When speaking with CFOs who are approaching the midpoint or latter stages of their careers, I often hear the desire to find more meaning in their work beyond what they’re getting in their current roles.
This sometimes leads to a discussion about the possibility of joining a nonprofit organization, either as a financial leader or CEO.
At first, it seems like a great idea. Taking 20 to 30 years of corporate experience and applying it to achieving an organization’s mission of doing some good in the world is quite appealing. And objectively, one can see how an accomplished CFO could make a significant impact.
The transition is possible, and I’ve seen many senior financial executives make it successfully. But it’s not without its challenges.
The work cultures in for-profit and nonprofit organizations, even large complex nonprofits like universities and health systems, are often quite different. As such, a CFO may be required to work and lead in a much different manner than what brought them success during their career.
When I hear an executive seriously consider this type of career change, I suggest that they answer the following questions.
What are you in it for? It’s been my experience that the best transitions happen when you truly believe in the mission. First, you’re more likely to throw everything you have into the work. Second, being a nonprofit leader isn’t easy, particularly in an environment that’s not terribly well-funded, and where a small problem can quickly become an existential crisis.
Is your retirement funded? Most likely, you aren’t going to significantly increase your nest egg by taking on a nonprofit leadership role (although your health-care coverage may actually be better). It’s not unusual to see a big-company CFO take a 50% pay cut when taking on a role like this.
If working in a mission-driven organization is important to you, you may need to plan for it the same way you’d plan for retirement.
Are you ready to be hands-on? I guarantee that you will be doing things for yourself that you may not have needed to for many years. Smaller and less-capable staffs, out-of-date technologies, and fewer resources overall will require you to be just as tactical as you are strategic.
Can you work with non-business leaders? If you take on a role at a foundation, museum, or health-care institution, you will find yourself working with some of the best minds in the world. You may also find yourself having to manage the expectations of leaders who have little understanding of how their work is funded.
The best nonprofit CFOs I know have the ability to meet these amazing people “where they are” in terms of business understanding, impart knowledge, and gain commitment. But it’s a painstaking, delicate exercise.
Do you understand nonprofit board dynamics? Financial officers often find nonprofit boards much more difficult to manage. Sometimes, board members forget that their role is primarily governance and start to act like they are part of the management team.
At the same time, a well-meaning but unsophisticated donor may have some pretty-far-out-there strategy ideas that need to be heard, given the importance of their philanthropy (especially if budgets are tight).
Your questions may be different depending on your motivations, but these could be a good place to start. Based on my experience, how you answer the first one is the most important. If you are passionate about the organization’s mission, it makes the challenges of transitioning from for-profit to nonprofit much more manageable.
One more piece of advice: if you think this position will be an easy segue into retirement, then just retire. These are not “put your feet up on the table” type of jobs. You will find yourself working as hard, or harder, than you are in your current role.
If you’re looking to ease off a bit, serving on a nonprofit’s board may be a less stressful way to satisfy your desire to give back. But if you’re up for it, most nonprofits can benefit greatly from the skills and experiences that a business leader can bring to achieving their mission.
John Touey is a principal at executive search firm Salveson Stetson Group with 20 years of experience providing executive search, human resources, and management consulting services to organizations in the healthcare, financial services, utilities, manufacturing, and pharmaceutical industries. Follow him @JohnTouey.