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Nonprofits turn to recruiters

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By Solja Nygard Frangos

Instead of spending hours reading resumes and conducting interviews, a growing number of nonprofits are paying search firms to recruit executives.

Nonprofit searches handled by professional recruiters grew 10 percent in 2001 from a year earlier, despite weaker demand overall for the executive-search industry, according to the Association of Executive Search Consultants, a professional association of more than 160 firms worldwide.

Increased expectations by boards and donors for senior staff are prompting nonprofits to seek help finding qualified candidates, says David Hinsley Cheng, managing director of the Development Resource Group, a New York-based search firm specializing in nonprofits.

Nonprofits also use search firms because of the time involved in identifying and recruiting competent candidates, recruiters say.

Valeria Lee, president of the Golden Leaf Foundation in Rocky Mount, N.C., for example, wanted to see dozens of resumes before filling senior staff jobs but could not spare the time to screen them herself.

So the foundation, which will get $2.3 billion from the massive settlement between 46 states and the tobacco industry, hired a professional recruiter to find candidates and handle preliminary screenings and interviews.

The foundation then used its own five-member search committee to interview top candidates.

Yet search committees also may not be able to dedicate a lot of time to preliminary work, says Hoyt Phillips, search committee chairman for the United Arts Council in Greensboro, N.C.

The council last fall hired Anderson & Associates, a Charlotte-based executive-search firm, to find a new president.

The firm contacted about 360 people and conducted more than a dozen in-depth interviews before recommending 10 candidates for search-committee interviews, says Phillips.

Rebecca Worters of Capability Company, a search firm in Raleigh, N.C., that specializes in nonprofits, says there is a difference between “the people you get by placing a newspaper ad and those who are actively recruited.”

With search firms typically charging one-third of what the job will pay for the first year, she says, nonprofits worried about fees should calculate how much it costs to advertise and how much time a staff member has to spend on the search.

Nonprofits also should factor in both the cost of a bad hire and the possible erosion of donor confidence if the search drags on, Worters says. 

But for the Winston-Salem, N.C., office of the New York-based Local Initiatives Support Corporation, a neighborhood redevelopment group, search firms simply are too expensive, says Teri Beckman, program director.

So when LISC, with an annual budget of about $670,000, needed a development officer last fall, it was Beckman who plowed through 200 resumes.

“Using a search firm would have either taken money away from something else,” she says, “or forced us to raise more to cover the cost.”

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