From the commercial world into not-for-profit
In today’s socially aware world, we see more and more people who are keen to give something back. Over the past couple of years, we have moved several finance professionals from commercial organisations into not-for-profits. We caught up with three of them to find out the good, the bad (and the ugly?) on making the move.
All three had around 10-15 years of experience in commercial organisations. Two of our finance leaders had moved into quite commercial not-for-profits (a music business and a £700 million health business), whilst the third had moved to a London-based arts charity where they were the only business person in a highly creative executive team.
All three leaders have had positive impacts on their respective organisations. The first six months allowed them to gain a solid understanding of the sector and charity, as well as the trust and support of the executive team and their peer group. Across the three of them, they have successfully implemented transformational plans, updated strategies and turned their businesses around from loss-making to quality operations. They have worked hard to inspire their teams to be brilliant at the basics in order to give the organisations solid foundations. Ultimately, they have each added real value to their organisations.
Each have found the goals of the not-for-profit energising when placed alongside the day-to-day demands of the role. Further to this, their experience so far has given them a better understanding of their skillset, broadened their engagement across the businesses, learning things they would not have had the chance to in a purely commercial business.
The jump from the commercial world into not-for-profit is not as large as it may seem, with all three professionals adjusting relatively easily and recommending the move.
Well, maybe not so much the bad rather than the differences that have enhanced our leaders’ skillsets and CV’s.
For example, working in a not-for-profit requires you to keep their goals and aims at the forefront of your decision making. Reputational and regulatory factors must be considered, and leaders must be mindful of the social impact as much as the commercial aspects of decisions. Profits are reinvested and therefore return-on-investment is still important, but for a different reason than ensuring profit for shareholders. For one of our leaders this was more pronounced, as the arts-based organisation were largely subsidised by various funds and were therefore this money was “there to add to the services they provide”, with less regard for the final P&L.
There is an increased emphasis on the paperwork – one has learned to become very efficient at power-reading! They have experienced an increase in the number of meetings and discussions that happen before a decision can be made.
Our arts-based leader found themselves needing to quickly become the commercial “voice of reason” and the talisman for process and control. An emphasis on creativity rather than control can mean that the understanding for strict processes is misunderstood. This led to them also seeing their role becoming much broader than just finance; being the “go-to” person for planning, problem solving, and dealing with issues. This led into the finance team, where finance is still finance. However, finance that is constrained by resources can be pulled into other aspects of the business, gaining a wider, more multi-functional remit. This means that finance is not always prioritised and therefore core functions and systems can be underinvested in.
Surely not. Well, the common view of the market is that often the politics of a charity can derail the proper functioning of the organisation, and in the market people do sometimes leave roles quickly. Of the leaders we spoke with two have not found this, perhaps because their organisations are already commercially astute. The third has found it more of a challenge. Due to the increased number of shareholders in a not-for-profit, and the enhanced public scrutiny, any decisions to change the organisation need to be taken with the full consideration of everyone involved and affected. There is a greater need to bring everyone on the journey, which requires emotional intelligence, plain speaking around financial jargon, and the ability to build relationships at all levels.
Due to how they are financed, some charities are stretched in terms of process and technology and this may present challenges for some to adjust from commercial backgrounds. There are complicated rules around funding and numerous acronyms which need to be learned and understood straight away. However, each of our leaders got to grips with the sector quickly and needed no extra time to adjust than they would moving to another commercial role.
Overall, their interactions and expectations have been challenged more, something they have all learned and benefitted from.
Do be aware that the sector varies massively; and for all those who are making good strides to operate commercially and efficiently, there are some that are more political that can make the move more difficult.
To conclude, all three of our leaders felt the move into not-for-profit had benefitted their career and could see future opportunities for them within the sector. The learning point? A move into not-for-profit is not a career cul-de-sac; it can be a career and life enhancing move.
For more advice on how to make the move, please get in touch with Berwick Partners – our Financial Leadership practice, or for wider roles, our Charity practice.