Non-Profit Sector Heats Up for Executive Recruiters
July 21, 2021 – Nowhere are leaders and talent more deeply passionate about what they do than in the mission-driven sector. Non-profit, philanthropy, and social enterprises are evolving at a rapid pace. According to Korn Ferry, leaders are challenged with doing more with less as they navigate increasing demand. The opportunity to create more meaningful and wider impact is greater than ever, as innovation and technology present new and exciting possibilities. To survive and grow, non-profit leaders and professionals must be agile, strategic, and visionary, Korn Ferry says.
So what attracts talented executives to this sector? Non-profit organizations occupy an increasingly central role in society. According to Russell Reynolds Associates, this also makes the need for search firms to find excellent and visionary boards and executive teams more important than ever. Coming out of a global pandemic, what new challenges do non-profits face, what role can executive search firm’s do to help these organization find top talent, and what type of leaders are required for leading non-profits? Not surprisingly, leading search consultants serving the non-profit sector can provide deep insights on the climate of the industry and what lies ahead.
In the early days of the pandemic there was deep uncertainty about the economy and widespread fears of a broad contraction in the non-profit sector. “Like many of our peers, we were bracing for the worst. In the past year, the business has evolved from apprehension to exuberance,” said Michelle Kristel, managing partner at McCormack+Kristel. “The market today is hot, hot, hot! The volume of RFPs and the number of clients seeking to fill multiple positions is unprecedented. Over the last year, executive search has proved to be remarkably resilient and adaptable. The time-honored practices of in-person briefings, site tours and interviews quickly shifted to video conferencing and technology was leveraged, in ways previously not imagined, to bridge distances and foster connections.”
Even with the pandemic coming to an end video interviews are now the norm rather than the exception. “This makes search committee scheduling significantly easier and saves time and money previously spent on travel,” Ms. Kristel said. “We expect the efficiencies realized through video conferencing will remain for some parts of the process, first round interviews for example, and ultimately hybrid in-person/online processes will become the new standard.”
Ms. Kristel says that her firm expects that the number of distributed staff among non-profit organizations will continue to grow, as remote work has demonstrated that many employees are happier and more productive working from home, and that with dedicated workspace, adequate childcare, and a strong internet connection the quality of work for most employees remains high.
During the pandemic, many people reflected on and reassessed the most significant aspects of their lives – where they live and where they work, according to Ms. Kristel. “For many, the pandemic was a catalyst to seek meaning and purpose in their professions prompting more private sector executives to seek out non-profit leadership roles beyond board and volunteer service,” she said. “Among non-profit professionals, whose careers have been driven by the imperative of people before profit, many are transitioning to or seeking positions with organizations serving communities that reflect an aspect of their intersectional identities. For veteran non-profit employees and newbies alike, the consistent and defining characteristic is always commitment to and passion for the mission. Folks who derive satisfaction from advancing those missions and who are motivated to serve the greater good will be among kindred spirits in the non-profit sector.”
CEOs who are visionary leaders and proven fundraisers are always in high demand. “Over the past year, many leaders postponed retirement or delayed transitions,” Ms. Kristel said. “The increased demand for services, particularly in organizations with healthcare, housing and food programs, put additional burdens on staff, many of whom were juggling remote work, childcare and distance learning in addition to their increased professional responsibilities. Further, the disproportionate impact of the pandemic on communities of color and a national reckoning with racial injustice exacerbated stressors on BIPOC team members across all sectors. During this period of disruption and unrest, we saw many leaders prioritizing organizational stability over self. The need to ensure resources, to adapt and expand programs, and to provide support and healing for staff became paramount. As post-pandemic life takes root, I expect we will see a significant uptick in CEO transitions.”
Newly Created Roles
Additionally, related to growth in the non-profit sector, Ms. Kristel has seen many newly created positions reflecting more layered reporting lines. Chief of staff positions and hybrid positions—such as those that combine development with marketing and communications, leveraging the synergies between the disciplines and recognizing the importance of cohesive messaging across audiences—are growing trends.
