The “Social Sector CEO Trends 2013 Survey” shows that leadership positions in nonprofits and foundations are more and more frequently being filled by candidates transitioning from the private sector. The NonProfit Times reported that “only 1 in 10 respondents transitioned to the CEO role directly from the public sector while 34 percent transitioned from the private sector.” Furthermore, in filling openings on the leadership team, posts in marketing communications/external affairs, human resources, and legal were most likely to be filled by external candidates.
This trend has raised some concerns about the ability of a for-profit executive to lead a nonprofit organization. The top three concerns cited by survey respondents were “unfamiliarity with the culture (57 percent), lack of commitment to the cause (52 percent), and higher compensation requirements (46 percent).” All three concerns can be attributed to a lack of “cultural fit” between private sector candidates and nonprofit organizations; nonprofit leaders want to know that their leadership teams fully understand and are committed to the mission and values of the organization.
This information begs the question, why are nonprofits hiring their executives from outside the nonprofit sector? The reports suggests “either that boards view prior experience in the social or private sector as essential, or that experienced candidates from the public sector may not be applying for nonprofit CEO roles.” It could be further speculated that boards (often made up of for-profit executives) better understand and appreciate private sector experience, or that nonprofit candidates do not have the “generalist experience” that is desired.
It should be noted, though, that these results came from a sample-size of 65 US based non-governmental organizations (NGOs) and foundations. For this survey, “NGOs with budgets greater than $25 million and foundations with assets of more than $150 million were targeted but university and hospital foundations were excluded.” As such, these results should not be considered as demonstrative of a trend across the nonprofit sector without conducting further research.
“Many mid-career private sector execs are yearning to find more meaning in their work and therefore pursuing impact careers in the social sector,” states the report. Nonprofits can benefit from these transitions but, through this process, board members must take care to protect the integrity of their organizations and of the sector as a whole.