Turning Fund Raisers Into CEO’s

More and more charities seek leaders with money-winning skills

Paige Flink, executive director of Family Place, a Dallas shelter for battered women, learned how hard it can be for a

fund raiser to step into the chief executive’s job at one of her first meetings with the organization’s board.

Ms. Flink knew most of the 45 trustees, and she walked into the meeting confident it would go well — even though she had some bad news to share.

A big project the charity started three years earlier — placing clients in private homes rather than the institutional confines of a shelter — had turned out to be a failure, Ms. Flink says. Even though Family Place had sold its shelter, it was clear to Ms. Flink and the charity’s staff that they should scrap the private-housing project and build a new shelter at a location she had chosen.

But board members had other ideas.

“They just looked at me and said No,” recalls Ms. Flink.

Eventually, after more meetings, the trustees finally agreed, she says, but the experience taught her a sobering lesson: Fund-raising skills do not necessarily translate into the leadership skills a chief executive needs.

“As a fund raiser, I came from the sales side,” she says. “It’s all about being one-on-one with people. I thought if I just looked them in the eye and told them all the benefits of the shelter, they would buy it.”

What she should have done, she says, is reach out to key board members before the meeting to prepare them and build consensus for her proposals.

Not Prepared for the Challenges

While stepping into the top job can be a rewarding career path, many former fund raisers who now run charities say they were ill prepared for the demands and potential pitfalls that chief executives encounter, such as tense relations with board members, overwhelming management duties, and the expectation that they can do all the fund raising and run the organization too.

For fund raisers interested in becoming a chief executive, however, opportunities abound. Nobody knows exactly how many development officers have been recruited for such jobs, but headhunters and nonprofit leaders say that more and more charities are hiring fund raisers to lead their organizations.

“Either fund-raising skills or the potential to raise money is a conversation we have with every search committee,” says Jay Berger of Morris & Berger, a Glendale, Calif., recruiting firm that places nonprofit chief executives. Fund raisers have skills that make them good candidates for such positions, he says, because they grasp the organization’s finances, its programs and services, and its board. In addition, they are used to promoting their organizations with donors and other people outside the organization.

“A lot of us are taking these jobs now; 10 years ago, there were not so many,” says Arlene Shuler, who has been president of the New York City Center, a performing-arts theater, for nearly three years, after serving as the nearby Lincoln Center’s chief fund raiser.

Out of the Running

Still, fund raisers are not being courted for top staff jobs in all parts of the nonprofit world, particularly the organizations that pay their leaders the most.

At nonprofit hospitals and medical centers, for example, most chief executive officers are accredited hospital managers, and many have additional degrees in health-care administration. Those criteria knock most fund raisers out of the running, although some hospital development officers do become president of their institution’s foundation or fund-raising arm.

Female fund raisers may also face barriers in ascending to the top job in wealthy nonprofit institutions, say some development officials.

In New York, “there are still so few you can count them on one hand,” says Poonam Prasad, a New York fund-raising consultant. Aside from two or three arts organizations in New York, Ms. Prasad says, few female fund raisers have made it to the top of the city’s largest nonprofit organizations.

Instead, she says, “these women are more likely to become head of a social-service agency, because it is easier to find a woman for a low-paying job.”

The most experienced female fund raisers, Ms. Prasad adds, often become consultants. “They could not get to the top, so it is easier for them to coach others,” she says.

Even if fund raisers do get beyond the obstacles and are candidates to lead a large charity, they need much more than the ability to raise money.

“If I am looking for a CEO, I also want to see developed management skills,” involving responsibility for budgets, programs, and staff, says Kristin Mannion, an executive recruiter in Korn Ferry’s nonprofit division in Washington. She says that she looks for fund raisers who have examined the mission behind an organization’s services, and worked closely with the people delivering those services to secure new resources while also enhancing the charity’s mission. “This is a different skill set than just being a great development person,” she says.

Difficult Career Move

But even fund raisers with plenty of management skills say that taking over the executive office is a career move that should not be entered into lightly.

Getting along with the board is often one of the most difficult hurdles, even though most fund raisers have spent time at board meetings and interacting with trustees.

“As a development officer, you are not really responsible for the board, but in leading, there is the whole piece of working directly with the board,” says Janice Gow Pettey, a fund raiser who spent four years as president of the Sacramento Region Community Foundation, before leaving in 2005 to become a San Francisco fund-raising and management consultant.

