Non-Profits Seek New Kinds of Leaders with Help from Search Firms

August 5, 2024 – Executive search for the non-profit sector often mirrors broader hiring trends, with a distinct focus on leadership, strategic vision, and organizational impact. Recruiters say that non-profits, generally, are increasingly seeking executives and management teams who can provide strong leadership, articulate a compelling vision, and inspire stakeholders.

Like most sectors, there is a growing emphasis on diversity and cultural fit at the executive level, with organizations seeking leaders who can promote and champion DEI initiatives. In addition, candidates with a proven track record in fundraising, donor relations, and revenue generation are highly sought after.

Search consultants also say that non-profits need leaders who can navigate crises with resilience, maintaining organizational stability and continuing to deliver on their missions. Ultimately, non-profits prioritize executives who are passionate about their mission, committed to making a difference, and capable of delivering tangible outcomes that advance social or environmental causes. “Executive search for non-profits is quite active at the moment,” said Nat Schiffer, CEO of The Christopher Group. “Many non-profit organizations are looking to strengthen their leadership teams to navigate the complexities of the current socio-economic environment. The demand for experienced leaders who can bring strategic vision, operational efficiency, and fundraising expertise is high. As non-profits face increased pressure to deliver on their missions with limited resources, the search for capable executives who can drive growth and innovation remains robust.”

The non-profit sector offers senior executives a unique opportunity to leverage their skills and experience for meaningful impact and mission, according to Mr. Schiffer.

“Many executives are drawn to non-profits because they want to make a tangible difference in society, working on causes they are passionate about,” he said. “The sector provides a sense of purpose and fulfillment that can be more challenging to find in the for-profit world. Additionally, non-profits often present opportunities for creative problem-solving and leadership in areas such as community development, social justice, and environmental sustainability, which can be deeply rewarding.”

Mr. Schiffer notes that The Chistopher Group typically presents candidates from both for-profit and non-profit backgrounds when gathering talent pools for non-profit executive searches. “This approach allows us to ensure a diverse range of skills and perspectives,” he says. “For-profit executives often bring valuable strategic and operational expertise, while those from the non-profit sector may have a deeper understanding of mission-driven work and experience in areas like fundraising and stakeholder engagement. By considering candidates from both sectors, we can find the best fit for the organization’s specific needs and culture.”

“In 2024, non-profits face two significant challenges: financial sustainability and talent acquisition,” Mr. Schiffer said. “Securing consistent funding amidst economic uncertainties is a major concern, requiring organizations to strategically manage their financial resources and diversify their income streams. Additionally, attracting and retaining skilled professionals in a competitive job market is crucial. Non-profits must offer compelling value propositions to potential employees and create supportive, mission-driven work environments to keep top talent engaged and committed. Addressing these challenges demands strong leadership and innovative strategies to ensure long-term success and impact.”

“While the non-profit world is facing threats from an unprecedented number of sources at this moment in time, the sector continues to steadfastly adapt and evolve to meet the needs of our society,” said Maeve Clifford, managing partner and co-founder of Pearl Street Collective. “Economic fluctuations mean rising costs, tighter budgets and increased competition for limited dollars. As a result, we’ll see more organizations diversifying revenue streams and investing in resources that could pay dividends later. Mid-size, major, principal, and planned giving programs are on the rise, as are social enterprises and fee-for-service models. We’ll also see more organizations forming strategic partnerships, creating cost-saving efficiencies while amplifying impact.”

Ms. Clifford also notes that diversity, equity, and inclusion (DEI) continues to remain a critical yet challenging and complex area for the sector. “A June court ruling against the Fearless Fund’s Strivers Grant Contest, part of a broader trend of legal actions against DEI programs in both the corporate and non-profit sectors, challenges the legality of programs designed to support designated populations,” she said. “The decision could have significant implications for a wide range of mission areas and the many individuals and families who rely on the country’s social services safety net.”

“Likewise, hiring continues to be a significant challenge in some parts of the sector,” Ms. Clifford said. “Fundraisers are in high demand with many positions remaining vacant for months at a time. One way organizations are starting to address that need is by investing in bench strength — pipelines of entry level development professionals who will grow with their philanthropic programs. Also needed are more workers adept in areas like digital marketing, data analysis, and constituent engagement.”

“While it’s plain to see that non-profits will continue to face a complex array of challenges in 2024, the sector will prevail thanks to a culture of evolution, and in many ways will emerge as a stronger version of itself,” Ms. Clifford says.

