Children's Voice Mar/Apr 2006

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Private Professionals, Public Sector--Does It Work?

Corporate executives who have transitioned to the nonprofit world cite the challenges--and the rewards--both for nonprofit organizations and the execs who join them.

By William Atkinson

Mark Redmond, Executive Director of Spectrum Youth and Family Services in Burlington, Vermont, admits he has never conducted research on the issue, but he has always wondered why people from the for-profit sector seek to become executives in the youth services field.

"What qualifies them?" he wonders. "I never see it go the other way, where someone from youth services becomes an executive of a corporation."

Redmond recalls a personal experience where he was interviewed for a management position at a national youth service agency. "Several of the people who interviewed me had been executives in the oil industry," he says. "I've spent 24 years in this field. What qualifies them to judge my ability to manage in the youth services field?"

Redmond doesn't believe there's a need to look beyond existing talent in the youth services field to fill executive director positions, but he thinks he understands what motivates boards to look in the for-profit sector: "The boards think they have a lot of connections and will be good at fundraising." He points to universities, where many college presidents are being hired for their fundraising abilities rather than their understanding of what universities should be. "This is a sad and dangerous trend, and I think it's being followed in our field."

On the other hand, Redmond understands why some executives want to transition to nonprofit careers. "I believe it's out of goodwill," he says. "Many of them have served on nonprofit boards or done some volunteer work. They have made their money in the private sector, and they are looking for a second career and want to do some good."

Whether or not Redmond is right, his arguments raise an interesting question: Are executives from the private sector qualified to steer nonprofit organizations? Certainly not all are qualified to do so, but in some cases, the transition works well.

Looking for Change

Mike Vogel is an excellent example of someone who has successfully transitioned from the private sector to chairing a nonprofit board. Vogel, Board Chair for KidsPeace in New York, is the former President of Day-Timers, which offers organization and time management products, and is currently Executive Vice President of ACCO North America.

When Vogel was with Day-Timers, a KidsPeace board member invited him to join them on the board. "After visiting their hospital and seeing the good work they were doing, I said I'd be happy to be considered for the board," Vogel recalls. In recent years he has slowed his business career to spend more time with KidsPeace. "When I was asked to be chairperson, I agreed to do so."

Vogel feels he brings a lot to the table for the organization. "The board can give counsel and guidance to the KidsPeace leadership to help them focus on the long term," he explains. "Sometimes, nonprofit organizations tend to focus more on the short term; however, nonprofits have ups and downs, just as businesses do in the corporate world." Board members from the private sector can share these experiences with nonprofit leaders and help them put the ups and downs in perspective.

Michelle Gislason is another example of someone with private-sector experience who now consults in the nonprofit sector as Projects Director for CompassPoint Nonprofit Services in San Francisco. She worked in various marketing director positions in for-profit companies before becoming interested in educational services and working as a marketing director for a dot-com educational portal. She began transitioning to nonprofits in 2000 when illness led her to reevaluate her priorities and values. Friends working in the nonprofit sector asked her to do some consulting in the field, and she eventually made the move permanent.

"Even though my background was marketing and communications, I realized my real skills, and the reasons I had always been promoted in previous jobs, were my abilities to communicate and get people from different departments to talk and work with each other," she points out.

Organizational development, organizational psychology, professional development, and coaching skills are also where her passions lie. "CompassPoint was the perfect fit for me," she says. "Not only was it in the nonprofit sector, but it was also involved in consulting, training, and coaching. It offered all the things I loved to do."

Gislason has found, though, that when people come from the for-profit world to the nonprofit, they need to get up to speed quickly in areas such as financial management and reporting, which are very different between the two sectors.

"Another [difference] is the fact that you need third-party funding, not just income from your customers and clients," she says. "The culture looks different, too. In the nonprofit sector, organizations tend to be more consensus-based, as opposed to the for-profit sector, where decisions are more likely to be made from the top, and made rather quickly."

Yet another cultural difference is that scarcity and sacrifice are understood in nonprofits. "Executives often find they can't ask for what they need for themselves," she explains. "They have to take a 'hit' themselves. That is, their salaries and professional development have to come second to the organization."

Making the Transition, Confronting Challenges

Randolph McLaughlin, Executive Director of Hale House in New York, is another example of someone who successfully transitioned from the corporate to the nonprofit world.

A graduate of Columbia University and Harvard Law, McLaughlin worked with civil rights attorney William Kunstler at the Center for Constitutional Rights, first as a staff attorney and eventually as the Associate Legal Director. He then went into private practice, focusing primarily on civil rights, and has been a Pace Law School professor since 1988. He served as Director of the Social Justice Center at Pace from 1996 to 2001.

In 2001, McLaughlin was asked to serve at Hale House as Special Counsel to help restructure the organization and work with the new board, which he did until 2004. "When the executive director stepped down, I was asked to serve as interim director," he recalls. "I fell in love with the organization, and the board asked me to stay on." McLaughlin gave up his private practice, took a half-time, evening position at the law school, and began working at Hale House full-time.