“You have a new chair every two years, so that took a lot of time and repetitiveness,” Ms. Pettey says of the foundation’s board. “There were some difficult times working with them,” she adds. “Just preparing for board meetings takes an inordinate amount of time.”

Fired or Forced Out

More daunting is the fact that nonprofit boards are frequently dissatisfied with the leaders they hire. More than a third of the nearly 2,000 executive directors in a survey released last month by CompassPoint, a nonprofit group in San Francisco, said that their predecessor had been fired or forced out by the board of directors (The Chronicle, March 9).

While some boards are simply getting rid of incompetent executives, the boards are all too often the incompetent party, says Colette M. Murray of Paschal Murray Executive Search, in Indio, Calif.

“Boards have problems keeping executives. They don’t understand their role is not to operate the organization; their goal is to guide and provide financial oversight,” she says.

Many trustees, she adds, think that, because they have hired a former fund raiser, they no longer have to raise money, or they want the executive to be in the office to take their calls even though they expect that person to be out raising funds.

“People talk to me about moving from fund raising to being CEO,” she says, “and I tell them to think about it very hard. Dealing with some of these boards takes a lot of talent.”

Some boards dominated by corporate executives want to move too fast — or they fixate on certain aspects of the charity at the expense of others.

“I was surprised to find out how much focus the board had on finances,” recalls Ms. Pettey about her community-foundation board. “The issue can become all about managing assets, but you need an equal passion for grant making,” she says. “If there is such an imbalance, the CEO needs good negotiating skills to make sure the board is not lopsided.”

In other cases, fund raisers struggle to gain credibility with a board even after they have taken over as chief executive.

“Your conversation is not regarded as expert opinion sometimes,” says Karen Ransom, a former fund raiser who is now executive director of the Museum of Children’s Art, in Oakland, Calif. Ms. Ransom assumed her position after a year as associate director, taking over from one of the museum’s founders in 2004.

“You are their employee, not their peer,” Ms. Ransom says of an executive’s relation to board members. “You can say it as the executive director, and a consultant can come in and say the exact same thing and they will hear it.”

Ms. Ransom says that she should have moved more quickly to assess her board’s fund-raising abilities, which have not yet reached optimum levels, and then hired outside experts to help her persuade trustees that change is needed.

To capture her board’s attention, Ms. Ransom recently asked an independent, well-respected source — the charity’s auditor — to make a presentation explaining how important donations from board members and other individuals are in the museum’s effort to reduce its reliance on government aid.

“It took me a while to figure this out,” she says.

Other fund raisers stumble as chief executive because their board fails to provide clear directives, expectations, and support. “Too many people are thrown into the deep end and not given the ground rules,” says Jay A. DiLorenzo, president of the Preservation League of New York State, an Albany group that promotes efforts to preserve historical properties. “There isn’t the level of contact needed after the hire is made.”

When Mr. DiLorenzo was promoted last year after serving as the league’s development director for three years, he received little direction from his board. He decided to draft 10 organization-wide objectives — such as obtaining new government funds and creating internships and fellowships to help bolster limited staff resources — that he felt should be used to measure his success. Then he presented those objectives to board members.

“They agreed to them,” he says. “If the executive committee or chairman does not have time to sit down with you and talk about how they will measure your success, then it’s up to the new executive director to promote these measures.”

Dealing With ‘Administrivia’

Another overwhelming aspect of taking the job for many fund raisers is the realization of just how many management duties fall on the chief executive. “You have to think about how different it will be, running the whole operation and having a lot of ‘administrivia’ to deal with,” says Ms. Murray, the executive recruiter.

Marty Tiani, president of the Arthritis Foundation’s Western Pennsylvania Chapter, in Pittsburgh, who took her job two years ago, after leaving a senior fund-raising position at another local charity, says “the greatest challenge is the amount of energy it takes to keep all the balls in the air: fund raising, strategic planning, board relations, finances, human resources.”

Ms. Tiani, who came into the job knowing that her charity had some serious financial shortfalls, said she was forced to cut her staff from 11 people to four, which she says was emotionally draining.

“At the same time,” she says, “I was trying to get three different programs going. I was working close to 60 hours per week.”

More Demanding, Not Less

Linda Netherton, former head of domestic fund raising for Mercy Corps International, a relief group in Portland, Ore., says that she was seeking a less demanding job seven years ago when she became co-director of a much smaller group, the Housing Development Corporation of Northwest Oregon, in Hillsboro. Ms. Netherton shares the chief executive job with her husband.

