It’s unfortunate that sometimes impatient business people get involved with nonprofits and immediately bark out a list of ways nonprofits need to be “run more like a business.” I have too much respect for the complexity of what these organizations are trying to accomplish to think in those simple terms.

I served as CEO at a major Silicon Valley semiconductor equipment company for nearly three decades. And I’ve worked with nonprofit organizations for even longer. I often think about the differences in managing each type of organization. I’ll look at some of them.

All CEOs need an ability to learn and grow faster than the world around them. But nonprofit CEOs have to keep learning in two directions at once: tracking both the changing needs of communities they serve and also the shifting landscape of philanthropy that funds their work. Similarly nonprofit CEOs have a more complex stakeholder ecosystem, with a board, donors, staff, volunteers, partners, and, of course, the community they serve.

While there’s tremendous pressure on for-profit CEOs to respond to the demanding quarterly financial reporting cycle, nonprofit executives are always balancing short-term impact against long-term organizational health.

Neither job is easy. But I wonder which is more difficult.

  • Do nonprofit executives face challenges above and beyond the private sector?

  • How do you prepare yourself for the unique challenges of nonprofit management?