Fierce Competition

“The competition for talented individuals remains fierce in the non-profit sector,” said Shelli Herman, founder and president of Shelli Herman and Associates. “Following the pandemic, many leaders who worked to keep their organizations afloat switched roles, retired, or pursued entirely new opportunities. This trend is expected to persist for another 12 to 24 months. We are seeing transitions at all levels, especially at the CEO level. It also appears that everyone is looking for the same qualities, seeking innovative, transformational individuals who can juggle many balls at the same time. While this is not new, it is more prevalent than ever and makes searches more complex and nuanced, presenting a unique challenge.”

Ms. Herman hears from many people in the private sector who are increasingly interested in non-profit work that such roles give them a higher sense of purpose. “Compared to many private sector jobs, non-profit positions often offer a more profound sense of fulfillment beyond just financial rewards,” she said. “Individuals believe that positively impacting people’s lives, communities, or the environment can bring significant satisfaction and purpose to their work. Switching to non-profit work can provide an opportunity to learn new skills and expand professional horizons. Non-profit organizations require various skills, including program management, fundraising, advocacy, and community engagement. This transition can allow individuals to develop skills they may not have had the chance to cultivate in the private sector, leading to valuable and diverse experiences.”

The challenges ahead are significant for the non-profit sector, according to Ms. Herman. “As organizations rely more on digital connections, third-party technologies, external data sources, and outside service providers, they become more susceptible to direct attacks and their consequences, such as financial, operational, and reputational damage from an attack on a vendor or partner,” she says. “As the pandemic subsides, temporary disruptions to the labor market are evolving into chronic issues. Workforce shortages and skill gaps persist and will be worsened by demographic changes and evolving attitudes towards work-life balance.”

“Simply offering higher pay will not be enough to attract new staff,” Ms. Herman said. “Workers from all generations, especially Millennials and Gen Z, who are increasingly prominent in the workforce, expect more from their employers. Employees increasingly seek flexible work schedules, opportunities for career development, and workplace initiatives that promote diversity, equity, and inclusion.”

“In the past 15 years, fewer households have been donating to non-profits, and the contributions from small and medium donors have been decreasing,” said Ms. Herman. “However, large donations from billionaires have been masking these downward trends by pushing the total amount of charitable giving to new heights. While it may be tempting to celebrate the overall increase in giving, it’s essential to consider where the new mega-donations are going and where the smaller donations are no longer being directed.”

Although there has been a cooling off from last year’s frenzied market, the non-profit search sector continues to be strong, according to Michelle Kristel, managing partner of McCormack+Kristel. “Robust activity can be attributed to several factors, including a rise in transitions related to two distinct generational trends,” she said. “During the pandemic, many boomer-age executives delayed retirement to steer their organizations through seismic financial and cultural disruptions. Over the past two years, as organizations have stabilized and adjusted to the new normal of remote and hybrid work, searches for successors to retiring executives have accelerated.”

Emergence of a New Generation of Non-Profit Leaders

Additionally, Ms. Kristel says there’s a palpable energy fueled by the emergence of a new generation of non-profit leaders. “Like their predecessors, they are driven by a strong sense of purpose and a desire for impactful work,” she said. “However, they are more likely to change jobs in pursuit of opportunities for growth and impact and, of particular importance to younger staff, to find organizational cultures that are aligned with their personal values. The combination of a wave of executives retiring and the openness of next-gen leaders to explore new opportunities has created a dynamic environment for executive search within the non-profit sector, driving significant activity in the market.”

“As a search consultant charged with finding unicorns, we seek and evaluate candidates with myriad backgrounds to curate talent pools comprising candidates with diverse perspectives and lived and professional experiences,” Ms. Kristel explains. “Generally, however, corporate executives constitute a minority of the candidates we introduce to our clients. The reason why for-profit candidates infrequently advance in the selection process relates to the specialized technical skills and personal qualities required of non-profit leaders.”

“Paramount among these is a demonstrated commitment to the organization’s mission,” she says. “When hiring for a mission-driven client, this essential quality is a non-negotiable, must-have. A passion for the mission is often stated in the cover letter and supported by a long history of volunteer work and non-profit board service. Such evidence of genuine dedication is crucial for candidates to advance through our evaluation process.”

For CEO roles, which attract the most interest from corporate candidates, fundraising expertise is often a critical requirement, Ms. Kristel notes. “Recognizing that most for-profit candidates lack applicable fundraising experience, we assess their transferable skills — such as sales or business development — that could contribute to successful revenue generation,” she said. “While our talent pools typically consist of executives with extensive non-profit experience and the requisite technical skills to thrive in non-profit leadership roles, successful unicorn hunters understand that unique talent is found in unusual places.”

