Blog: Jerry Lindman

However, with the dramatic growth of the nonprofit sector in the last few decades, the challenges, expectations and requirements have also grown, and changed. It is these new demands on nonprofit organizations and their leaders that require a higher level of strategic management. Measurable outcomes, financial sustainability and accountability and transparency are the new challenges today. The nonprofit CEOs of today need to simultaneously manage many challenges that result from:

• Increasing demand on nonprofit services
• Decreasing government funding
• Growing competition for charitable contributions and grants
• Higher expectations from donors regarding the impact of their donations
• Increased oversight and regulation from federal and state governments
• Expanded media coverage
• New technological applications
• Unique volunteer habits of Gen X and Millennials.

In closing this blog, I leave you with a statement by Peter F. Drucker, longtime guru in corporate and nonprofit management. With this statement, Drucker lays down the gauntlet to the nonprofit sector in regards to its important role of developing the leaders of our society for the 21^st Century. 

"…. The more economy, money, and information become global, the more community will matter. Only the social sector nonprofit organization performs in the community, exploits its opportunities, mobilizes its local resources, and solves its problems. The leadership, competence, and management of the social sector nonprofit organization will determine the values, vision and performance of the 21st century society." ¹

Fund development officers are the professionals who provide the critical leadership and management of the various programs used by nonprofits to secure charitable contributions and grant funding. Whether in hospitals, universities, museums, fund development officers are highly respected professionals serving in executive levels and reporting directly to the CEO and board of directors. All nonprofits, regardless of the size and fields of interest, have a fund development program, most have a fulltime position or positions for this function. 

The fund development field is actually made up of several subsets of development specialists who manage the standard fundraising methods commonly used to secure charitable contributions such as major gifts, annual fund, planned giving, and special events and grant writing. Each of these specialties requires distinctive skills. The fund development field also includes many key support jobs which staff various important functions in a professional fund development office such as researcher, data mangers and web specialists. All the positions in the fund development office are in high demand and have the best average pay of all nonprofit positions. Average salary for U.S. fundraisers was $72,683 in 2007. 

The skill set and competencies of a fund development staff have similarities to business sales and marketing however there are critical differences which need to be addressed for a successful transition to a nonprofit fundraising career. Here are some tips for exploring whether a fundraising career is right for you:

1. Keep in mind that the nonprofit sector is about achievement of a mission not a profit, especially when fund development is concerned.
2. Don’t get hung up on the barrier of being uncomfortable asking people for money. Once you understand the field of fund development, you will appreciate how naïve this perspective is.
3. Most people do not fully understand the profession of fund development and various activities that make up a professional program. Take time to read about the fundraising profession. There are some quality books such as Careers in Fund Raising, Lilya Wagner.
4. Get quality, professional training in fund development. Two highly regarded professional certifications programs are The Certified Fund Raising Executive (CFRE) and the Certificate in Fundraising Management (CFRM). For information about the CFRE program for fundraising professionals click here. For more information about the CFRM education program for fundraising professionals, visit here. 

Fund development for nonprofit organizations offers an exciting and viable professional career option for persons who take time to fully understand the nonprofit sector and the various jobs of the fund development professional.

As you design your skilled based resume, consider that most nonprofits are small and managers are charged with multiple management functions. Therefore, demonstrating multiple management skill sets is valuable to nonprofit employers. The following list of core nonprofit management competencies may be helpful in categorizing your skill sets: 

Throughout the job search process, keep in mind the 'mission-focus' of the nonprofit sector and its organizations. Though financial sustainability is vitally important, the key primary focus for nonprofits is the success of achieving the mission. Keeping this clearly in mind will help you present your business experience and education in the most convincing light.

When you craft your cover letter, keep in mind its main purpose is not to get the job but to get the interview. Always highlight your key accomplishments that closely match the employers specific needs identified in the job description.

