Business Brain

After I was laid off, I decided to leave the nonprofit sector and try the for-profit sector. Specifically hi-tech.

I had plenty of friends who worked in that sector and they were making great money. Working long hours for sure but at least the pay was great.

I knew going in that my resume was nonprofit heavy and without having spent time in the for-profit sector, I’d have a hard time getting interviews.

A friend helped me and shared my resume with a few companies he consulted for. I got some callbacks.

Prior to interviewing, I knew one question would come up over and over again:

“You worked in the nonprofit sector. What do you know about the business world and about the hi-tech sector?”

I met with the head of HR at a hi-tech company that had about 60-70 employees and was already servicing millions of customers. When she asked me THE question, I was prepared. I said:

“Turn around. Over there is your sales team. Over there is your marketing tam. There’s your PR and comms team. Over there is your content, blog, social media and website team. I did ALL those things as a one-person team and I bet my year over year performance was better than all of them combined.

Sure it’s a different sector but the rules of marketing and communications (the job I was up for) remain the same. Know who your target audience is, know where they hang out, know how and when to engage them and with what value to connect with them.”

I got the job.

Making The Jump

You’ll hear from time to time nonprofit leaders who say that charities should run themselves like a business.

As someone with experience in both worlds, I can say this:

There are definitely things in the business world the nonprofit sector should learn from and adopt. And there are things we should steer clear of.

I agree that it’s hard to make the jump from charity to corporate America. But a lot of that has to do with biases businesses hold towards nonprofits, their work and their workers.

But the jump from business to nonprofit? That seems like no big deal to everyone. We hear stories all the time of former Fortune 500 business execs being hired by nonprofits.

The reason this happens?

• Nonprofits feel that businesses are run like well oiled machines (they’re not. Seriously, they’re not) and therefore bringing on career forprofiteers will help the nonprofit grow and thrive.
• Know who sits on many nonprofit Boards? People from the business sector. Know who has a say in the hiring of C-level executives at nonprofits? The Board. They may be a little biased towards a candidate from the corporate sector.

Is it bad to hire a CEO who spent their career in the business world? Not necessarily. But if the expectation is that the transition will be seamless, well…

Fundraising requires a set of skills and knowledge that some business lifers may not possess. The rules and laws governing nonprofits are different than those in the for profit sector.

There will be a learning curve. And if the Board thinks that the mere hiring of a well known former business exec will do wonders for the charity, then I have a bridge in Brooklyn to sell them.

Sometimes, businesspeople are hired to join a nonprofit Board. They of course bring with them a wealth of experience and knowledge which is expected to be useful to the organization. Except…

Business Brain

Of all of the above, one thing has always puzzled me:

What happens to Board members when they move from the business world into the nonprofit one?

I have a hypothesis which says that these people forget everything they learned and practiced in the business world when they agree to join a charity Board. When I was explaining my theory to a colleague last week, he said:

“A friend of mine has a saying for this: They check their business brain at the door.”

And they’re right.

In the business world, everyone knows you spend a buck to make a buck or more. You need a sales team but you also need to invest in marketing, content, communications and the like.

You invest money in the business so it will grow and thrive.

In the nonprofit sector, the prevailing mindset is one of scarcity and poverty. That mindset leads organizations to not spend and not invest- not just in its staff (woefully underpaid) and hiring (everyone wears multiple hats) but also in professional development, marketing, comms etc.

We live from day to day. We have to worry today about keeping the lights on. Investing in tomorrow? We don’t have the money for that.

How’s it possible that Boards with people who understand the importance of investing for tomorrow allow nonprofits to simply not spend, to not invest in tomorrow?

Don’t they realize they’re stunting the organization’s growth?

Don’t they understand that by not allowing the nonprofit to grow they’re also not allowing the organization to reach more people in need and have more impact?

One Day…

Businesspersons understand the value of retaining a customer (and how much more it costs to acquire a new one) and yet the overall average donor retention rate is an abysmal 40%. How could any Board let that happen?!

Obviously the blame doesn’t only rest with the Board. But they are involved with the decision making, hiring, budget and long-term health of the organization. How are they allowing this to happen?!

I have a dream to one day survey nonprofit Board members who come from the for-profit sector and ask them about this.

Find out why their business brain just shuts down when they enter the charity conference room.

They want to see the organization succeed. They want the nonprofit to fulfill its mission. Just like everyone else these Board members want to help as many people as possible.

And yet their decisions do the exact opposite and create an environment where every cent spent has to be examined by ten people before getting authorized.

Before you come at me, I realize I’m casting quite a wide net here. There are plenty of Board members who demand that the organization spend to grow. These Board members are dedicated to the cause and are giving their time and effort to help a cause close to them.

But given what we know about how nonprofits operate in general, it makes me wonder how businesspersons allow this to continue.

One day I will survey them to understand the phenomenon of checking their business brains, expertise and knowledge at the doorstep of the nonprofit.

Until then I’ll remain puzzled.