Nonprofit Groups Attract CFOs From For-Profit Companies
Charities seek executives who can instill financial discipline, but new jobs require some readjustment
The Wall Street Journal article, “Nonprofit Groups Attract CFOs From For-Profit Companies,” quoted Russell Reynolds Associates' Jenna Fisher about CFOs making the move from for-profit to nonprofit companies. The article is excerpted below.
As a former finance chief of four public companies, including mortgage giant Fannie Mae, David Johnson knows about investments. “When I think about investment, I immediately think about hurdle rates, return on investment and return on equity,” he said.
At the International Rescue Committee, the refugee-aid charity that Mr. Johnson joined last March, the term investments refers to the aid it dispenses to support refugees. “It’s almost like we’re speaking different languages,” he said.
Like Mr. Johnson, many chief financial officers are making the transition to the nonprofit arena, grappling with unfamiliar nomenclature, accounting rules and cultures.
Driving the trend, recruiters say, are the increasing demands CFOs face in profit-driven businesses and the growing number of charities seeking the financial discipline that a for-profit CFO can bring.
There are also the hard-to-quantify cultural differences. Charities aren’t always as rigorous about cost management and efficiencies as their for-profit counterparts. And they tend to move slowly and collaboratively, frequently involving board members in management decisions.
“Sharp-shouldered individuals” who prefer autonomy don’t fit in well, said Jenna Fisher, head of the global corporate sector at executive-search firm Russell Reynolds Associates Inc.
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