From Non-Profits to For-Profits and Back Again

Ken Toren

Nova Connect

November 10, 2009

Agenda

• Thinking about or interested in transitioning from the FP world to NP world (or vice versa)

• Real experiences – from me and you• Opportunities to consider• Identify ways to re-brand yourself • Tips for success

About Me• Serial Entrepreneur

• CEO/co-founder of 5 software start-ups

• Raised $20m from VCs, investors

• M&A

• 20+ years in marketing, sales, BD for publics, privates and non-profits

• High-tech, healthcare, consulting

• Raised $200m for non-profits

• Business advisor, Board Member

My Story

• NP for 16 years…then to FP = computer telephony integration company as Dir of Marketing!?

• Made transition to FP by emphasizing related experience: promotion of consumer services, press relations, marcom, events, writing, new service roll-outs

• Understanding of technology and business language (channels, MRD, specs, etc) were barriers

• Then went from fund raising to fund raising – a great skill• Easier to go “back and forth” based on opportunities – as

staff, volunteer, consultant = flexibility and opportunistic!• Still some “discrimination”…but…not so much now

Is Non-Profit Right for You?

• Why do you want to do this anyway?

• Are you motivated by the desire to fulfill a lifetime passion, or to make a difference?

• Which aspects of the non-profit sector are you passionate about and/or most interested in?– Are you interested in arts and culture, the

environment, or international development…

NP = Qualities That Count

• Adapt to the culture of non-profits• Ability to align resources against an organization’s

mission to achieve results• Bottom line orientation–how to serve clients in the most

cost effective manner possible• There’s a huge need for communication and

consensus-building skills• Employee empowerment factors are key to success• Command-and-control won’t work

Your Non-Profit Resume

• NP focus - their mission as opposed to profits• Flexibility, concern for others, dealing with change, analytical and leadership• Recruiters want to see: ability to relate to different constituent groups, solve problems,

empathy for others, openness to change, passion• Highlight non-profit experiences prominently on your résumé – section called

“Community Leadership” or Volunteer Experience• Use language that is appropriate to the non-profit sector

– If your experience is in high-tech sales and you are seeking a fundraising or development role, focus on your interpersonal and people skills that made you successful in sales (nurturing relationships, communications and presentation skills, proposal writing, etc.)

– Avoid business jargon and industry slang• Focus on who you are as an individual and less on what you have done - humanity

Peanuts?

• Don’t assume that all NPs pay peanuts

• People don’t work at non-profits to become rich, but even the salaries paid mid-level managers at certain non-profits may allow you to live comfortably

• Likewise, fundraising or development positions may also pay more than other non-profit jobs, as the ability to raise funds is prized by all

• The Chronicle of Philanthropy reported in 9/09 that…

– the median compensation for chief executives at the nation's biggest nonprofit organizations climbed 7% to $361,538

– 2/3 of nonprofits maintained or increased compensations for top execs

– Nonprofit CEOs didn't feel the economic pinch in 2008 despite charitable giving having declined for the first time since 1987.

– Nonprofit hospitals have the highest median CEO - $830,000+

– Many have come from “industry”

Very High

Second Life

• Non-profits growing faster than business or government sector–and facing a shortage of talent.

– Sector will need to hire 640,000 new senior managers by 2016, according to Bridgespan Group

• Best of all, the non-profit sector is gradually waking up to the potential of encore career switchers–people who want to move into new lines of work with meaning in the second half of life.

• The MetLife Foundation and Civic Ventures reported in June that a big shift is already is underway:

– About 8.4 million people between 44-70 are doing work that combines income and personal meaning with social impact and 50% of them not already in “encore careers” will do so

– Non-profits are worried about finding top talent as they grow; 42% see recruiting and hiring as #1

– 40%, seem to like candidates who’ve switched to non-profits from the business world

– Nearly 70% say encore workers bring valuable experience to non-profits

• NP = looming leadership deficit

– older boomers leaving to retire or simply to do something new - so there will +++ positions to fill

Some NP Minuses

• Mission, not profit, is the driving force – not for everyone

• Quarterly focus on revenues and profits, which characterize the business sector, doesn’t necessarily define success

• If you continually succeeded based on profit margin, there would need to be an adjustment as to how to measure success

• Non-profits are typically resource constrained - impact on management’s ability to implement change as well as increase compensation

• With fewer income sources, and no margin of profitability, the trickle-down effect on your pay might not be as frequent nor be as lucrative

• NO EQUITY, PROFIT SHARING, STOCK!!!

• Very process oriented and consensus driven, both of which can slow decision making - frustrating if you are used to well-defined structure

Some NP Pluses

• Opportunity to interact with government, corporate, and community

• Nonprofits offer flexible working conditions/environment– leaps and bounds ahead of corporate America - flexible

scheduling, job sharing, telecommuting, leaves of absence, and health benefits

• NPs attract bright individuals who are passionate and committed to their cause

– wish to make a difference in the world– believe in the direction of their organization– have a lifelong passion for the group’s work

Be Aware…

• Barrier - unwillingness of many nonprofits to take a chance with a for-profit person.

