The not-for-profit sector is attracting top executives in increasingly large numbers. Once viewed as not quite kosher or merely offering cushy jobs for retiring CEOs, NFP is increasingly big business in search of talented and innovative executives.
Lodged between private industry and public sector the NFP, or third sector as it is otherwise known, is emerging as one of the country’s best-hidden pathways to top management career. NFPs have been attracting top-flight people for some time. But the sector’s higher profile is driving the message through to the business community. The defining point has been NFPs’ migration from advocacy into the service provision game. This means more money and greater governance.
Charities and other NFPs operating at community level, continue to fashion most people’s perception of the sector. What’s commonly overlooked is the quantum-leap experienced by leading charities and other member organisations over the past 10 years. Core values remain the same, what’s changed is the order of magnitude.
The sheer size of our NFP heavyweights, the dollar amounts they raise and the annual budgets they administer has forced them to emulate traditional corporate structures. The distinction between the way leading NFPs and their private enterprise counterparts operate is becoming relatively seamless. At least that’s the impression of Adam Laidlaw, CEO with the Christian Children’s Fund (CCF), an overseas aid and development organisation with around $9 million in annual revenue.
Hard-nosed business
New Zealand has more registered charities per capita than any other country. And that means the art of raising funds, arranging corporate sponsorships, and lobbying has become hard-nosed business, according to Laidlaw. “There are long-term career paths developing in this sector, but this wasn’t always the case. Once these organisations find themselves with annual revenues over the $1 million mark, they’re forced to start operating like any other business. Finding CEO with philosophical commitment to the cause is just one requirement. More than ever, NFP boards look for key commercial skills.”
It’s become de rigueur for leading NFPs to engage executive recruiters to headhunt people with specialist skills. Having grown-up in the local and UK NFP sectors, Laidlaw has witnessed the increasing sophistication of NFPs over the past 10 years.
“As far back as the early 1990s, NFPs were reluctant in their dealings with business. Conveying relevancy to the corporate sector was an issue. It’s easier now to deal direct with the large corporates because NFPs are themselves running multimillion dollar businesses with highly developed corporate structures.”
Making difference
Jan Dowland, CEO with health disability provider IHC, believes commercial organisations can now learn from the way NFPs manage shareholders’ interests, IT and their strategic approach to HR management and training. “We are no longer the private sector’s poor cousin,” she says.
A former accountant, Dowland was shoulder-tapped to join IHC seven years ago through the consulting work performed with her former employer Ernst & Young. “I recall Ernst & Young directors rationalising my decision as better lifestyle option. In reality, it was more legitimate career choice. Money wasn’t an issue. My salary was benchmarked in the mid quartile for an organisation of this size. What attracted me was being part of values-based organisation where I could make difference.”
Now in her fifth year as IHC’s CEO, Dowland is responsible for running $150-million operation with 5000 employees, 3000 of them fulltime. Annual donations account for around $7 million with remaining funds coming via government contracts and user charges. Being the country’s only provider of community and residential-based disability services means the organisation has significant property exposure. With up to 700 homes directly under its ownership, the IHC’s property portfolio is worth around $120 million.
NFPs are generally more money conscious than “for-profits” on two counts:
1. They must raise money and generally have less than they need;
2. They have clear sense of their core business.
“If there is one area where NFPs have it easier, it’s their stronger sense of vision. Outsiders often comment on the commitment of staff. It’s critical we don’t take this for granted. In IHC I soon realised how important it is to manage relationships, which is why management and leadership skills are critical,” says Dowland.
Career development
IHC employs 26 area managers, each controlling multimillion dollar budgets. Managers are attracted by the opportunities to tackle wider range of management functions early in their careers. “Our willingness to let managers step-up to the plate, sends clear message that we’re providing an opportunity for both personal and career development. We expect these managers to have financial skills, but much of that can be taught. More important is the ability to manage relationships and become the face of the organisation in the community.”
Dowland concedes that the perception that NFP jobs aren’t “real” occupations lingers on. But the flood of enquiries and applications for positions within the sector suggests the perception is changing. She recently advertised for general manager and received around 90 enquiries and 50 applications. There’s more demand for the top jobs. Helen Green was one of over 200 applicants to compete for World Vision’s top job year ago. When the organisation searched for its former executive director seven years ago only six applicants applied. “There’s perception that overseas aid simply throws money into black hole, so you don’t have to be too business like. But when you’re managing other people’s money, you need to be even more professional,” says Green.
Commitment is key
The NFP sector may be attracting better people but, says Green, it is important that they don’t come in on dream. Good people won’t stay with an NFP if the organisation doesn’t put anything on the table apart from dollars. World Vision has just recruited two key people from the private sector to provide expertise in critical areas. They are well paid jobs but not as well paid as the private sector.
“Many people will take job within the NFP sector on the pretext they can make difference in an area they’re passionate about. If I didn’t have sense of commitment, I don’t know that I could stick it – it isn’t easy,” says Green.
Former agricultural scientist, Bruce Waldin was prepared to take 15 percent salary hit when he joined World Vision as marketing director three years ago. former marketing manager of NRM, an $80-million animal feed subsidiary of Tegel Foods, Waldin was lured out of animal health nutrition by the opportunity to apply new marketing tricks in much broader context.
Career incubator
Waldin thinks he’s typical of many marketing professionals who now view the NFP sector as potent career incubator. Marketers are prepared to trade short-term gains for fast-track career development through hands-on exposure to wider marketing mix. But, says Waldin, while skills learnt within an NFP generally transpose back into the private sector, the opposite isn’t always true.
World Vision’s board wanted marketing director who could transform the organisation from its ‘mission do-good’ approach. That meant bringing disparate PR and marketing efforts within campaign.
“The days of simply asking for annual donations are gone. Fundraising is business and takes lot of planning. It’s all about relating to people and developing the right relationships, through corporate sponsorships or co-branding,” says Walden.
Aligning values
Two factors help align private enterprise values with those of the NFP sector, according to Plunket’s CEO Paul Baigent. They are:
• greater emphasis by corporations on the triple bottom-line;
• Concerted efforts by Government to
