Q&A: Transitioning to nonprofit, lessons from former investment banker running $160M org

BANGKOK — Three years into his tenure at nonprofit Education Development Center, Dave Offensend has had plenty of time to reflect on how his first career shaped his second. The former president and chief executive officer of Lehman Brothers Merchant Banking Partnership, Offensend always saw himself eventually pursuing work in the nonprofit sector; he studied public and international affairs before pursuing a master’s in business. At 50, after founding an independent investment banking advisory firm, and in the wake of a long and successful career on Wall Street, he made the leap. Offensend’s inbox now sees regular requests from other finance professionals hoping to glean the recipe to his success in the nonprofit world. He assured Devex there is no secret. In fact, managing in the nonprofit sector is much more challenging, he shared. After a decade as the chief operating officer for the New York Public Library, a shorter stint at nonprofit America Achieves led him to EDC — an education-focused international nonprofit born in the “post-Sputnik” moment when it was a national defense priority to educate more scientists and mathematicians in the United States. Now celebrating its 60th birthday, the nonprofit counts on 1,400 staff around the world to create curricula and provide policy advisement to improve education. As its president and CEO, Offensend revels in putting both his people and analytical skills to use each day. Currently, he’s focused on improving staff diversity and encouraging innovation. Prior to making his career switch, Offensend had a headstart from serving on several nonprofit boards, he told Devex. But his transition still hinged on knowing his own skills and how they would best translate outside banking. Devex caught up with Offensend to find out what sort of attitude it takes to find success in a new career; just before he headed off the grid to climb Mount Kilimanjaro. The conversation has been lightly edited for length and clarity. You made your transition to your “second career” sound simple, but it's also sort of a scary move, right? How did you go about it? There was a lot I didn't know, and I had to pick the right approach between listening, but also challenging people in saying: Is that really the most efficient way to do that? So I think coming in with a little bit of background — having served on multiple boards — and also coming in wanting to listen, and not assuming I knew it all turned out to be a successful approach. You also mentioned that you have a balance of people skills and analytical skills, how have you found those skills useful in the private sector versus nonprofit worlds? People skills without basic analytical skills only takes you so far. And similarly, the analytical skills without the people skills to communicate and get people behind an idea also doesn't work, and that was true in the private sector as well as the nonprofit sector. Understanding what motivates people and then getting people motivated and communicating is the utmost important goal in either for-profit work or not for profits. And I've worked very hard at that. I imagine what motivated people on Wall Street and what motivates staff at EDC is pretty different. How does that affect how you approach your work? In the for-profit world, everybody knows and agrees what the objective is: Make money. Let’s say I have a meeting and present a problem. Everybody's sitting around saying, well, “there are alternatives” and everybody agrees rather quickly. “We should do A or B or C,” and everybody's arguing for A or B or C on the basis that it will make more money or will make more money faster or something like that. “It's harder to get people to agree on what the right objective is and what the right course of action is. Things take a little longer.” --— Dave Offensend, president of the Education Development Center In the nonprofit world, the goal is not always so crisp and clear — and accordingly, when you get into a room with a bunch of people, there's a tendency to talk about what all the issues are and to identify the possible alternatives, but there's not the simple, crisp lens of “which will make the most money?” As a result, it's harder to get people to agree on what the right objective is and what the right course of action is. Things take a little longer because again, the goals are not as simple as in the for-profit side. Managing in the for-profit sector is frankly, in a lot of ways, much easier because it's very clear what the goal is. What do you usually say to an experienced professional from the private sector looking to make that transition to nonprofit work? I'm always very direct, especially considering people's motivations for wanting to make that change differ greatly. Some think it's a way to kick back and take it a little easy. That's not a good approach. There are those who think they are god's gift to management and believe that they can transform the nonprofit sector. That's not going to work. But some people are absolutely oriented, as I am. And then it comes down to skill set. Do they have general management skills, or a more financial skill set? Should they be an endowment manager at a foundation, a CFO at a nonprofit, or a fundraiser for a nonprofit? And what are the clues for a good fit for those three jobs that you just mentioned? Well, they're very different jobs. I mean, being an endowment manager at a foundation, for example, that's a pretty rarefied skill set and it's about picking managers. I think that somebody who's been in banking or investment banking sometimes sort of think “I could do that.” Well, you might be able to do it, but the reality is that the people at the foundation are much more likely to choose someone who's been in the foundation investment management business for 20 years. So you have to be realistic. But for somebody who has been a chief financial officer in the private sector, making the move to the nonprofit sector, it's not such a big leap if they have the right attitude because the skill sets are very similar. And what is the right attitude? If it's somebody who's thinking “I'm going to do this because it's going to be easy. I'm going to kick back and work four and a half days a week instead of five” or something … bad idea. You really have to come in and say, “I want to put all my energy and work hard at this and make a difference.” So the approach — that's an important thing. Second, is somebody who's really got to have an understanding of how the nonprofit sector works, they have to have some experience serving on boards, serving as a volunteer, or being really involved in an organization, because there is a different ethic and approach to things. And if people are just thinking, “well, I'm just going to come in and, you know, change the strategic plans and put in a bonus system and that's going to make the world change.” It's going to be a disaster. And then beyond that, you've got to find your right path and you have to, on the one hand, listen and be sympathetic and make sure you understand the mission and how things work. But on the other hand, take a hard line. So give me the proof, show me the evidence, use data. Don't just, you know, say, “this feels right” or “we've been doing this a long time.” There is a middle path there.