Platt Perspective on Business and Technology

Leading a nonprofit 2: who a nonprofit leader works with

Posted in career development, job search and career development, nonprofits by Timothy Platt on October 23, 2012

This is my second installment in a new series on leading a nonprofit (see Part 1: comparing for-profits and nonprofits and putting nonprofits in a business perspective.)

My goal in this series is not to recapitulate my already ongoing discussion of leadership and executive level management in general. It is to focus in on leading nonprofits as a very particular type of organization, with the specific challenges and opportunities that involves. So I began in Part 1 with a brief orienting look at what a nonprofit is in comparison with a for-profit business. I turn here to consider the people who work at and are affected by or involved with nonprofits. Leaders lead and managers manage and part of what makes nonprofits distinctive and worthy of separate discussion is in the people who comprise and support it. So I begin this posting with a listing of the cast of characters.

Employees: Nonprofits by their very nature need to maintain minimum staffing headcount in order to be able to devote as much of their incoming revenue stream as possible towards their mission. The basic reason for limiting headcount is very simple – reduction of personnel-related expenses. That, I add, includes costs of obtaining and maintaining office space and office equipment and other fixed operating expenses too, that scale up with increased headcount. So savings here from limiting headcount are not in any way limited to just payroll and benefits, and direct personnel expenses. Though individual employee compensation packages also tend to be lower than would be expected on average for similar positions held in the for-profit sector, and certainly when compared to packages offered by businesses in highly competitive industries.

So nonprofits tend to attract people as employees who are comfortable assuming multiple responsibilities – wearing several or even many professional hats to help get everything done. And they tend to attract people who would settle for lower salary and benefits than they might be able to make elsewhere. And the trade-off for them is that employment at the nonprofit allows them to more directly and personally support its mission. Employees tend to be strongly nonprofit mission oriented, and many are idealists in this and very dedicated to this, their cause.

This obviously affects corporate culture. But it also impacts on business processes and practices as fewer people are each doing more things and that means fewer employee to employee hand-offs as multiple-task processes are carried through upon.

Managers and Administrators: Nonprofits tend to have fewer managers, and flatter tables of organization. And one consequence of minimal headcount and I add minimal headcount expansion when that takes place is that the only real path to advancement to a higher position on the table of organization can be in moving from one nonprofit to another, to take a position there at that next level up. So more senior, experienced managers and leaders frequently have backgrounds in several or even many nonprofits and experience working in a variety of systems and in support of a diversity of missions.

And one consequence is that executive managers have to be aware of and watch out for candidates to management position who arrive knowing exactly what to say to land a job but who are only seeking it as a stepping stone to a still higher position elsewhere. These managers tend to be personal empire builders with a focus on developing bullet points for their resume. And that can be beneficial to the nonprofit short-term, but be less so when longer term planning and needs are considered.

Boards of Directors: Most for-profits have small, lean boards. Nonprofits tend to have huge boards, and board membership frequently comes with an admissions fee in the form of a requirement that board members be major donors too. Nonprofit board members advise the chief executive officer and carry out all of the more usual board functions, with much of this carried out by committees and smaller groups of board members and certainly for the detail work that is involved. But every board member has an ongoing responsibility to fundraise and to promote their nonprofit and market it. And nonprofit board members tend to be passionate about their nonprofit’s mission – true believers and insistent that the mission be pursued. An effective nonprofit chief executive officer works with and cultivates board members and helps to recruit them into this activity and in support of their cause.

Donors: And setting aside grant support, which can at times include governmental subsidy, all incoming revenue comes into a nonprofit through charitable donations. They might be tax deductible for those who donate but the overall pool of charitable donation funds is always limited and even in good years. So the competition between nonprofits for attracting donors to their cause is severe. And one of a nonprofit leader’s principle roles is as spokesperson for their organization’s mission and its fundraising – and certainly through cultivating and working with major potential donors.

People Directly Served by the Nonprofit and its Mission: Nonprofits have missions and those missions address real-world problems and challenges faced by real people. This might mean helping children who need certain types of special surgery (e.g. to correct cleft lips), providing third world communities with safe sources of drinking water or meeting essentially any personal or community need where outside support could make the difference. The chief executive officer of a nonprofit is certainly one of the principle voices and faces for their organization and for its dedication to its mission – and even when that nonprofit also brings in and benefits from celebrity endorsers and spokespersons.

The Press: Every business or organization that seeks to function as a public presence has to be at least aware of the press and of news coverage. Any nonprofit of any scale is going to have at least something of a marketing and communications capability, and staff and management that focuses on that. But the chief executive officer also plays a role in this, and as a public face and voice, and spokesperson.

These are the principle groups and constituencies that a nonprofit’s leader has to be aware of, oriented towards and supportive of, and responsive toward. And one of the core objectives of the senior executive staff is to contribute their functional and departmental expertise and support to the organization in ways that enable their leader in doing that.

I am going to look in greater depth at nonprofit missions, visions and corporate cultures in my next series installment. Meanwhile, you can find this and related postings at my Guide to Effective Job Search and Career Development – 2. I have also posted extensively on jobs and careers-related topics in my first Guide directory page on Job Search and Career Development. You can also find this and related postings at Nonprofits and Social Networking.

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