Networking Techniques

As with most job searches, the majority of job openings are never advertised or publicly announced, filled through word-of-mouth or networking. Consider these networking techniques for your nonprofit job search:

Translate work experience to nonprofit job types with nonprofit education and training

• Education that addresses critical nonprofit management functions like fundraising, volunteer and HR management, financial management, program assessment.
• Consider shorter nonprofit certificate programs if you already have a graduate degree. For example, the College of Management at Lawrence Technological University offers a 36 credit MBA with concentration in nonprofit management but also offers a 12 credit graduate certificate in nonprofit managent and leadership which is very attractive to experienced business and government professionals who already have a masters degree but don’t have education in core nonprofit management competencies. Such a short graduate certificate also helps translate your work experience to the mission-based organization.
• Volunteer strategically; work on project which utilize your past experience and skills; work directly for a nonprofit CEO or executive who has influence in hiring decisions.
• Volunteer to serve on a board of directors. It's a great way to immerse yourself in nonprofit management and allows you to network with nonprofit board members.But it is important to understand how your background and skills apply to critical nonprofit management functions.
• Consult or take on project work in your area of expertise; nonprofit heavily utilize consultants and independent contractors; great way to witness and compare the cultures of different nonprofits and evaluate which is better for you.
• Seek informational interviews with nonprofit CEO’s and executives. 

Interview and Preparation

An interview is your chance to sell yourself. The more you are comfortable with your strengths (and weaknesses) and how you may fit into the nonprofit, the more success you will have. 

Preparation includes researching the particular nonprofit and its industry (e.g. arts & culture, health, environmental, education, etc.). Research is one of the most important components of a job search. You will not succeed in your job-search without knowledge of the organizations you are interviewing with or information about the particular nonprofit industry.

Finally, some additional activities to improve your chances of successful nonprofit job search are ‘strategic volunteering’ and nonprofit education and training. Volunteering is essential to understanding the uniqueness of the nonprofit organizations.

All types of volunteering are important and valuable but for people seeking employment I recommend ‘'strategic volunteering'. Strategic volunteering is a volunteering assignment of limited duration, arranged between a nonprofit executive and an experienced volunteer, to carry out a valued management deliverable for the organization. This type of strategic use of volunteering is a win-win for the nonprofit and the person seeking employment. It is a great way to help translate business skills to nonprofit management.

Training and education in nonprofit management is critical to any person working, or seeking to work, in the nonprofit sector because of the dramatic sector changes. A variety of levels of training and education exist from community seminars to graduate college education. Lawrence Tech nonprofit graduate students come from all walks of life. Many already have master’s degrees. Regardless of their background, they find helpful the immersion into core nonprofit management competencies with the particular emphasis on fundraising. 

The job search for a nonprofit job is similar to most professional job searches. Following these tips regarding crafting of a resume, developing a network and preparing for the job interview will help you to make the case that you understand the unique challenges of a nonprofit organization and will add real value to the achievement of its mission.

They also need to get a dose of reality at this stage. Though their passion for seeking meaningful work is a key indicator of potential success in transitioning to a nonprofit career, it can easily blind them to the realities of nonprofit work. Multi-tasking, heavy workloads, and lower compensation (relative to business and government) are key sources of burnout for current nonprofit leaders and executives. I ask people to take time to reflect on these issues and the risk involved in the decentralized nonprofit sector, which is predominantly made up of small organizations with operational budgets under $500K. It is this dose of reality that often causes people to think twice, and I don’t see some of them again. 

At this stage, I also introduce them to other ways in which they can contribute at a high level with a nonprofit organization—and gain great satisfaction—withoutbeing a fulltime employee. Serving on a board of directors is one such option.  

In the nonprofit sector, the volunteer board of directors is legally in charge of the operations of the nonprofit and research shows that the more effective board an organization has, the more successful it is. This is why the Center for Nonprofit Management hosts a low-cost workshop series to train new or emerging nonprofit board members. Called BoardWALK, this series is offered in partnership with the United Way for Southeast Michigan and the Detroit Executive Service Corps. For more information about its seven workshops, visit ltu.edu/management/nonprofit_training.asp. 