He emphasizes the transition was not particularly difficult. "In addition to the knowledge I gained as Special Counsel...for three years, plus the excellent working relationship I had with the board, I also had experience in management at the Center for Constitutional Rights and at Pace." Despite challenges, things worked out well overall. "We have developed a cohesive sense of mission and purpose, we have no hidden agendas, and we work to build consensus."

Ken Tutterow, President and CEO of Children's Home Society of North Carolina (CHS), Greensboro, has a degree in accounting and is still a CPA. In fact, he began his career in public accounting and in 1986 became Chief Financial Officer for an apparel company. Tutterow joined the CHS board in 1985. He and his wife had been involved with the organization as foster parents. He became Board Chair in 1989 and retired from the for-profit sector in late 1990 to become CHS's President/CEO.

One reason the board asked him to take over was because changes were taking place in its services, requiring more fundraising and administrative focus. "When I came, for example, we only had one computer."

From a program standpoint, Tutterow didn't feel he needed to move the organization forward. "The programs were excellent," he says. "Rather, I felt I could bring business principles and administrative controls to the organization. In fact, even today, I don't get involved in the programs unless there's a problem." Instead, he focuses his time on development, marketing, board and community relationships, and strategic planning.

Tutterow sees this arrangement more and more in other organizations. "The old belief used to be, 'We are doing some wonderful work, so God will take care of everything.' However, it doesn't always happen that way. You can't take for granted that funding will always be there simply because you offer great programs." He has found that most people choose social work careers to provide services and help people, not spend their time on administration, strategic planning, and fundraising.

Tutterow admits, however, the transition came with challenges. "For example, the private sector tends to hire the brightest and most aggressive people, but then spends a lot of time reining them in and trying to keep them focused. In the nonprofit sector, the challenge is often to get the program people to accept responsibility and to understand they have to be accountable. As a result, I've had to push more than restrain and to get people to think outside of the box."

Yet another example of a successful transition from for-profit to nonprofit is Todd Landry, President and CEO of Child Saving Institute in Omaha, Nebraska. Landry worked in financial and commercial roles for 13 years with energy company Conoco in Houston.

"One thing the company instilled in its employees was to become involved in the community," explains Landry, who got involved in the United Way and other nonprofit boards and was a court-appointed child advocate. "I enjoyed these experiences very much, and I always thought when I retired from the corporate sector, I might want to become involved in the nonprofit arena in a leadership role."

When he mentioned this to his United Way board chair, she suggested that rather than waiting until he retired, he should do it right away. "She convinced me my corporate experience, my experience on nonprofit boards, and my personal interest in the field would be of value in the nonprofit sector." She pointed him to a United Way organization in Houston called Spaulding for Children, an adoption and foster care agency in need of a finance director.

The organization had excellent programs, Landry says, but needed help with finances and strategic planning. After three months as Finance Director, Spaulding asked him to become CEO. Child Saving Institute, another strong foundation with well-run programs and great outcomes, recruited him five years later. "What the board was seeking when they hired me was to utilize my business management, strategic planning, and financial management skill sets."

Landry experienced challenges in the transition. "One thing is that you're learning a new field, so you need to take the time to understand it," he advises. For instance, the nonprofit community usually has a strong level of cooperation and collaboration with other nonprofits--a new experience for people coming from the corporate world.

"When I joined Spaulding, we offered training to other organizations to use a certain type of adoption practice to get their own state contracts and develop their own programs." At first, the concept was challenging for him--from a corporate perspective, one might want to retain that expertise as a core competency rather than share it with others. "I needed to realize the goal was to move more children into permanent adoptive families."

Landry says he is blessed with strong program staff. "If this strength is lacking in the program area, it is probably not a good idea for a board to bring in someone from the corporate area to lead the organization."

Advice from Those Who've Been There

Landry, Gislason, and McLaughlin offer recommendations to boards considering executives from the corporate sector, as well as for the executives themselves:
  • "First, you must have a passion for the organization's mission and really care about what is going on in the organization," Landry says. "The community and the staff will both be looking for this from you. If you lack this passion, it doesn't matter what skill sets you have."

  • "You also have to take the time to understand the programs before you begin making decisions that will affect the programs," he continues. "Then, collaboratively, come to decisions with your leadership team or direct circle of staff."

  • If you haven't already done so, Gislason recommends first volunteering for the agency or serving as a board member to better understand the organization.

  • "Come in with an open mind and a sense of humility, being open to learning," she adds. "There are a lot of incredible people in these organizations who can teach you a lot. You can't operate with the belief that, 'I've been in the for-profit sector, I have all this experience, so I'm going to come in and rescue the organization.'"

  • McLaughlin's recommendation is simple: "Read Peter Drucker's book on nonprofit management (Managing the Nonprofit Organization: Principles and Practices, Collins Publishing, 1992). This book helped me immensely."
William Atkinson is a full-time business writer and former regional reporter for TIME, and a regular contributor to Children's Voice.

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