Can’t Afford an Executive? Hire One Part Time.

Fractional executives — part-time, senior-level leaders who split their time among multiple organizations — have been employed in the tech startup world for years. Now charities and foundations are embracing the model to fill critical gaps in finance, technology, fundraising, marketing, and operations.

The appeal is straightforward: Hiring a C-suite executive on a fractional basis enables you to bring on an experienced leader for a set number of hours a week, capping your organization’s expenses. A full-time CFO or chief technology officer at a nonprofit can easily earn six figures in salary and benefits, but a fractional executive doing the same work on a limited schedule might cost a third of that or less.

The popularity of this form of staffing reflects a trend that has grown in the sector over the past year, particularly among small and midsize groups that have long struggled to compete for top talent. Some nonprofits are hiring fractional decision-makers directly, but search firms that specialize in sourcing them have also started to emerge. 

“This is the future because of the way business is changing and the world is changing,” says Todd Krieger, co-leader of the social-impact practice at the Proper Group, which places fractional executives at organizations. “We all figured out that we could work from home, and now this new phase is figuring out that you don’t need to hire a full-time employee necessarily to fill a particular role.”

The Chronicle spoke to five leaders close to the trend to explore its benefits and drawbacks. Here are the lessons the early adopters have learned.

Part-time executives let nonprofits punch above their weight.

A fractional engagement gives smaller nonprofits access to strategic leadership they otherwise couldn’t swing.

“Small orgs can’t afford that CFO who has a lot of experience and comes at a six-figure salary price tag,” says Jon Hoffmann, director of Elevate NP of Southwestern Pennsylvania, a group that works to strengthen Pittsburgh-area nonprofits. Even midsize and larger organizations find themselves competing with the for-profit sector for top talent, and a fractional arrangement can level the playing field, he says.

Not all executive positions can be filled on a part-time basis. Roles that require a long-term strategic vision or that oversee many employees — primarily chief operating officers and CEOs — can’t easily be done part time.

If you can tap into sophisticated talent, they probably can do [the work] within two or three days a week.

Fractional positions in technology, finance, and human resources are so far the most common, although more groups are looking for part-time executives in marketing and fundraising “if the workload isn’t too much,” says Vincent Robinson, founder of the 360 Group, an executive-search firm for nonprofits and foundations.

This type of work appeals to seasoned leaders who are approaching retirement, want more control over their time, or are looking to use their corporate-sector skills to help nonprofits solve thorny issues.

“Maybe they’re in a different field, and they want to contribute to causes that matter to them,” Robinson says.

In splitting their hours among multiple organizations, fractional executives can make a bigger impact by sharing their expertise more widely. The most skilled leaders also tend to be highly efficient and can meet your needs in less time, Robinson says: “If you can tap into sophisticated talent, they probably can do it within two or three days a week.”

Fractional leaders do hands-on work while helping you grow.

Unlike a consultant, fractional executives roll up their sleeves and handle day-to-day tasks that fuel your organization’s growth.

Krieger spent much of his career in executive roles at Detroit-area nonprofits, including as CEO of First Tee and as a senior leader at the Children’s Foundation of Michigan and the Jewish Federation of Detroit. He made a career shift several years ago to become a fractional executive, most recently at the Pulte Family Charitable Foundation.

The CEO of the $543 million grant maker hired him to expand its Humanitarian Hotels initiative, which provides job training, affordable housing, and education to refugees and other people in need. Krieger used his local nonprofit connections to secure a partnership with Gesher Human Services to employ janitors with disabilities at the foundation’s hotel in Plymouth, Mich.

Realizing other nonprofits could benefit from the fractional model, he joined the Proper Group, where he founded its social-impact practice. “You get that expertise. You get the battle scars, so to speak,” he says. “It’s someone who has lived that experience and sat in the chair and who understands, in this case, the nonprofit world.”

Charities that are just starting up or going through a growth spurt may have short-term needs in specific areas like finance or marketing. Bringing in a team of fractional executives can shepherd the group through that transition, says Libby Coulton, chief brand officer at the Proper Group.

We could bring a whole team in fractionally, and you don’t have to go hire all of those people.

“You might need a CMO, you might need the CFO, you need that level of experience. We could bring a whole team in fractionally, and you don’t have to go hire all of those people,” she says.

Coulton says the Proper Group even helps some clients apply for capacity-building grants from foundations to defray the costs of bringing on fractional executives so that when the engagement ends, “you’ve got the capacity.”

Organizations pay only for what they need.

In a challenging fiscal climate, hiring part-time executives keeps your organization’s personnel costs under control.

“One of the advantages of fractional work is that you don’t have to pay all the overhead for someone who is working for you,” Krieger says. The Proper Group pays its roster of executives directly, so nonprofit clients aren’t on the hook for their benefits.

Shared Financial Services, a program of Elevate NP, specializes in placing chief financial officers in fractional roles at small and midsize nonprofits. In southwestern Pennsylvania, full-time CFOs at nonprofits with budgets of $8 million to $10 million are earning salaries around $120,000. “The organizations we’re working with could never afford that,” says Stewart Urist, its program director.

Shared Financial Services uses a tiered pricing structure that accounts for both the level of service a client needs and its budget. Some organizations only need a fractional CFO as a strategic adviser for a few hours a week, others want full bookkeeping and accounting support, and still others want the full package. 

Within each tier, pricing adjusts based on size and workload, Hoffmann says: “We offer a range of different service packages to help meet organizations where they’re at in terms of complexity.”

Success requires clear boundaries and expectations.

The problems that most frequently arise are time-creep and poor culture fit. To ensure that a part-time executive will work well with the rest of your C-suite team, don’t skimp on onboarding, Robinson warns: “Before you just throw somebody into the pool and ask them to swim, you need to help them understand the pool.”

Tension can arise when a nonprofit requires more time from its fractional executive than originally agreed upon. Outlining the scope of work in the engagement letter is key, but some boundary enforcement will always fall on the fractional leaders themselves, the experts say.

You have to be energized by novelty. There’s a lot of new and change and building in what we do. And that either charges your batteries or it drains them.

Setting limits “is a muscle that we’re building here. Advisory work is most vulnerable to time-creep, because you can always think harder or dig a little deeper,” Urist says.

Beyond competency in their field, the best fractional executives have strong soft skills like communication, discipline, and a customer-service mindset, all of which help them stay organized and build trust while juggling multiple clients.

A good fractional hire will thrive in situations that demand flexibility — getting up to speed with new clients, facing unfamiliar challenges, or building systems from scratch.

“You have to be energized by novelty,” Urist says. “There’s a lot of new and change and building in what we do. And that either charges your batteries or it drains them.”