“Clients are more open to profit sector candidates, especially for finance, operations and marketing positions,” said Ms. Kristel. “With resumes that can be difficult to decipher and persistent questions about culture and fit, academic and career military candidates have often been overlooked by mission-driven clients. With coaching and guidance to understand and appreciate the vast hard and soft skills these candidates bring to the sector; we are also finding clients increasing receptive to so-called ‘out-of-the-box’ candidates.”
Executive search within the non-profit sector continues to be robust with much of the demand driven by retirements combined with the fact that non-profits have struggled historically to effectively plan for succession and maintain bench strength, according to Rose Spano Iannelli, co-founder and managing partner of Spano Pratt Executive Search. “Pent-up demand caused a dramatic surge in March of 2021 and the executive search industry for the most part appears to have fully recovered across the board,” she said. “We expect that the remainder of 2021 will continue and perhaps finish even stronger than pre-pandemic numbers.”
“Non-profit executive search is governed by volunteer boards of directors comprised of leaders within the business communities served,” said Jamie Pratt, co-founder and managing partner of the firm. “These individuals are charged with deciding who leads which is the most important role of any board member; and are doing so during a challenging unique time. Guiding this process and understanding the competencies required to lead and rebuild organizations during post pandemic will result in the need for even more sophisticated board members who are well versed in the mission, who are able to dedicate ample time, and who are astute regarding the executive selection process.”
“A non-profit organization is a business and as such many of the characteristics and skills required for successful leadership in commercial entities transfer well into the non-profit sector,” Ms. Spano Iannelli said. “The major differences can be found in how decisions are made and the thoughtful consideration of the impact of its decisions on the constituents served.”
“Non-profits are led by governance boards,” Ms. Pratt added. “Governing board members want to know that they can trust their leader to execute necessary change and be knowledgeable as it relates to changes in funding sources and of the needs of the communities served. In addition to strong business acumen; successful candidates will be champions for inclusion, and be genuine in their alignment to the organization’s mission. Authenticity, transparency and vulnerability have all surfaced as desirable characteristics that resonate well in the interview process.”
Organizations that rely on philanthropy as a major funding source are especially dependent on effective fundraising professionals have been keeping search firms busy. “The combination of this art and science required for these roles is in high demand,” Ms. Spano Iannelli said. “Relative to DE&I, as the country has focused its’ attention on the imperative of equity and inclusion within the leadership ranks, the demand for people of color to step into senior leadership roles has dramatically accelerated. Just as consumer product companies have long understood the value of leadership that reflects the customer base, the non-profit sector aspires to have a leadership team which reflects the demographic of the population and communities served. Candidates who bring an understanding and successful track record of integrating equity into a culture and candidates who themselves are diverse are in very high demand.”
The focus on cultural fit that we have seen in the past 10 years continues and this is an important area that must align, according to Ms. Pratt. “In addition, organizations are clear about the key performance metrics needed to succeed and are crafting tight position specifications to minimize the risk of a poor hire,” she said. “Filling these positions can feel like threading a needle. Non-profit organizations, especially those with a multi-state or global presence, are showing openness to even C-suite executives holding a primary residence outside the headquarters region.”
Higher Education Sector
With delayed retirements due to the pandemic and the additional stresses placed on institutions and their leaders in the last year, many colleges and universities are searching for new presidents at this time. Research published in March of this year from Higher Education Publications Inc. indicated that since April 2018, following presidents and chancellors, the provost position has been turning over at the highest rate. “We are not just seeing presidential turnover but also those at the senior administrative level,” said L. Jay Lemons, president of Academic Search. “The current market for recruiting university and college presidents is bountiful. We are seeing candidate pools that include over 100 applicants. Although the pandemic may have discouraged some individuals from announcing their departures at first, overall we have not seen a decrease in prospective candidate inquiries. This holds true for other leadership positions as well.”
Dr. Lemons notes that the role of the chief diversity officer at colleges and universities is new to many institutions and increasingly so in the last decade. “Whereas in the past there have been individuals whose scope may have encompassed elements of diversity, equity, and inclusion, such as Title IX officers, there are now designated diversity officers who sit at the president’s table and provide enterprise-wide leadership,” he said. “In some cases the role has been created in response to an institutional crisis associated with racial incidents on campus or to upheaval. However, in any case, it is imperative to the success of the leader serving in the role that they be a part of the senior leadership team and be given the authority and resources to enact substantive institutional change. As campuses continue to face social, cultural, and political challenges, the chief diversity officer is all that more critical in affirming an institution’s commitment to diversity, equity, and inclusion, effectively engaging internal and external stakeholders across the diversity spectrum, and ultimately promoting the college’s success.”
