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Switching from For-Profit to Nonprofit

Switching from For-Profit to Nonprofit

A leadership deficit is prompting nonprofits to look outside their ranks for managers, says Bridgespan Group Chairman Thomas Tierney

BusinessWeek | Emily Keller

Roche, who was the vice-president of global marketing for the Avon Products (AVP) and then president and chief operating officer of the personal care products maker Carson Products before switching to nonprofit work, says the most interesting aspect of her transition was adjusting to the challenges of bringing financial contributors on board and accepting that when funding requests were denied, it didn’t mean she had failed at marketing the institution.

Like Roche, Jarrett Barrios, who focused on health-care issues as a state senator in Massachusetts before becoming president of the state’s Blue Cross/Blue Shield Foundation in July, was challenged by the nonprofit world’s more limited financial resources. In the nonprofit sector, Barrios says, he is now more accountable for his spending than he while serving in state government. “You live and die by your ability to budget well,” says Barrios, whose position has also reduced his authority but afforded him more time with his teenage children.

LOOMING LEADERSHIP SHORTAGE

While switching to the nonprofit sector may be challenging, the Bridgespan Group, which recently started a multimedia portal offering tools that facilitate the transition, says it will become increasingly necessary over the next decade. Bridgespan predicts that 640,000 new leaders will be needed in the nonprofit sector by 2016, due to the retirement of the baby boomer generation, the growth of the sector and its consequent need for greater financial expertise, and a lack of internal training programs to groom future leaders.

“Making the switch to the nonprofit world is more than changing your job; it’s changing your entire life,” says Josh Ruxin, a Yale University Truman Scholar: “You’re more likely to bring your work home when it’s lives on the line rather than money on the line.”

Ruxin founded the nonprofit Access Project in Rwanda in 2002. “Most of my focus is on providing private-sector management solutions in counseling, coordination, and strategy to improve health care for some of the poorest people on the planet,” says Ruxin. The former management consultant says the skills he learned at the Monitor Group, a management consulting firm in Cambridge, Mass., have been invaluable in helping him to think creatively about how to reduce poverty and increase prosperity.

Kathleen Yazbak, managing director of national relationships for Bridgestar, a division of Bridgespan, says those likely to excel in the nonprofit sector have experience in an entrepreneurial or innovative environment, have played a broad role at their prior organization, have a flexible rather than a linear career path, and are able to take a multidisciplinary approach to team projects.

Oppenheim acknowledges that cross-pollination is happening. “Nonprofits are nonprofits and corporations are corporations [but] there is a greater degree of synergy between the two than I’ve ever seen before,” she says. Ruxin, for one, welcomes the trend. “There definitely is a transition under way,” he says about the nonprofit sector’s gradual adoption of some corporate practices and for-profit recruits, which he calls a new and promising development. “It’s the best thing that could happen to nonprofits.”

Keller is a reporter for BusinessWeek.com in New York.