She manages programs, personnel, and fund raising, including supervising a development officer; meanwhile, her husband concentrates on the finance, asset management, and other operations of the organization, including overseeing its housing-construction sites.

What Ms. Netherton could not have predicted was how hard her job turned out to be.

“I had to learn the dynamics of the organization’s cash flow and how project funding and fees work in housing development,” she says. Those systems, she adds, are very different from how things worked at Mercy Corps.

Another hurdle, even for a seasoned fund raiser like Ms. Netherton, was the complexity of raising money for a housing-development group that relies more on government grants than on the individuals she was used to soliciting for gifts.

“I had to understand that the various levels of government often have conflicting priorities,” she says.

For example, Ms. Netherton says, she has been frustrated when government agencies identify low-cost housing as a priority but, instead of providing money for that purpose, have issued tax credits for private investors who have built rental units that low-income people cannot actually afford.

“I had assumed, coming from a large, international organization to a small, local one that there would be simplification of the work and it would be easier to manage,” Ms. Netherton says. “The big surprise was that this was absolutely not true.”

Unexpected Problems

In addition to the heavy workload, many fund raisers are surprised by unexpected problems when they step into the top executive’s shoes.

Deborah Wilson was hired two years ago as president of St. Joseph’s Institute for the Deaf, in St. Louis, to help erase a substantial financial deficit. She has succeeded in achieving that, but she says doing so was very difficult because of the outdated software and other big technology problems she unexpectedly encountered within hours of starting the job.

“We were using three different e-mail systems,” she says. “My administrative assistant couldn’t even read my calendar.”

Even with a deficit, she says, “the first thing I had to do was spend a lot of money on technology.”

Other fund raisers feel lost as chief executives because they have little experience in the programs and services of the organization they oversee.

“Many development officers are good at communicating programs, but when you are the ultimate spokesperson, a quantum leap needs to be made,” says Gregory Long, who left the chief fund-raising job at the New York Public Library seven years ago to become president of the New York Botanical Garden.

“It’s tricky being able to speak authoritatively if it’s not your field,” says Mr. Long. “I am not a plant scientist. I had to learn about conservation issues and how that’s being handled throughout the world. I had to learn about molecular biology and more. It took about a year to be comfortable. But you have to be the spokesperson from Day 1.”

Shift in Leadership Abilities

It is not just lack of expertise in programs that causes problems. For fund raisers to succeed as chief executives, they must often shift their perceptions and the leadership abilities they bring into the job, experts say.

An article published in the February issue of the Harvard Business Review, based on research with more than 200,000 executives, managers, and other professionals — many of them working for nonprofit organizations — described a striking difference between the decision-making styles of front-line supervisors or managers and those of successful top executives.

The higher individuals moved up the ranks, the more they tended to make decisions by involving and listening to others, seeking out diverse opinions, and taking longer to analyze options and arrive at solutions.

People on the front lines, those in charge of a department, for example, tended to make decisions in a more hierarchical fashion, expecting subordinates to follow their lead, with the aim of achieving results and getting things done quickly and efficiently.

Fund raisers who become chief executives say their leadership style had to change, much like the executives in the study, to match their new status.

“I had to refine my skills, listen more before offering my own opinions,” says Emily Rafferty, who became president last year of the Metropolitan Museum of Art, in New York, after 28 years in fund raising and other positions there.

“If I look at my prior roles, it was my duty to offer an opinion. Now I’ve become the arbiter,” she says. “My personality is to get right in there, but in my current job it is definitely more useful to let others speak first. The other part is to ask really good questions.”

Other fund raisers say they had to change their priorities and expectations.

“One thing really hard for people coming from development is that you spend a lot of time around the corporate sector,” says Jake B. Schrum, president of Southwestern University, in Georgetown, Tex., and the former chief advancement officer at Emory University, in Atlanta. “It is hard not to think of yourself as a CEO because you have been around CEO’s of companies so much. You have to remind yourself that you are in the business of transforming people’s lives. The goal is not just making the endowment go up.”

When leading an organization, fund raising gets pushed further and further down the agenda, says Karen Brooks Hopkins, a former fund raiser who is president of the Brooklyn Academy of Music, in New York.

“You have to free yourself to think more globally about the institution and its possibilities — without worrying how much it costs,” she says.

“As the fund raiser, I would look at an initiative and think, ‘Where will we get the money?’” says Ms. Brooks. “Now the money is maybe the third thing I look at, after ‘Is it good? Should we do it?’ and then fund raising. You are re-ordering how you look at the world.”

Suzanne Perry contributed to this article.