Many top executives envision a career change from the for-profit to the charitable sector without fully understanding the shift. The change can be rewarding for the executive and for the charity, but I have seen too many cases where the change has been unsuccessful, which can have costly and even tragic consequences for both the executive and the charity.
I remember the board of a charity hiring a very senior executive from one of the largest banks in the world to succeed me as president. Expectations were great all around, but she was gone in less than a year. Over the years many executives have asked me for advice on making the switch to a charity. What are the issues to consider and what can be done to reduce the risk?
Culture and Fit
The biggest issue tends to be culture and fit. The charitable sector is very diverse, and so individuals need to understand what type of charity and even which charity might be a better fit for them. Individual executives are also very different from one another, and so charities need to determine which individual candidate might be a better fit. An executive search firm with experience with people transitioning from the for-profit to the charitable sector can be very helpful in guiding both the charity and the executive.
A move to a large charity may be the easiest shift from a corporation, but this is not necessarily the case. Charities, even large ones, that are volunteer=based, that have lots of donors, and that are especially mission-driven may have a culture that differs the most from the for-profit sector.
A good way for executives to assess whether the fit might be good for them is to volunteer for different charities. There are many board and non-board roles available.
Volunteers, Donors and Mission
Volunteers are like a workforce; in many charities they make up the largest portion of the workforce. Volunteers are obviously motivated by something other than pay, and they can easily withdraw their services if they become disenchanted with the way a new senior executive interacts with them. Engaging volunteers is often unfamiliar to executives new to the charitable sector. Expenditures considered acceptable for an executive in a corporate setting might alienate volunteers in a charity.
Donors might resemble customers in some ways, but a big difference is that donors are not purchasing a product or service directly. Donors might therefore be considered something more akin to an investor than a customer, except that donors measure return on investment in a very different way than investors in a for-profit entity. Indeed, a contribution to a charity cannot be considered a charitable donation if there is a benefit to the donor, which is key in understanding the differences between donors and both customers and investors.
The motivation of volunteers and donors is often rooted in the mission of the charity. This is also true to a significant degree for employees of charities. An executive envisioning shifting to the charitable sector needs to understand the degree to which the mission drives people. This can vary, and while it may not be possible to generalize by area, charities with strong social, advocacy and environmental mandates might be particularly mission driven. Charities that resemble public institutions and that receive a large percentage of their funding from the government may be less mission driven. In these cases, the culture may resemble more that of government and may require an equally challenging shift for an executive coming from the for-profit sector.
Measures of success in a charity are quite different from those in a for-profit entity even if money is key in both. The mission of a charity translates into some kind of public benefit or public good that can be extremely complicated to define, measure and communicate. Understanding how to measure success in a charity can be a challenge for an executive coming from the for-profit sector, even when comfortable with triple bottom line accounting and corporate social responsibility reporting.
Executives envisioning a career change to a charity may see it as a nice way to finish their professional career, giving something back in a position that is easier than the work they have been carrying out in a for-profit organization. This may be the case, but as often as not they will find themselves on a steep learning curve, struggling to adapt. The politics, governance and decision-making can be complicated, the challenges and problems daunting, the number of relationships almost overwhelming, the workload exhausting, and of course the working conditions and benefits less generous.
The charity may have unrealistic expectations regarding the executive’s ability to fix or save the charity, especially in the short-term. This can set up the incoming executive for failure. While much experience and expertise from a for-profit career is applicable to a charity, some of the approaches may not be applicable. The new executive deserves time, support and coaching to improve the chances for a successful transition.
Work in charities can be rewarding
A career change to the charitable sector is not for everyone, but it can be very successful if well assessed and supported. I know many people for whom their time working for a charity has been the most rewarding part of their career.
Paul Shay has served as the chief executive of four charities and has over thirty-five years experience working and serving as a director and volunteer of many charities.