Dana Hagenbuch, vice president of Commongood Careers, a national search firm for innovative and growing nonprofits, speaks to eFC's Emma Johnson about the increased demand for financial professionals at nonprofit organizations, the cultural difference between Wall Street and the do-good world, and what it takes to make the transition.
The nonprofit job sector is really healthy. In the past two years we've seen job growth increase by 20 percent while other sectors are down or still, and there is a strong demand for people with financial backgrounds.
Nonprofits don't always depend on the market since they're backed by large donors, or because the Internet and social media facilitate lots of small donations there is less of a direct relationship to how Wall Street is doing.
There is also a cultural and generational force behind this trend. Social innovation is a big movement. Even business schools have classes that teach it, and donors are increasingly excited by nonprofits, but push for those that are results-oriented. Most nonprofits are more like an Internet startup than a large corporation or investment bank.
Types of Nonprofit Jobs For Financial Pros
This is all good news for financial types.
Because of smaller budgets, most nonprofit finance roles need a jack-of-all-trades: someone who can be quantitative, analytical, create a spreadsheet and apply that experience to a more entrepreneurial environment. We see a lot of chief financial officer roles being created, as nonprofits are becoming more strategic. An MBA holder with as little as five or 10 years experience can be considered for this position.
There is often more leeway to take a job that will move you up the ladder. For example, if you were a manager for a financial firm or a bank, you can move into a director role at a nonprofit.
Those with loan officer experience have a lot of opportunity with organizations that extend credit to nonprofits, as well as for those who come from accounting who can step into titles like controller, finance manager and finance coordinator. Grant-making organizations and foundations often hire analysts or those from management consulting backgrounds.
Because nonprofits often requires each employee to take on multiple roles, the mid-career level is the sweet spot.
What About the Pay?
Salaries at nonprofits are comparable with Wall Street with a director of finance earning between $80,000 and $120,000, and a CFO at $130,000. What you don't get at a nonprofit is the bonuses.
The reason people go into nonprofit work today is very different than 20 years ago. Today, people not only want to make a change, but they are also very entrepreneurial and results oriented. Lots of baby boomers want to have a post-retirement career and are going into nonprofits, and it's part of the identity of Generation Y and Millenials to do good and contribute.
In order to be hired at a nonprofit, you have to have passion for the organization. Every day we talk to those who are burnt out on the Wall Street rat race, and that is not good enough. You need a specific connection to the mission and the work of the organization.
How Can You Break In?
The most obvious way to prove that connection is to volunteer. If you want to work for an environmental organization, you need to spend time with a group that promotes that cause, or show that you're an avid hiker and love the national park system, or that you minored in environmental studies in college. Serving on a board of directors is a good way to show your commitment.
Another way to get relevant experience is by working at an entrepreneurial startup. Just like nonprofits, these organizations create something out of nothing, experience a lot of camaraderie and teamwork, and people bring their values to work and care very deeply about the issues addressed by the organization - even if you're just a number cruncher.
Of course many financial types get pigeonholed at investment banks. If you're interested in going to nonprofit, I suggest reading a job description in the sector and see what they're looking for. Write your resume to address those requirements.
Even large, old nonprofits like the American Red Cross or American Cancer Society are increasingly influenced by younger organizations and the push to be results oriented. They are seeking out people who grew up in the 90s and 00s who bring those values.
There is still a bit of a myth that it is easier to work in the nonprofit sector, but I would argue that it is harder. You're working just as hard but with fewer resources, fewer people, and less money. And when your heart is in it, you don't just check out at the end of the day.