Shifting Donor Priorities

The challenges facing non-profits are related to changes in the funding landscape, according to Ms. Kristel. “Pandemic-related funding, in the form of grants and forgivable loans, which bolstered non-profits over the last few years has ended,” she said. “For many organizations, the void left in the wake of the loss of these government-funded programs is not being offset by private funding. Shifting donor priorities in the run-up to the presidential election combined with an overall decline in individual donors and reductions in giving related to financial constraints and economic uncertainty are also depressing non-profit fundraising forecasts.”

“With uncertainties in the funding landscape and increasing expenses due to rising costs, issues on both sides of the ledger are exacerbating challenges for non-profits in 2024,” Ms. Kristel says. “Fortunately, the sector has consistently proven to be resilient, persevering through challenges with ingenuity and a fierce determination to serve clients and communities and advance their missions.”

“Shifting donor priorities in the run-up to the presidential election combined with an overall decline in individual donors and reductions in giving related to financial constraints and economic uncertainty are also depressing non-profit fundraising forecasts.”

“We’ve seen a bit of unevenness in 2024, with a lot of hiring activity at the beginning of the year, then a bit of a slowdown in Q1,” said Molly Brennan, global managing partner, non-profit and social impact practice at Diversified Search Group. “But we’re seeing a quick rebound that is fueled by the continuing pace of retirements from long-time leaders and founders as well as patterns of giving in philanthropy.”

“One of the lasting effects of COVID is widespread desire to align personal and professional missions and interests,” Ms. Brennan said. “We hear from so many candidates who are eager to take their private sector skills and apply them for greater social impact.”

Ms. Brennan says that her firm’s goal is to provide our clients with candidates who bring foundational skills required for success in the role while remaining open to where these skills may have been developed and mindful of the realities of transitioning from the for-profit sector to the non-profit sector. “Many boards and non-profit leaders value business acumen and management skills honed in the private sector and then deeply assess whether candidates can effectively apply those skills in a non-profit setting,” she said.

“The not-for-profit sector has been very active in executive search in 2024,” said Malcolm Duncan, global practice leader for Kestria’s NGO & not for profit practice group. “Like any sector, it is driven by the need to maximize impact, secure funding, and engage effectively with all stakeholders, from volunteers to government. In the Australian market, we have been particularly active in three key areas: aged care, childcare, and disability services. Each of these areas faces funding pressures and regulatory changes, requiring leadership that can identify opportunities for growth, including merger and acquisition activity.”

Mr. Duncan also notes that the not-for-profit sector is attractive to senior executives from commercial backgrounds as they bring valuable skills and experience while finding greater meaning and purpose in their careers. “Historically, commercial executives transitioned to the not-for-profit sector at the end of their careers to give back,” he said. “This has changed, with individuals now seeking careers that align with their values earlier on, especially those with skills in M&A, digital marketing, and operational leadership.”

“When we present candidates for leadership roles and board positions in the non-profit sector, they come from both not-for- profit and commercial backgrounds,” Mr. Duncan says. “A key characteristic we look for is evidence of their experience and commitment to the sector, such as volunteer work or serving on a non-profit board. Leadership in a not-for-profit setting is increasingly complex and requires resilience and the ability to engage with a diverse mix of stakeholders. Running a large, complex not-for-profit is no different from running a bank.”

Managing Volunteer Engagement

In 2024, Mr. Duncan explains that the not-for-profit sector faces several challenges. “The primary challenge is workforce-related: attracting and retaining skilled staff, while managing volunteer engagement amid a decline in volunteering,” he said. “To address this, not-for-profits are seeking innovative marketing and outreach strategies. This occurs against a backdrop of government funding constraints and a significant decrease in donations due to economic uncertainty. Not-for-profits are also leveraging technology to gain attention in Australia. Additionally, significant regulatory changes in areas like childcare and aged care, along with increased compliance requirements, are straining already scarce resources.”

“The ongoing trend of long-time leaders stepping down continues to impact non-profits,” Ms. Brennan says. “We’re seeing a sea change in leadership, with a new crop of leaders taking a seat at the table.
I think non-profits will be challenged when it comes to ensuring
that these leaders are successful and investing in the supports they need in order to grow with the organizations they are now leading.”

“Overall, we’ve seen growth in the field of non-profit executive search through the years,” said Mike English, vice president for search strategies and senior search consultant with The Moran Company. “More organizations and associations are recognizing the worthwhile investment of partnering with a professional firm to attract talented leaders who can positively impact their missions.”

In many cases, Mr. English explains that senior executives looking to steer away from the for-profit sector are individuals who have already demonstrated a commitment to service through volunteer work or serving on a board. “These experiences can spark an interest in making a career transition into the non-profit sector,” he said. “When expectations and skills align, non-profit leadership can be a way to blend their professional strengths with their personal passions.”