To update people on today’s nonprofit sector, I start with developing a common definition of what we are talking about. 

There are many commonly used terms to describe the nonprofit sector, such as ‘nonprofit,’ ‘not-for-profit,’ ‘charitable organization,’ ‘exempt organization,’ and ‘public charity.’ Also, there are many types of nonprofits, such as hospitals, museums, universities, food banks, religious organizations, the Red Cross, United Way, etc.  

What they all share in common is that they are legally established nonprofit corporations authorized under Section 501(c)3 of the Internal Revenue Code as 501(c)3 nonprofits. As 501(c)3 nonprofits, they are all legally bound to carry out a public purpose and share a very unique tax advantage (beyond their tax exempt status): contributions to the nonprofit are deductible by a donor on their federal and state income tax returns.

Nonprofits offer a wide variety of publicly beneficial (if not essential) programs and services in our communities. Researchers commonly categorize 501(c)3 nonprofit organizations into the areas of their interest::

• Arts, culture, and humanities – Includes museums, symphonies, theaters
• Education and research – Includes private colleges and K–12 schools, research institutions
• Environmental and animals – Includes zoos, bird sanctuaries, wildlife and land protection organizations
• Health services – Includes hospitals, public clinics, and senior and nursing home facilities
• Human services – Includes housing/shelter/food, programs low-income clients
• International and foreign affairs – Includes overseas relief and development assistance
• Public and societal benefit – Private and community foundations, civil rights organizations, and civic, social, and fraternal organizations
• Religion – Includes all types of houses of worship and their programs

In the three-county area of Southeast Michigan, as of 2004¹, the nonprofit sector consisted of a total of 2,446 public charities with expenditures of approximately $15.3 billion. The breakdown by type of most of them is:

• Health services – Total: 379 with annual expenditures of $11.7 billion
• Human services – Total: 846 with annual expenditures of $1.7 billion
• Education and research – Total: 401 with annual expenditures of $.5 billion
• Arts, culture, and humanities – Total: 207 with annual expenditures of $.2 billion

Another reality check for people is to view the latest compensation studies of CEOs and staff at charitable nonprofit organizations. An example of a national study is the 2008 CEO Compensation Study by Charity Navigator². Some of the findings of this salary survey of CEOs are:

• The top leaders of the 53,241 charities in America evaluated by Charity Navigator earn an average salary of $148,973, representing a 2.55 percent increase from the prior year.
• For the Midwest region the average salary of a nonprofit CEO in 2008 was $140,795, a 3.36 percent increase.

Regardless of the type or size, at some level, all nonprofits share common management functions, competencies, and legal requirements, which clearly make them unique from business and government enterprises.  

The common management functions shared by 501(c)3 nonprofits are:

• Fund raising/Grant writing – the systematic seeking of charitable contributions and grants
• Governance – Lead by a voluntary board of directors
• Nonprofit Financial Management – Management of various revenue sources in from grants, charitable contributions, and earned income
• Nonprofit Programs Outcomes – Success is measured by, at least, dual bottom lines: mission and financial
• Public Policy – They have unique legal restrictions on lobbying
• Volunteer Management – This essential skill for nonprofits  represents the heart of the charitable nonprofit sector!

As I said previously, employment and careers in the nonprofit sector are not for everyone. The important passions that drive the sector to achieve and have made it what it is today can sometimes blind organizations to sound, sustainable management. But, increasingly, it is the right place for a growing number of persons to pursue a meaningful professional career. 

What do you think about the management of nonprofit organizations today? What is your experience? How are you connected to it: volunteer, donor, board member, employee? All of these roles are essential in today’s nonprofit sector. But, they do need to be managed effectively.

