Leading a not-for-profit organisation after leading a for-profit organisation

If you are a leader in a for-profit organisation searching for a role that differs from what you have done before, you might consider leading in a not-for-profit instead.

It is a change that can be worthwhile, but if you desire to take this next step, there are some things you might want to know first. 

Different purposes, same work

In many ways, not-for-profit and for-profit organisations are very similar, including in the work done by a leader.

However, The For-Purpose Alliance – formerly The NonProfit Alliance – Chief Executive Officer and Founder Carmel Molloy said there was one crucial difference between the two, which could make the switch between them appealing.

“If you look at a for-profit business versus a not-for-profit, there’s a key difference,” she said.

“A for-profit business makes a profit that can be distributed to owners, to individual members and to shareholders – people involved in the business are entitled to receive personal benefits from the profits of the company or the organisation.

“A not-for-profit organisation exists to fulfil a charitable purpose for community benefit, so any profits or money made is reinvested in the organisation to provide products and services to assist the beneficiaries they serve.

“They exist to make the world a better place.”

Though Ms Molloy noted many commercial companies also had a social conscience, she said a core focus on social impact made working at a not-for-profit organisation fulfilling.

“It’s not the easiest of jobs to take on but it is so rewarding,” Ms Molloy said.

“It is knowing that you are making a difference – that you're doing something to give back to the community in a big way.

“This is your driving force and purpose.”

St John WA Group Chief Executive Officer Kevin Brown FAIM agreed, saying this is precisely why he took on his current role.

With over 20 years of experience in corporate, operational and commercial roles, Mr Brown said there are many similarities between profit and not-for-profit businesses, as every organisation must remain sustainable and profitable to continue providing their services.

“Not-for-profit organisations are not exempt from monetising their services,” Mr Brown said. 

“It is often a leader’s job to help in this aspect, regardless of the sector.

“If organisations don’t have a healthy bottom line, they can’t reinvest in the business.

“If it’s a for-profit business, you would be giving back dividends, whereas in this organisation [St John WA], our profits go towards expanding the whole community, including the health and wellbeing of its members. 

“If you’re not doing what you’re doing successfully, you can’t reinvest and you can’t be sustainable." 

“So, whether it’s a profit or not-for-profit business, the fundamentals are the same.”

The unique challenges of leading a not-for-profit organisation

Though the nature of the work itself may be mostly uniform, Ms Molloy said switching from leading a for-profit to a not-for-profit had its challenges.

“It’s actually a tough job, and often you’re trying to do that job with less,” she said.

“You’re trying to do more without the huge staff behind you, as charities often operate on limited resources.

“Much as we try to look after our people, we don't pay the huge salaries of a commercial entity.”

Ms Molloy said not-for-profit leadership positions could also come with certain complexities not encountered within other sectors.

“There are legal and ethical obligations that must be met by not-for-profit organisations, because you’re receiving money from the government, donors and the public for the work they do,” she said.

“There’s a responsibility to make sure you’re spending the money in the most careful and considered way, and that you are creating an impact through the work you’re doing.”

Knowing if the switch is right for you

Making sure a prospective new job is the right one for you is always crucial, and it is especially important when considering moving into the not-for-profit sector. 

Mr Brown said, as with any new job, when planning to switch to a leadership role in a not-for-profit organisation you should do some research first, including what you desire for your career path as an individual.

“I’ve always researched extensively about new roles before taking them on to make sure I understand what the organisation is all about – what it does, what its focus is and who is involved in making the business tick,” he said. 

“Whether it’s a not-for-profit or any business, you want to understand the ins and outs before challenging yourself to see whether you can add some value to the process or you are just going to come and keep the seat warm.

“I recommend questioning if you are the right person for the job and if you are doing this for the right reasons.”

Ms Molloy echoed this sentiment, saying doing your homework is vital, especially as the not-for-profit sector grows and each organisation has its own unique aspects.

“Look at what organisations are out there, what social purpose they are delivering, what size the organisation is, what sort of revenue it’s bringing in and where its money is coming from,” she said.

“Go and research any charity you might be considering and think about the area of the sector you want to work in – ask yourself where your purpose and passion lie. 

“Speak to people who are in those roles now to get an understanding of what they see as the benefits and challenges of working in the sector.”

Where to from here?

Hear more from Kevin Brown at AIM WA’s Not-For-Profit Leadership Summit on 18 March, where he will join fellow industry leaders to explore the evolving challenges and opportunities shaping the not-for-profit sector.

This unmissable event will unlock the innovative and practical strategies required to strengthen governance, drive sustainability, and ensure long-term success within your organisation.

Reserve your place