency, and market knowledge. These skills can be valuable in driving sustainable growth, improving financial stability, and implementing effective resource allocation strategies in your nonprofit.
2. Innovation and adaptability: The for-profit sector often operates in highly competitive environments that demand innovation and adaptability. Leaders from this sector can bring fresh perspectives and creative problem-solving approaches to your nonprofit, helping to navigate challenges, identify new opportunities, and foster a culture of innovation within your organization.
3. Results-oriented mindset: For-profit leaders are typically accustomed to measuring success through tangible outcomes and performance metrics. They can introduce a results-oriented mindset to your nonprofit, establishing clear goals, implementing performance measurement systems, and driving accountability among staff members to ensure the efficient use of resources and the achievement of desired outcomes.
4. Fundraising and revenue generation: Nonprofits heavily rely on fundraising and revenue generation to sustain their operations and fulfill their missions. Hiring a for-profit leader who excels in revenue generation strategies, relationship development and partnership cultivation cultivating will help enhance financial sustainability.
5. Marketing and brand development: Building a strong brand presence and effectively communicating the nonprofit’s mission and impact are crucial for attracting supporters, donors, and volunteers. Leaders from the for-profit sector often possess marketing and branding expertise, enabling them to leverage marketing strategies, develop compelling messaging, and enhance the visibility and reputation of your nonprofit.
6. Operational efficiency and scalability: For-profit leaders frequently excel in optimizing processes, improving efficiency, and scaling operations. They can introduce systems and frameworks to streamline internal processes, enhance productivity, and effectively manage growth, enabling a nonprofit to achieve greater impact and serve more beneficiaries.
7. Cross-sector collaborations: Nonprofits often benefit from collaborations and partnerships with the for-profit sector to achieve shared goals. Leaders with experience in the for-profit sector can leverage their networks, negotiate partnerships, and cultivate relationships with corporate entities. These relationships can open doors for potential collaborations, sponsorships and support for your nonprofit initiatives.

How to Have a Balanced Approach

In deciding whether your nonprofit organization should hire someone from the for-profit sector, it’s important to understand both sides of the argument and be open to the benefits of both.  As an executive search firm, we’ve successfully worked with dozens of nonprofit organizations that have hired incredibly great leaders from both sectors.

We believe the path to finding the best leader for your organization is a two-fold approach.

• Be willing to interview candidates from both the nonprofit and for-profit sectors
• Look for transferable skills

When you get a person with strong transferable skills that match the passion, the heart and vision of the mission, it’s a powerful combination.

Transferable Skills to Look for When Interviewing

When you are interviewing candidates to fill a leadership role in your nonprofit, intentionally look for transferable skills. There are many great skills that transcend both for-profit and nonprofit sectors, but here are a few that we highly recommend looking for:

• Strong communication skills
• Vision casting
• Brand development
• Strategy building AND strategy implementation
• Business/finance acumen
• Relationship building
• Resource generation
• Team development
• Talent management

It all boils down to finding the RIGHT person for the job. That “right” person may have formal nonprofit experience or have more informal experience as a volunteer or a board member.  Our team firmly believes you must find someone who aligns with the organization’s character, culture, chemistry and competencies.  This is our 4C Recruiting Process® and it makes a huge difference to the success of a candidate – whether it’s our nonprofit client or for-profit.