from non-profit to for profit and back again
TRANSCRIPT
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?