From Non-Profit to For Profit and Back Again


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From Non-Profit to For Profit and Back Again

  1. 1. From Non-Profits to For-Profits and Back Again Ken Toren Nova Connect November 10, 2009
  2. 2. Agenda <ul><li>Thinking about or interested in transitioning from the FP world to NP world (or vice versa) </li></ul><ul><li>Real experiences – from me and you </li></ul><ul><li>Opportunities to consider </li></ul><ul><li>Identify ways to re-brand yourself </li></ul><ul><li>Tips for success </li></ul>
  3. 3. About Me <ul><li>Serial Entrepreneur </li></ul><ul><li>CEO/co-founder of 5 software start-ups </li></ul><ul><li>Raised $20m from VCs, investors </li></ul><ul><li>M&A </li></ul><ul><li>20+ years in marketing, sales, BD for publics, privates and non-profits </li></ul><ul><li>High-tech, healthcare, consulting </li></ul><ul><li>Raised $200m for non-profits </li></ul><ul><li>Business advisor, Board Member </li></ul>
  4. 4. My Story <ul><li>NP for 16 years…then to FP = computer telephony integration company as Dir of Marketing!? </li></ul><ul><li>Made transition to FP by emphasizing related experience: promotion of consumer services, press relations, marcom, events, writing, new service roll-outs </li></ul><ul><li>Understanding of technology and business language (channels, MRD, specs, etc) were barriers </li></ul><ul><li>Then went from fund raising to fund raising – a great skill </li></ul><ul><li>Easier to go “back and forth” based on opportunities – as staff, volunteer, consultant = flexibility and opportunistic! </li></ul><ul><li>Still some “discrimination”…but…not so much now </li></ul>
  5. 5. Is Non-Profit Right for You? <ul><li>Why do you want to do this anyway? </li></ul><ul><li>Are you motivated by the desire to fulfill a lifetime passion, or to make a difference? </li></ul><ul><li>Which aspects of the non-profit sector are you passionate about and/or most interested in? </li></ul><ul><ul><li>Are you interested in arts and culture, the environment, or international development… </li></ul></ul>
  6. 6. NP = Qualities That Count <ul><li>Adapt to the culture of non-profits </li></ul><ul><li>Ability to align resources against an organization’s mission to achieve results </li></ul><ul><li>Bottom line orientation–how to serve clients in the most cost effective manner possible </li></ul><ul><li>There’s a huge need for communication and consensus-building skills </li></ul><ul><li>Employee empowerment factors are key to success </li></ul><ul><li>Command-and-control won’t work </li></ul>
  7. 7. Your Non-Profit Resume <ul><li>NP focus - their mission as opposed to profits </li></ul><ul><li>Flexibility, concern for others, dealing with change, analytical and leadership </li></ul><ul><li>Recruiters want to see: ability to relate to different constituent groups, solve problems, empathy for others, openness to change, passion </li></ul><ul><li>Highlight non-profit experiences prominently on your résumé – section called “Community Leadership” or Volunteer Experience </li></ul><ul><li>Use language that is appropriate to the non-profit sector </li></ul><ul><ul><li>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.) </li></ul></ul><ul><ul><li>Avoid business jargon and industry slang </li></ul></ul><ul><li>Focus on who you are as an individual and less on what you have done - humanity </li></ul>
  8. 8. Peanuts? <ul><li>Don’t assume that all NPs pay peanuts </li></ul><ul><li>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 </li></ul><ul><li>Likewise, fundraising or development positions may also pay more than other non-profit jobs, as the ability to raise funds is prized by all </li></ul><ul><li>The Chronicle of Philanthropy reported in 9/09 that… </li></ul><ul><ul><li>the median compensation for chief executives at the nation's biggest nonprofit organizations climbed 7% to $361,538 </li></ul></ul><ul><ul><li>2/3 of nonprofits maintained or increased compensations for top execs </li></ul></ul><ul><ul><li>Nonprofit CEOs didn't feel the economic pinch in 2008 despite charitable giving having declined for the first time since 1987. </li></ul></ul><ul><ul><li>Nonprofit hospitals have the highest median CEO - $830,000+ </li></ul></ul><ul><ul><li>Many have come from “industry” </li></ul></ul>
  9. 9. Very High
