For-Profit Execs in the Non-Profit World: Culture Shock

A for-profit executive who thinks she/he can easily transition to become a non-profit executive usually does not appreciate the difference between these two worlds.  Two key differences are the difference in metrics and decision making styles.

Financial bottom-line metrics are given less emphasis as performance metrics in a non-profit.  The financial regulations and various funder requirements for non-profits are often very different and more demanding than requirements faced by for-profits.  Metrics for non-profits may vary considerably from one non-profit to the next, depending on their mission and funding requirements.  Sometimes creating appropriate metrics for non-profits is challenging.  For example, counting numbers of people attending an event may not capture the value of a non-profit focused on fostering creativity in the arts.

Decision making in non-profits may be slower at times because consensus building is often a non-profit goal.  Also the constituents may be more diverse, with each wanting input on various issues:  funders, communities/groups with an interest, and volunteers, in addition to the staff and board.  A top-down decision making style can be viewed as being unconcerned about broader input and may result in resistance.

Learning these and other differences (e.g., executives’ passion for the non-profit mission, managing volunteers, differences in human resource practices) between these two environments will better prepare an executive who wants to move to the non-profit world.  For-profit executives may bring well-developed organizations skills and higher expectations for performance to a non-profit organization.