Diversity, equity and inclusion has always been important in the recruitment process and is only more so today, according to Dr. Lemons. “Requests for proposals are consistently asking that we demonstrate our commitment to diversity as an organization as well as in recruiting a diverse pool of candidates,” he says. “Our best practices have developed over the years to include more intentional efforts to educate the search committee on mitigating bias at every stage of the search process. In addition, we have found that more purposeful efforts are being made at the very beginning of the search to build a diverse search committee that reflects more broadly the campus community and demonstrates a commitment by the institution to a more inclusive process.”
Looking ahead, Dr. Lemons says that he is already seeing an uptick in the number of requests for proposals in comparison to this time last year. He says he suspects that number will continue to rise and become more in line with what his firm experienced pre-pandemic. “As universities and colleges begin to find their footing out of what was an extraordinary year, we expect that they will continue to face funding challenges, shifting demographics, equity and diversity issues, changing technology and teaching modalities, among other trends,” he said. “The need to find adaptable, innovative, talented campus leaders is and will remain important for the growth and success of our higher education system moving forward.”
Alive and Well
“From what we have seen, search is alive and well, however, there are many variations on the theme,” said Karen Alphonse, search solution leader and executive coach with ExecSearches. “Organizations that have kept pace with the shift towards remote work seem to be thriving. Others that lag in terms of their technology orientation may be experiencing a more challenging time of it. However, there are many factors, including mission relevance, flexibility and the overall financial health of the organization that affect resilience.”
Despite COVID, many search firms seem to have done brisk business over the last year. “A number of non-profits have taken the COVID pandemic as a time to regroup and get energized,” Ms. Alphonse said. “For many organizations, it has been a time of introspection and a time during which existing and future leaders have been called to meet incredible challenges. This redoubling of commitment and focus has generated many new searches, especially for leaders. Organizations that are flexible, financially stable and engaged in long-term planning seem to be doing well.”
Top Skills for Non-Profit Leaders
“Overall management skills, creativity, innovation, fundraising skills, vision and flexibility define many of the sought-after candidates in the non-profit sector,” said Ms. Alphonse. “Good managers tend to do well, despite the times. Those who can embrace change and have the other skills in place tend to excel. When times get tough or change abruptly, those comfortable working through less-than perfect scenarios will have a competitive edge.”
When discussing what roles are the most in-demand and talent shortages for non-profits, Ms. Alphonse points to leadership roles such as executive directors (with vision and management) and also fundraising roles. “There has been a conspicuous increase in diversity and inclusion leadership roles. Equity and inclusivity, at least for the moment, are in high demand,” she said. “I would say that any perceived shortage may have more to do with how we define and invite talent to step into leadership roles than to do with the existence of talent. From what I have seen, talent is available. However, we sometimes fall short in being creative about supporting emerging leaders until they hit their stride.”
“Often, we seek fully developed leaders with a complete set of skills in place,” Ms. Alphonse says. “If we are willing to provide coaching and to expand our vision of to include those with identifiable potential, we will go much further towards filling our talent needs during COVID and beyond. That being stated, there seems to be an increased demand for diverse leaders. The nation seems to be redoubling its efforts to address workplace equity and to hire leaders who are live exemplars of diversity in action. If you seek talent in this regard, you have to move quickly and be prepared to pay top dollar to purchase the expertise. Those adept at fundraising are constantly in demand, and this trend has continued through the pandemic.”
The ExecSearches.com job board has been a key source for not-for-profit organizations and executive search firms to recruit senior management and executive talent since 1999. “We have seen a 23 percent increase in non-profit executive job postings in the first half of 2021 as compared to the first half of 2020,” said F. Jay Hall, founder and president of ExecSearches. “We have noticed a sharp increase in DEI-related job postings. While hiring didn’t wholly stop during Covid, it certainly slowed. We believe the increase in job posting activity from non-profits and the firms that service them demonstrates a return to regular activity for most non-profits. We have also noticed a sharp rise in fully remote positions and positions that are partially remote.”