  10. 10. Second Life <ul><li>Non-profits growing faster than business or government sector–and facing a shortage of talent. </li></ul><ul><ul><li>Sector will need to hire 640,000 new senior managers by 2016, according to Bridgespan Group </li></ul></ul><ul><li>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. </li></ul><ul><li>The MetLife Foundation and Civic Ventures reported in June that a big shift is already is underway: </li></ul><ul><ul><li>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 </li></ul></ul><ul><ul><li>Non-profits are worried about finding top talent as they grow; 42% see recruiting and hiring as #1 </li></ul></ul><ul><ul><li>40%, seem to like candidates who’ve switched to non-profits from the business world </li></ul></ul><ul><ul><li>Nearly 70% say encore workers bring valuable experience to non-profits </li></ul></ul><ul><li>NP = looming leadership deficit </li></ul><ul><ul><li>older boomers leaving to retire or simply to do something new - so there will +++ positions to fill </li></ul></ul>
  11. 11. Some NP Minuses <ul><li>Mission, not profit, is the driving force – not for everyone </li></ul><ul><li>Quarterly focus on revenues and profits, which characterize the business sector, doesn’t necessarily define success </li></ul><ul><li>If you continually succeeded based on profit margin, there would need to be an adjustment as to how to measure success </li></ul><ul><li>Non-profits are typically resource constrained - impact on management’s ability to implement change as well as increase compensation </li></ul><ul><li>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 </li></ul><ul><li>NO EQUITY, PROFIT SHARING, STOCK!!! </li></ul><ul><li>Very process oriented and consensus driven, both of which can slow decision making - frustrating if you are used to well-defined structure </li></ul>
  12. 12. Some NP Pluses <ul><li>Opportunity to interact with government, corporate, and community </li></ul><ul><li>Nonprofits offer flexible working conditions/environment </li></ul><ul><ul><li>leaps and bounds ahead of corporate America - flexible scheduling, job sharing, telecommuting, leaves of absence, and health benefits </li></ul></ul><ul><ul><li>NPs attract bright individuals who are passionate and committed to their cause </li></ul></ul><ul><ul><ul><li>wish to make a difference in the world </li></ul></ul></ul><ul><ul><ul><li>believe in the direction of their organization </li></ul></ul></ul><ul><ul><ul><li>have a lifelong passion for the group’s work </li></ul></ul></ul>
  13. 13. Be Aware… <ul><li>Barrier - unwillingness of many nonprofits to take a chance with a for-profit person. </li></ul><ul><li>Nonprofits know that there is a different culture in their organizations than in FPs </li></ul><ul><li>Some people in FPs may assume that they can come in and quickly make changes - alienating staff, donors, board members and bosses. </li></ul><ul><li>And you know, sometimes there's a certain arrogance that comes from the for-profit sector. </li></ul><ul><li>  </li></ul>
  14. 14. But, NPs changing… <ul><li>Business = profits, ROI, stock </li></ul><ul><li>NPs = break even, but profits can be made and applied to program/services </li></ul><ul><li>Bonuses, MBOs, etc exist </li></ul><ul><li>Basic functions the same – financial, operations, etc </li></ul><ul><li>Personnel (Board and Committees) and Governance </li></ul><ul><li>Language is getting more common: competition, market share, value prop, business plan (big one!), scalability, global footprint, go-to-marketing, validation, etc </li></ul><ul><li>Many “mission” based businesses today – do good and make money too! = Venture Philanthropy/Social Ventures </li></ul>
  15. 15. Hot Areas <ul><li>Healthcare – Hospitals, senior services, disease (cancer, neurology, etc) - $$$$ </li></ul><ul><li>At Risk Youth </li></ul><ul><li>Community Foundations - $$$ </li></ul><ul><li>Private Foundations - $$$$ </li></ul><ul><li>Academic – community colleges </li></ul><ul><li>Environment – Clean and Green </li></ul>
  16. 16. NP Resources/Ideas <ul><li>Craigslist – of course </li></ul><ul><li>LinkedIn – of course </li></ul><ul><li> Center </li></ul><ul><li>Philanthropy. Com – Chronicle of Philanthropy </li></ul><ul><li>Bridgestar </li></ul><ul><li>Idealist </li></ul><ul><li>Friends serving on boards of non-profits can be a great networking tool </li></ul><ul><li>Think about your alumni association or your university’s career resources. </li></ul><ul><li>Only 10% of non-profit openings are posted on any of the online job boards </li></ul><ul><li>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 </li></ul><ul><li>More than 230 colleges and universities across the United States offer courses in non-profit management , up from 179 not long ago </li></ul>
