March 15, 2021 – What makes a not-for-profit organization great? Its mission, of course, as well as dedicated staff, volunteers, board members and various stakeholders. But according to executive recruiters, what may be most important is exceptional leadership – especially in such a politically-supercharged climate supported by a challenging economic environment. According to a newly released report by WittKieffer, leadership is ultimately the differentiator between an organization thriving or merely surviving. What defines an exceptional non-profit CEO or executive director?
Several key attributes come to mind, say recruiters who specialize in finding these mission-driven leaders: being creative, credible, and communicative; the ability to inspire the ranks, raise funds and ensure long-term sustainability; understanding public policy, public relations, corporate partnerships, operational excellence and, most of all, strategic planning. Hiring for key roles among charitable organizations took a hit during the pandemic said leaders of search firms that serve non-profits. But business is starting to pick up. Healthcare and human service organizations, foundations, advocacy organizations, among others, have seen an expanding need for talent in areas like human resources, finance, and external relations – communications, marketing, and fundraising. There has also been a good share of for-profit executives shifting to the non-profit sector, a migration that has been underway but is now accelerating in the middle of a global pandemic and mass social upheaval.
Infusing Purpose and Direction
“Demand for talented CEOs will remain strong among non-profit organizations in 2021,” said Jim Zaniello, founder and president of Vetted Solutions. “Perhaps more than ever before, boards will rely on strong, innovative partners to provide direction and leadership. Boards will continue to look for people who can build capable, committed high-performing teams, and infuse the organization with a clear sense of purpose and direction.” Look for finance to be an area of focus, he said. Non-profits want “proven CFOs, who have the expertise to serve as a true business partner,” he said. In other roles, “look for more interest in finding ‘storytellers’ – solid communicators, who can help differentiate organizations in a crowded and busy environment.”
Trade associations and professional societies have been among the most active organizations in overall hiring within the sector, said Mr. Zaniello. “Talented CEOs are especially sought after, as are key senior staff.” Not surprisingly, he said, dynamic CEOs are in high demand, as are professionals with campaign and communication expertise who can help foundations and issue-focused non-profits advocate more effectively connect with wider circles of stakeholders.
“Interest in finding talent from the corporate side continues to be strong – especially among organizations that share certain key characteristics,” Mr. Zaniello said. “In part, that’s because non-profit organizations recognize they depend on exactly the same level of capable, inspiring leadership as the commercial business world.”
The Pandemic Impact
“When the pandemic first hit, there was a sudden slowdown as organizations adjusted to virtual work and the potential of decreased funding due to an economic slowdown,” said Molly Brennan, leader of the non-profit practice at Koya Partners, part of the Diversified Search Group. “This most significantly impacted organizations that were dependent on in-person activities for revenue, such as arts and culture organizations.” But the ensuing social unrest related to a national racial reckoning galvanized donors and progressive non-profit organizations, resulting in increased funding and hiring. “The sector rebounded and adapted to the new pandemic reality with remarkable resilience and creativity, and we expect hiring to remain strong into 2021,” she said.
Ms. Brennan says her firm has noted active hiring across the sector, with a particular increase in organizations focused on progressive issues, such as electoral politics and racial equity. “This was, and is, certainly tied to the election and the surge in financial support for many of these organizations,” she said. “But hiring has rebounded across the sector, including in the organizations initially hit most hard by the pandemic, such as cultural institutions and the healthcare sector.”
The last decade has seen an increase in executives migrating, or “crossing over” from the for-profit to the non-profit sector, and that has continued. “We’ve talked to many executives who feel a personal drive to align their work and their personal values and mission and see this as the right time to take that leap,” said Ms. Brennan. “Non-profits are more focused than ever on strong management skills and business acumen, which makes these candidates attractive in many ways.”
Mary Lee Montague, founder and chief consultant at Montague & Associates, said that many organizations are at a crossroads with a lot of heavy lifting in their future to get back on track, let alone survive, post COVID-19. “Strategic plans are being altered due to the pandemic and if an executive happened to be at a personal crossroad of ‘stay or go’ prior to the pandemic we are finding many now taking this time to pass the reins to the person who will do the necessary heavy lift, develop the new plan and see it implemented,” she said.
More importantly, Ms. Montague said that different management skills and experience have risen to the top of the candidate ‘must have’ list. Key criteria for leaders during and post-pandemic period include empathy; short term strategy vs. long term strategy; crisis management; dealing with financial unknowns and the development of contingency plans; creativity, hyper communications; and agility and the ability to think outside the box. “The future holds many tough decisions and not all leaders have the experience to deal with challenging ‘what ifs’ in a calm, focused manner while managing a virtual team.”
Strategic Hiring is Key
“Recruiting for non-profit executives slowed in 2020, but it’s coming back well as we move into 2021,” said Deb Taft, CEO of Lindauer. “While the pandemic caused hiring slowdowns and freezes last spring and summer, we saw some incredibly innovative recruiting approaches that kept mission delivery and revenue generation on track.” Organizations with strong boards and leaders used 2020 as a time to regroup and stay in good hiring shape, she said. “Top talent is still in demand and willing to make a move, and non-profits that secure that top talent will be in a far better position to emerge strongly from any downturn.”