Philanthropic talent (fundraisers and philanthropy leadership) remains an area that is in high demand as non-profits compete for funding from multiple sources, according to Mr. Hall. “Our experience is that organizations without sufficient philanthropic leadership or leaders who possess experience with fundraising are struggling,” he said. “We encourage the board members we work with that when considering a pool of candidates for an executive director to also look at the rest of the pool of candidates and to keep an eye open to identify candidates throughout the search process where we can apply certain skillsets and experience to fulfill an organization’s strategic plan. Don’t throw out the candidates you have after you hire your new executive director. Work with your executive recruiters to identify candidates throughout the search process that may be a good fit for other positions.”
“One executive director pool of candidates may also contain candidates for different vital roles, including senior philanthropy roles,” he said. “Organizations wanting to increase their philanthropy staff may need to stay open-minded about candidates who possess the critical characteristics of a great fundraiser but don’t have the experience. Boards should remain open-minded about providing training and resources for candidates or in-house talent who possess these essential skills to build from within the organization or local community.”
Thriving During a Downturn
“Against all expectations at the beginning of the pandemic, 2020 was our best year ever,” said Sam Pettway, founding director of BoardWalk Consulting. “It took several years for us to recover from the recession of 2008-09, but the 2020 pandemic’s impact was of a different order. COVID-19’s effect on our clients and the communities and constituencies they serve was incalculably severe, a fact we are reminded of every day in our conversations with clients and candidates. Internally, the pandemic forced us to revisit essentially every one of our business processes, but the business itself continued to thrive. The stresses on our colleagues, especially those caring for elders or small children, were off the charts, but for the most part all of us got through the year with grace and gratitude.” 2021 started off a bit slower than Mr. Pettway might have liked, mainly because the demands of executing searches underway the final quarter of 2020 and the first quarter of 2021 took time away from proactive business development.
“Having served an eclectic array of foundation and non-profit clients in at least 33 states, we are less influenced by swings in any one sector,” Mr. Pettway said. “Happily, good work is its own best advocate, and we are on track for another record year. We’ve added to our research team in recent months and soon will add to our consulting and administrative teams as well. We’re still cautious about expansion—we have never sought growth for growth’s sake—but the current momentum feels solid.”
Non-Profit Work Not for Everyone
Mr. Pettway notes that the best candidates are informed by a sense of purpose beyond profits—not missionary zeal, necessarily, but the desire for impact on more than the bottom line. “Some of our most rewarding conversations have been with business leaders and other professionals with an itch to do more meaningful work,” he said. “These are often people at the top of their game, but somehow the game doesn’t resonate the way it used to, and they’re at a loss as to where they might find fulfillment.”
To be sure, non-profit work is not everyone’s best choice. “Of any 10 leaders contemplating a shift to the non-profit sector, perhaps one or two have both the aptitude and attitude to make the shift successfully,” Mr. Pettway said. “As one of our early placements put it two years after taking a 70 percent pay cut to follow her dream, this has been the most frustrating work of my career—and the most exhilarating. Not every Type A leader handles that balance well.”
Demand for CEOs, which is BoardWalk’s focus, tops the list of the leaders that Mr. Pettway has seen most in-demand. “The pandemic magnified the power of strong leadership, and even the most successful non-profits want to up their game. It all starts at the top,” he said. “Diversity and inclusion efforts, however titled, are rampant now, as many organizations are newly attuned to the ramifications of past cultural norms. How impactful such efforts will be in an organization that has not embraced respect for diversity at the very top remains to be seen, but the efforts themselves are a good step. Strong development officers are always in demand.”
Despite the pandemic—or possibly because of it—demand for non-profit executive search has continued to be robust, according to Nat Sutton, co-leader of the non-profit practice at ZRG Partners. “Now that we are now beginning to return to some semblance of normality, I believe demand for non-profit executive search services will increase moderately. For both corporate and non-profit clients, the pandemic has been a learning experience—one which required flexible, creative leadership to survive and thrive. At this point there has not been enough time to complete extensive marketplace research to determine the permanent impacts of the pandemic and its effect on the workplace and the workforce.”