  17. 17. Volunteer! <ul><li>It’s a good thing to do…period </li></ul><ul><li>Keeps you sharp, on target, networked </li></ul><ul><li>Serve on Boards, etc in areas that are transferable </li></ul><ul><ul><li>you can learn the business from the inside out </li></ul></ul><ul><ul><li>allows you to build repertoire of NP accomplishments </li></ul></ul><ul><ul><li>broadens your network of non-profit colleagues and peers, increases your chances of getting a job in sector </li></ul></ul><ul><li>From Volunteer to Pro (and vice versa) is common </li></ul>
  18. 18. Is For Profit Right For You? <ul><li>Why do you want to do this anyway? </li></ul><ul><li>Looking for faster pace, cutting edge, etc? </li></ul><ul><li>Which aspects of the FP sector are you passionate about and/or most interested in? </li></ul><ul><ul><li>Products, services, varied/specific customer base, etc, </li></ul></ul><ul><li>Is compensation, profits a driving force? </li></ul><ul><li>Do you like the bottom-line focus? </li></ul><ul><li>Are you more product or “thing” based? </li></ul><ul><li>Does mission matter? </li></ul>
  19. 19. NP to FP <ul><li>Less barriers now </li></ul><ul><li>Emphasize accomplishments – financial, “sales” (clients served, etc), satisfaction, marketing success </li></ul><ul><li>Now use business language </li></ul><ul><li>Mission-based businesses – best of both worlds </li></ul>
  20. 20. Transferable Skills Both Ways <ul><li>“ Sales” = fund raising! </li></ul><ul><li>Marketing = very, very, very needed (but do NPs do it?) </li></ul><ul><li>Finances = same </li></ul><ul><li>Technology !!! – many NPs are in process; grant $$ available (CARE, etc) </li></ul><ul><li>Internet Strategies/Tactics – social networking, blogs, etc </li></ul><ul><ul><li>needed by all </li></ul></ul><ul><li>Product/Program Marketing and management/CS = Program and Service Delivery </li></ul>
  21. 21. New Opportunity! <ul><li>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% </li></ul><ul><li>Globally, this number is estimated at over $20 billion, but represents just 3.4% of all giving; most money is still donated offline </li></ul><ul><li>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 </li></ul><ul><li>Blogs, social networks, media, ads, etc </li></ul><ul><li>Blend of technology, NP, FP, meeting needs </li></ul>
  22. 22. The Business of Online Giving <ul><li>2008 (2000 respondents) to a national study… </li></ul><ul><li>2008 was terrible…but…total online fundraising giving was up 26% over 2007 </li></ul><ul><li>Total number of online donations was up 43% in 2008 </li></ul><ul><li>December and June were the two largest months for online giving </li></ul><ul><li>December accounted for 48% of the total dollars raised </li></ul><ul><li>Online giving in Dec 2008 quadrupled in size compared to prior months </li></ul><ul><li>Average online gift for the month of December of $248.82 </li></ul><ul><li>Average online gift of $152.12 in 2008 </li></ul><ul><li>Education, healthcare, faith-based, and foundations were highest </li></ul><ul><li>Moving into 2009, the nonprofits that concentrate their efforts on their existing donor base and leverage integrated marketing efforts will do better job raising $$ </li></ul>
  23. 23. Obama 2.0 <ul><li>Barack Obama raised $500M+ online in his 21-month campaign, dramatically ushering in a new digital era in presidential fundraising. </li></ul><ul><li>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. </li></ul><ul><li>More… </li></ul>
  24. 24. Think Different <ul><li>I can't understand why people are frightened of new ideas. </li></ul><ul><li>I'm frightened of the old ones. </li></ul>
  25. 25. Unwritten Rules <ul><li>“ Swanson’s Unwritten Rules of Management” - William Swanson, CEO of Raytheon: </li></ul><ul><li>Look for what is missing; few can see what isn’t there. </li></ul><ul><li>We remember 1/3 of what we read,1/2 what people tell us, and 100% of what we feel. </li></ul><ul><li>When in charge, be in charge. </li></ul><ul><li>If you are not criticized, you may not be doing much. </li></ul><ul><li>Be a good starter and a better finisher. </li></ul><ul><li>Tell a great Elevator Pitch. </li></ul><ul><li>Have fun. </li></ul><ul><li>Face fear, try something new – an amateur built the ark; pros built the titanic. </li></ul>
  26. 26. Now, go for it <ul><li>You are not a cog. </li></ul><ul><li>You're creative and a valuable asset to your family and your community. A person who can make a difference to an organization. </li></ul><ul><li>You are capable of having an impact, leaving a legacy, creating things that are outstanding. </li></ul><ul><li>You are not ordinary. </li></ul><ul><li>In fact, you're remarkable. </li></ul><ul><li>Now, hurry. Don't let yourself (and the rest of us) down. </li></ul>
  27. 27. It’s only the beginning… <ul><li>You miss 100% of the shots you never take. </li></ul><ul><li>Any questions? </li></ul>