• Nonprofits know that there is a different culture in their organizations than in FPs

• Some people in FPs may assume that they can come in and quickly make changes - alienating staff, donors, board members and bosses.

• And you know, sometimes there's a certain arrogance that comes from the for-profit sector.

 

But, NPs changing…• Business = profits, ROI, stock• NPs = break even, but profits can be made and applied to

program/services• Bonuses, MBOs, etc exist• Basic functions the same – financial, operations, etc• Personnel (Board and Committees) and Governance• Language is getting more common: competition, market

share, value prop, business plan (big one!), scalability, global footprint, go-to-marketing, validation, etc

• Many “mission” based businesses today – do good and make money too! = Venture Philanthropy/Social Ventures

Hot Areas

• Healthcare – Hospitals, senior services, disease (cancer, neurology, etc) - $$$$

• At Risk Youth

• Community Foundations - $$$

• Private Foundations - $$$$

• Academic – community colleges

• Environment – Clean and Green

NP Resources/Ideas• Craigslist – of course• LinkedIn – of course• PND.org/Foundation Center• Philanthropy. Com – Chronicle of Philanthropy• Bridgestar• Idealist• Friends serving on boards of non-profits can be a great networking tool• Think about your alumni association or your university’s career resources.• Only 10% of non-profit openings are posted on any of the online job boards• Most non-profit hiring is local; most employers are too small to have funds available

to pay for relocation = makes local P2P networking most important job-hunting tool• More than 230 colleges and universities across the United States offer courses in

non-profit management , up from 179 not long ago

Volunteer!

• It’s a good thing to do…period• Keeps you sharp, on target, networked• Serve on Boards, etc in areas that are transferable

– you can learn the business from the inside out– allows you to build repertoire of NP accomplishments– broadens your network of non-profit colleagues and

peers, increases your chances of getting a job in sector• From Volunteer to Pro (and vice versa) is common

Is For Profit Right For You?

• Why do you want to do this anyway?• Looking for faster pace, cutting edge, etc?• Which aspects of the FP sector are you passionate about and/or

most interested in?– Products, services, varied/specific customer base, etc,

• Is compensation, profits a driving force?• Do you like the bottom-line focus?• Are you more product or “thing” based?• Does mission matter?

NP to FP

• Less barriers now• Emphasize accomplishments – financial, “sales”

(clients served, etc), satisfaction, marketing success• Now use business language• Mission-based businesses – best of both worlds

Transferable Skills Both Ways

• “Sales” = fund raising!• Marketing = very, very, very needed (but do NPs do it?)• Finances = same• Technology !!! – many NPs are in process; grant $$

available (CARE, etc)• Internet Strategies/Tactics – social networking, blogs, etc

– needed by all

• Product/Program Marketing and management/CS = Program and Service Delivery

New Opportunity!

• The last 10 years have seen explosive growth in online giving. In 1999, just $200 million was donated online, but by 2007 that number had reached $10.44 billion in the United States alone – a growth of 5200%

• Globally, this number is estimated at over $20 billion, but represents just 3.4% of all giving; most money is still donated offline

• The millions of online donors may represent a high number of people giving money today, but does not yet account for a significant proportion going to social causes

• Blogs, social networks, media, ads, etc

• Blend of technology, NP, FP, meeting needs

The Business of Online Giving

2008 (2000 respondents) to a national study…

• 2008 was terrible…but…total online fundraising giving was up 26% over 2007

• Total number of online donations was up 43% in 2008

• December and June were the two largest months for online giving

• December accounted for 48% of the total dollars raised

• Online giving in Dec 2008 quadrupled in size compared to prior months

• Average online gift for the month of December of $248.82

• Average online gift of $152.12 in 2008

• Education, healthcare, faith-based, and foundations were highest

• Moving into 2009, the nonprofits that concentrate their efforts on their existing donor base and leverage integrated marketing efforts will do better job raising $$

Obama 2.0

• Barack Obama raised $500M+ online in his 21-month campaign, dramatically ushering in a new digital era in presidential fundraising.

• 3 million donors made a total of 6.5 million donations online adding up to more than $500M. Of the 6.5m, 6m were in increments of $100 or less. The average online donation was $80, and average Obama donor gave more than once.

• More…

Think Different

I can't understand why people are frightened of new ideas.

I'm frightened of the old ones.

Unwritten Rules

“Swanson’s Unwritten Rules of Management” - William Swanson, CEO of Raytheon:

• Look for what is missing; few can see what isn’t there.

• We remember 1/3 of what we read,1/2 what people tell us, and 100% of what we feel.

• When in charge, be in charge.

• If you are not criticized, you may not be doing much.

• Be a good starter and a better finisher.

• Tell a great Elevator Pitch.

• Have fun.

• Face fear, try something new – an amateur built the ark; pros built the titanic.

Now, go for it

• You are not a cog.

• You're creative and a valuable asset to your family and your community. A person who can make a difference to an organization.

• You are capable of having an impact, leaving a legacy, creating things that are outstanding.

• You are not ordinary.

• In fact, you're remarkable.

• Now, hurry. Don't let yourself (and the rest of us) down.

It’s only the beginning…

You miss 100% of the shots you never take.

Any questions?