“Organizations with strong governing boards and sophisticated leaders who have weathered previous downturns remain super focused on strategic hiring,” Ms. Taft said. “In the midst of staff cuts, they are still resourcing key roles and going to market. Revenue-producers; finance and operations leaders; marketing leaders; EVPs of diversity, equity and inclusion; digital evolutions of traditional roles; and, of course, expert chief executives are all strongly in play.”
Successful candidates emerge most often from the corporate arena when an organization is ready for, or truly requires, a leader with business skills and acumen, said Ms. Taft. “Turnarounds, transformations, and mergers are prime opportunities,” she said. “Successful candidates apply their competencies, however, understanding that mission-driven organizations have unique societal mandates. Bottom-line success is not enough, and not the reason for a public charity’s existence. With a healthy financial and operating infrastructure, the delivery of impact for patients, research, youth programming, education or social service must be achieved,” she added.
Nat Schiffer, managing director at The Christopher Group, says that non-profits have many advantages when it comes to recruiting. “They are mission-driven; they offer cultural advantages; they tend to value diversity, equity and inclusion in a progressive way; and the employment brands tend to be very recognizable,” he said. Mr. Schiffer said that hiring activity for non-profits increased substantially this past year. “We have seen robust activity from professional associations, foundations, and from government agencies such as the federal reserve banks and national laboratories.” But the two biggest areas for The Christopher Group continue to be academia and healthcare delivery systems.
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Mr. Schiffer said that roughly a third of the time he and his colleagues see candidates cross over from the for-profit world. “It tends to be more demand-driven because the institution has to be comfortable with it to start. The way work gets done in the non-profit world is different. It tends to be more committee and consensus-driven with a heavier diet of governance.” But non-profit organizations are changing the world, he said, “and in the process are making quality of life better for humanity and they play center stage roles in the communities in which they operate.” That makes it much easier to get behind that kind of change and opportunity, he said.
A Call for Transformational Leadership
Associations have been active with CEO recruitments, as have academic medical centers involved in COVID-19 research and treatment, according to Diane Charness, global practice leader for the non-profit and education sector at ZRG. “The pandemic and recent societal crises have accelerated the need for transformational leadership, innovation, and a renewed focus on diversity and inclusion of staff, leadership, boards, perspective, and management practices,” she said.
“Philosophically and based on research findings, I believe strongly that a diversity of experience best informs the development of transformational leaders, regardless of sector expertise,” said Ms. Charness. “In my practice, I work closely with boards and leadership to consider the potential of transitioning executives from outside the sector. These discussions are often robust and can be controversial.”
To innovate, she said, non-profits can successfully identify and onboard executives from industry to broaden thought-leadership, “but it must be done with skill and insight to increase the likelihood of a successful transition and onboarding.” The use of emerging data tools can be employed to optimize leadership selection in this regard, she added. “When open, and depending on the role, our executive slates are often comprised of those from other non-profits, along with executives from the corporate and/or government sectors,” she said.
“Hiring slowed dramatically in spring 2020, when non-profit leaders were unsure about the future,” said Kris McFeely, director of executive search at Campbell & Company. “It then picked up again in late summer and fall, as the outlines of how long the pandemic would last had become clear and organizations recognized they couldn’t stay in a holding pattern forever.” But anxiety remains. “On the hiring side, employers are concerned about how to recruit in a pandemic, how to time new hires, what relocation may look like (or if it’s possible at all), and whether it makes financial sense to recruit given the associated economic challenges,” she said.
“Candidates, for their part, have questions about relocation vs. working remotely, how to best sense the organization’s culture through video interviews, and the stability of organizations given the economy,” said Ms. McFeely. “In many ways, these factors have made both sides willing to have open, honest conversations during interviews in ways they wouldn’t have before. Still, both hirers and potential hires are also more cautious about making actual changes.”
Predicting a Way Forward
The non-profit sector has not been immune to the pandemic and, in fact, the negative impact was swift and the disruption severe in some areas, including arts and culture, recreation, as well as education, said Kimberly Archer, co-leader of the global non-profit practice at Russell Reynolds Associates. “Human service organizations saw significant spikes in demand for service with economic fallout and other stressors. Business models were stressed and reserves tapped to account for costs once off-set by volunteers, convening, fundraising events and entertainment that dried up in days without warning,” she said.
Ms. Archer notes that hiring is happening in healthcare and human service organizations, foundations, advocacy organizations and across the sector in functional areas such as human resources, finance, and external relations – communications, marketing, and fundraising. “Organizations experienced never-previously-imagined pressures in such rapid succession beginning with the pandemic, followed by a racial reckoning in our nation, to political uncertainty,” she said. “These issues tested leaders like never before, illuminating areas of strength, but also gaps, which force and inform the talent agenda.”
At times, a “crossover candidate” from the private sector is well-suited to a non-profit leadership role and it is becoming more and more common practice to explore candidates with this background.
“Oftentimes, private sector experience is sought after when change management is afoot or for functional and operationally-oriented positions, as skills can be transferable,” said Ms. Archer. That said, there is complexity within non-profit organizations that is often underestimated. “While most organizations seek to validate strong mission alignment, emphasis should be around cultural alignment and core leadership competencies. Understanding how someone works is pivotal to success when considering crossover candidates. We see the best leaders spike in areas such as relationship building and influence to support stakeholder management, but also openness and inclusivity to build and drive strong teams motivated by mission and impact.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media