My career coaching stems from my work as a professor in the College of Management and as the Director of the Center for Nonprofit Management. As in all educational programs at Lawrence Technology University, it is my job to educate and support a new generation of leaders, in my case, leaders of charitable nonprofit organizations. 

In initial coaching sessions, there are three questions commonly asked:

1. Why is there a need for a graduate program specifically for charitable nonprofit executives?
2. Why hasn’t my business education and work experience already prepared me to be a CEO of a nonprofit?
3. How did this program get started at Lawrence Technological University, a place long known for educating successful engineers and architects?  

I always enjoy responding to these questions. 

The first point is easily addressed by providing recent research on the nonprofit sector, its organizations, revenue and employment, over the last few decades. This information demonstrates tremendous growth in the nonprofit sector. 

For example, a 2006 national study identified a 'stunning deficit' in the supply of nonprofit executives over the next ten years. The study concluded that "the projected leadership deficit results from both constrained supply and increasing demand" for executives at nonprofit charitable organizations.¹ 

Various other national institutions have recognized this dramatic growth in the nonprofit sector and sector’s increasing role as a major economic contributor to local and national economies.

Though still significantly smaller in size compared to the business and government sector of our economy, its annual growth has increased much faster. As the Federal Reserve Bank of Minneapolis stated in a recent publication entitled The Economy’s Middle Child² (Fedgazette, July 2006) "..a major part of the economy, the nonprofit sector is poorly understood and maybe a tad underappreciated……despite the fact that it employs close to one in 10 American workers and has annual revenue in the trillions. You might even nominate it as the nation's most productive sector, given its extensive use of free labor." 

Why a business career doesn’t directly translate into a nonprofit career goes directly to the heart of the difference between profit-making versus mission-focused enterprises. This fundamental difference in organizational focus determines uniquely distinctive management competences at charitable nonprofit organizations, which many business professionals are unfamiliar. Management competencies unique to the nonprofit sector include fundraising, board and volunteer management and financial management are examples.  

Don’t get me wrong, Lawrence Tech's nonprofit management program was designed with the firm belief that nonprofit managers can learn a lot from the proven business practices, that business professionals are needed in the sector, and will fill the projected shortfall in nonprofit executives.

However, transferring business competencies is best done with an understanding of a mission-focused organization and its unique culture. The graduate program focuses on this transformation and helps a business professional make that transition successfully.  

As for how this program took root at a university known for its engineering and architecture programs, it has a lot to do with Lawrence Tech’s vision for the new economy of Southeast Michigan and its entrepreneurial approach to education.  

Launched in 2002 by Dr. Robert Inskeep with the support of the Charles Stewart Mott Foundation, the LTU graduate nonprofit management program was created to be part of a traditional school of business management to see how it might address the growing demands placed on nonprofit leaders by government, funders and donors.

Today, there are dozens of people pursuing graduate nonprofit degrees at Lawrence Tech's College of Management for either an MBA with a concentration in nonprofit management or a 12 credit Graduate Certificate in Nonprofit Management and Leadership. Each student receives the support they need to transition or advance their nonprofit careers. 

I have also learned that the nonprofit sector is not for everyone. It is best suited for a person with a unique blend of characteristics. In my experience, it takes a person with a strong drive to pursue non-monetary benefits in a job; motivated more by societal than personal monetary gain.

From my perspective these people are risk-takers and entrepreneurs, albeit 'social entrepreneurs'. These people understand what Jim Collins means when he says "I’ve come to see that it is simply not good enough to focus solely on having a great business sector. If we only have great companies, we will merely have a prosperous society, not a great one."³  

So, are you one of these types? Have you considered pursing a career with a charitable organization? I mean a permanent, fulltime job that pays a salary and benefits? Let me know your thoughts or any questions you may have. 

My next posting will share information on how to evaluate and explore nonprofit career for yourself including current examples of compensation in the sector. I will provide some updated information on the today’s nonprofit sector and where it is headed in the future.