Recruiting Purpose-Driven Leaders with an Eye on the Bottom Line
August 5, 2024 – Johnny, what are some challenges facing non-profits today?
Financial challenges and their cascading consequences within the non-profit sector are nothing new. Apart from those with significant endowments, organizations are exceedingly dependent on charitable giving and private and government grants. Not all organizations benefit equally from thriving financial markets; in fact, many without considerable investments or access to high-net-worth individual philanthropists suffer. For several years, the threat of a recession has hindered nonprofit organizations’ revenue generation, and otherwise reliable funding sources are now moving targets — will the funding come in, and if so, how much? Layer on the decline in charitable giving by individuals, which makes up more than 67 percent of all philanthropy in the U.S. and upwards of 85 percent when you factor in family foundations. On a macro level, charitable giving in the U.S. increased by 1.9 percent to more than $557 billion in 2023 compared to a year earlier, according to the Giving USA 2024 Report.
Any other challenges you’d like to mention?
Another challenge unique to this post-pandemic era for non-profits is the drying up of PPP dollars that organizations received during the pandemic. Years on, those funds have been spent down. This latest fiscal year has ostensibly been the first without an abundance of resources that previously allowed organizations to invest confidently in their infrastructure and strategic growth, contributing to a pullback in spending and longer-term forecasting in an otherwise uncertain philanthropic landscape.
How has this affected hiring?
Hiring is often the first line item on the chopping block at the slightest hint of revenue uncertainty. The narrative inevitably shifts to some version of “how can we get more done with the same number or fewer people?” It’s the first thing many consider and the last thing people should. We learned coming out of the great recession that the organizations that held onto their people weath- ered the storm, and those that didn’t more likely failed to recover. As far as organizations tightening their belts, many of our clients are simply being more cautious and planful about their decisions. We have begun to notice a trend in developing new business that organizations, many of which understand the value proposition that a search firm brings to the table, are taking longer to make hiring decisions, making an effort to go it alone before engaging a firm to lead their recruitment, and in some cases, hitting the pause button to see what things look like after November. Bigger picture, the talent market continues to prove incredibly competitive, particularly with contributed and earned revenue-generating positions, including executive leadership, nearly half of whom were recruited for or considered roles outside the non-profit sector according to a 2023 career and salary survey conducted by AASP, Lindauer, and BWF. Generationally, a considerable population of long-time leaders have begun or are preparing to retire. Anecdotally, there appear to be more open positions requiring highly skilled fundraisers and leaders than qualified candidates poised to fill those roles, which makes them highly sought after. It is a candidate’s market.
Does it take longer to fill senior roles for non-profits?
We have not experienced a protraction in filling senior roles. Once we are awarded a search, there is no time to lose. We must toe the line between managing an efficient process and ensuring it is exhaustive, mitigating the risk of losing candidates at every turn. This is our experience, and I cannot speak for our peers or our client’s experiences with other firms.
Can you discuss your firm’s approach to filling senior positions?
The Cooper Coleman approach to filling senior positions is centered around the respect and dignity of our candidates. We take an eyes- wide-open approach to engaging with candidates and representing them to our clients. The trust we build through transparency and intentionally managing expectations is a hallmark of our client and candidate experience and something to which I attribute our rate of successful, longer-term placements. We are exhaustive in our vetting of candidates, we meet them in person wherever possible, and we present an exceedingly comprehensive profile of each candidate so our clients make well-informed decisions on who to advance. The “getting to know you” part is effectively out of the way and their earliest interactions with candidates are substantive and engaging out of the gate. The quality of the skills match, and cultural alignment between our finalists and the client’s expectations tends to be highest when we do the upfront work that doesn’t necessarily scale.
Is the line becoming blurred as companies non-profit organizations weigh the benefits of recruiting purpose-driven leaders and maintaining the bottom line?
Recruiting purpose-driven leaders into a nonprofit context is inextricably linked to the bottom line. The challenge for many non-profits is clearly defining what that bottom line is for a given organization and its stakeholders. Mission and purpose are foundational components of a successful non-profit organization. From our perspective, there is no maintaining the bottom line without evident mission alignment and purpose-driven leadership underpinning a leader’s and their organization’s every strategic move.
