Finding Financial Leaders for Nonprofits

By Barb Breen

Barb Breen
Growing demand for greater nonprofit accountability—by funders, members, and regulators—coupled with a need to hire more than 600,000 new leaders nationally by 2016 is forcing nonprofits to hire financial executives from outside the sector.

Although the technical and interpersonal skills that enable people to succeed in for-profit organizations also apply to nonprofits, executive directors and their boards should bear in mind a few points when recruiting those candidates:

Think of the for-profit sector as a big market to tap. The leadership deficit is real. According to Bridgestar, the nonprofit sector will need to hire 640,000 leaders between 2006 and 2016. Grooming internal talent makes sense and luring executives from other nonprofits can work, but the number of people needed is too big to rely solely on these approaches. The for-profit sector provides a ready source of potential candidates.

Your organization is unique, but... Many nonprofits tend to believe their situation is unique and complicated. While your situation may indeed be complicated, many organizations outside the sector face similar problems and issues. Chances are the executives you hire will have faced similar circumstances.

A fresh perspective may be just what you need. People who have done well in the for-profit sector succeeded because they know how to adapt to change and solve problems. They may need to learn a new vocabulary—to talk about funders instead of investors, and outcomes instead of results—but they’ll figure it out.

Focus on the big picture. If you need to hire a chief financial officer, don’t worry whether he or she knows the nitty-gritty of nonprofit accounting. The CFO will know how to access the right resources to get the job done.

Questions to Consider

Hiring is never easy, so the better prepared you are, the more likely you’ll land the right person. The following questions should help.

Do you know what type of person you want? This means defining the skills that the successful candidate will need to help your nonprofit do well today...and take it to the next level.

Does the candidate know why he or she wants to join a nonprofit? Simply seeking a change or “wanting to give back” is not enough. Nonprofits are under pressure to deliver on their mission. The candidate needs to clearly understand how he or she will help your organization meet its goals.

Does the candidate have a mission-based mindset? For-profits are oriented to markets and aim to satisfy shareholders and owners by making money. Nonprofits are oriented to a cause and seek to make a difference while remaining financially strong. Does the candidate appreciate this?

Is there a good cultural fit between both parties? Financial and management skills are essential, as is a commitment to the nonprofit’s mission, but the candidate also needs to harmonize with your organization’s culture and style.

Can the candidate work with the board? Nonprofit board members sit on the board because they have a passion for the cause, in addition to whatever expertise they provide. Is the candidate fully aware of this and able to educate the board on financial matters as needed?

Resources for Hiring from Outside the Nonprofit Sector

The following resources offer invaluable insight about hiring from outside the nonprofit sector.

Bridging to the Nonprofit Sector—An online portal designed to help private-sector executives understand the nonprofit sector, identify networking opportunities, and position themselves for nonprofit careers.

The Art of Hiring Leaders by Barbara Gilvar—A guide for nonprofit organizations that explains the executive search process, filled with tips and useful advice.

Change Your Career: Transitioning to the Nonprofit Sector by Laura Gassner Otting—A new book packed with advice for hiring managers and nonprofit boards.

Barb Breen, director of the Nonprofit Practice at Accounting Management Solutions, Inc., works with nonprofits on a full range of accounting and financial management issues. Call her at 781-419-9221 or email to