Over the remainder of the year, boards and CEOs will doubtless begin to analyze where they are now and where they want to be over the next few years. “During the remainder of 2021 and into 2022, as business and society becomes more open, non-profit leaders will, in all probability, examine where their organizations are now, what needed changes and restructuring the pandemic may have identified, how their operations have evolved during that time, and make decisions about their executive talent needs, based on that analysis,” Mr. Sutton said.
“It’s fascinating to sit back and think about the last 18 months since the pandemic hit,” said Diane Charness, co-leader of the non-profit practice at ZRG Partners. “Recruiting came to a brief standstill Spring of 2020, and then began to resurface last summer as organizations realized they needed new executives- ones who can pivot on a dime and are culturally aware and inspired. Once vaccination rates accelerated first quarter of 2021, hiring has escalated significantly from pent up demand. I expect that to continue for at least a year until key positions are filled. The challenge now is on the supply side-a significant percentage of leading candidates is no longer willing to relocate. This is causing boards and leadership to modify their expectations and be as flexible as possible to secure and retain top talent.”
Non-Profit or For-Profit Backgrounds?
Mr. Sutton notes that non-profits are looking for the same kinds of characteristics for profit organizations seek—strong management skills, proven success in growing and building organizations, strong strategic and visionary skills, and financial acumen. “Perhaps the biggest difference between non-profit and for profit leadership is that in order to be truly effectively, a non-profit executive must be mission driven,” he said. “Particularly at the CEO level and in development, executives must genuinely believe in the mission of their organization and convey that commitment to a broad variety of constituencies.”
Mr. Sutton also agrees that fundraising is the lifeblood of every non-profit. “With support from government ever-shrinking, public financial support dampened during the pandemic, and at the same time demand for services often increasing, the non-profit must make up for lost revenue and build toward new goals by fundraising from major donors, grass roots support and foundations,” he said. “That means they must have development executives with a talent for matching (major) donor interests with organizational programs and needs. To be effective they must be attuned to what provides satisfaction to a donor who is able to give generously. That is a qualification that corporate executives don’t necessarily possess.”
“More than ever, non-profits need leaders who can identify and diversify revenue streams to support operations,” said Ms. Charness. “S/he needs to be strong in diversity of perspective and experience, along with the ability to build a case for support thru strategic planning and prioritization. I believe there will be increasing demand for talent from other sectors, to inspire the transference of skills from one to another to solve some of society’s most challenging problems. These kinds of leadership transitions require skill and preparation.”
There is always a high demand for development/fundraising talent, particularly at the level of SVP/VP. “People who qualify for these positions must have a very broad understanding of and experience with all aspects of fundraising, from making the big ask from a potential major donor, to the most current fundraising technology, to developing effective fundraising strategies, to managing a successful fundraising staff,” said Mr. Sutton. “Financial management is also a critical area for non-profits. CFOs who are not only outstanding managers, but can be strategic partners in helping CEOs allocate limited resources in the most effective way are always in demand. Finally, talented CEOs are always sought after in the non-profit market. In most cases the CEOs are not only the senior operating officer of the organization, they are the face and voice of it to the organization’s internal and external constituencies, as well as to the general public. Leaders with charisma, a genuine passion for the organization’s mission, and the ability to truly connect with a broad variety of constituencies are always in demand.”
Non-profit leadership recruitment is on the rise, there is no doubt about it, according to Ms. Charness. “We are seeing increases across the sector including in higher education, healthcare, arts and culture, advocacy and conservation,” she said. “Of particular note is increasing demand for several ‘chiefs’ in technology/information services, fundraising, human capital and diversity officers. These make sense based on the changes underway in business and management.”
Ms. Charness also says that there is a shortage of diverse talent at the most senior level of non-profits and among leaders who have the mix of fund development, innovation, external orientation, and strategy experience. “Non-profits should consider talent from outside its sector in a thoughtful way, using the best practices of our profession now, including data analytics, to analyze which candidates from the private sector will transition most successfully to a non-profit institution, allowing him or her to bring expertise to scale and transform an organization, while respecting its processes and unique history and impact on society,” she said. “This is now needed even more than in years past and can be accomplished successfully.”
