I decided to become the CIO of a not-for-profit enterprise after a number of years as a CIO in the semiconductor and software industries. By that time, I had enjoyed attractive salaries, stock options and other perks in the private sector -- but I was open to trying something new that required less time away from home. I accepted a job as a CIO of a not-for-profit credit union with the hope that I could “give something back” from what I had learned through the years -- and I soon found I was not the only CIO making this transition!
In the process, CIOs who migrate from the private to the public sector hope to make a difference for others in a public sector role, but they also discover that it is very different to run an IT department in a not-for-profit organization.
For those private sector CIOs considering the move, here are several important differences you are likely to find if you make the decision to move to a not-for profit entity:
1. Limited on-staff resources
Non-for-profits typically have tight budgets and can't afford to pay the going rates for top IT talent. Consequently, not-for-profit CIOs must consider in-house training of existing employees and in some cases, retaining outside consultants on a short-term basis to assist with more difficult projects.
The good news: Not-for-profits are much more likely to embrace robust training budgets than their counterparts in the private sector. Many not-for-profit leaders have come from humanitarian and educational backgrounds. They don't have to be sold about the necessity of investing in education, nor are there likely to be heated arguments with CFOs who view training as an “extra discretionary expense” that can be eliminated from budgets.
2. Hesitancy to spend on longer term IT capital investments
Not-for-profits depend upon donations, grants, and endowments. In themselves, they are not revenue-producing like private sector companies. Understandably, there is great hesitancy to make multi-million-dollar investments in data centers, equipment, communications lines, etc.
The good news: Not-for-profit organizations are far less competitive than companies in the private sector. Not-for-profits will cooperatively band together to share a major capital IT expense. This renders the needed IT upgrade affordable for everyone.
3. A spirit of cooperation
Because many non-profit organizations function with limited resources, there is an enormous amount of cooperation among them when it comes to IT resource sharing. Sometimes, this can lead to not-for-profits getting onto IT trends before the private sector ever does.
For instance, not-for-profits like credit unions began system cost-sharing and resource-sharing with the cloud as early as the 1980s. In this cost- and resource-sharing model, one very large credit union would purchase an online banking system, and then other credit unions would sign on as paying clients and pay for the system resources that they used.
The good news: As a result, the capital and operating costs of the larger, sponsoring credit union decreased and the other smaller credit unions were able to afford online banking capability that they otherwise would not have been able to pay for.
4. Emphasis on policies, procedures, and security
When I first joined a not-for-profit organization, I chafed at the number of “rules” and procedures that had to be applied and vetted for every IT project because I was coming from an entrepreneurial technology environment that had been fast-paced and less concerned about procedures than developing new projects and products and getting them to market.
In the not-for-profit world, Robert’s Rules of Order is still widely used as a guideline as to how businesses and boards should be appropriately conducted, and every IT project is vetted for procedural and policy conformance before it gets started.
The good news: As we experience surges in malware and ransomware, the not-for- profits tend to be ahead of for-profit organizations in securing their IT and assuring privacy and security for their stakeholders and clients.
5. Volunteer boards
It is typical for not-for-profits to have volunteer board members who are not monetarily compensated for their service. Because these volunteers may have limited knowledge about IT, it can be difficult for CIOs to explain the technology behind the projects they want to get approval for.
The good news: Many of these board volunteers understand their educational limitations. If a project sounds reasonable and is affordable, board members are likely to place faith in their CIO to steer the organization in the right direction.
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