Enactus begins search for new CEO

Rachael Jarosh is leaving her CEO position in June.

Springfield-based Enactus, an international academic and entrepreneurial nonprofit, is searching for a new CEO and transitioning into its next phase following unexpected growth in 2020.

CEO Rachael Jarosh plans to step down in June from the position she’s held since 2016. At the time, she succeeded 30-year Enactus CEO Alvin Rohrs and committed to a multiyear restructuring plan.

“It’s really just the right time for the organization,” Jarosh said. “I think the next phase of growth for Enactus is a four- to five- or six-year endeavor, and I could not make another five-year commitment for a number of reasons.”

Jarosh said the organization recorded a surprising jump in participating students in 2020, with numbers rising to 500,000 from 72,000 students in 2019. Enactus currently works in 35 countries with participants from 1,730 campuses.

“We had a huge surge in growth last year through the pandemic, which is a really interesting phenomenon,” Jarosh said. “While so many of us were really sad and overwhelmed by what was happening with the pandemic and its economic impact, we saw thousands of young students reaching out to us because they saw Enactus as a way to do something good to help their communities.”

Students in Enactus programming work to solve social issues by engaging entrepreneurs or businesses in their markets.

Making adjustments
Being education focused, Enactus had to adjust its programming as schools began remote learning during the pandemic. Jarosh said Enactus’ virtual learning models allowed more students to participate.

“Even when they were displaced, and their job prospects and summer internships were drying up, they stayed really focused on their work,” Jarosh said. “They transformed what they were doing in communities, and we transformed how we worked with them.”

All Enactus programming moved online and new virtual programs were added to Enactus’ profile. In the summer, Enactus introduced a virtual cultural exchange hosted by The Aspen Institute, an international nonprofit focused on the creation of an equitable society.

Students in the United States and Morocco worked together to solve social issues that exist in both countries while learning about each culture, Jarosh said.

While Enactus reports overall student participation is up, participation has decreased in at least two Springfield-area colleges in recent years.

Rowena Stone, secretary to the Missouri State University Board of Governors and Enactus team adviser, said the program is currently inactive on MSU’s campus.

The program had been struggling for a few years due to leadership turnover within the U.S. division of Enactus, leading to criteria revisions and the discontinuation of project partnerships or accelerators, which were project grants available to teams. Stone said MSU teams relied heavily on those funding sources for their projects.

J. C. Walker, department chair of business, accounting and economics at Ozarks Technical Community College, said OTC has not had an active Enactus team for the past two years.

Evangel University spokesperson Erin Hedlun said the university’s chapter is still active and popular among students, especially in the business department.

As the pandemic hit, Jarosh said Enactus leaders were concerned about the organization’s future.

According to nonprofit ratings site CharityNavigator.org, Enactus has a 75.9 score on a 100-point scale based on fiscal 2019 data, the most recent available from IRS tax filings. The organization’s financial score is 65.87 on a 100-point scale.

Enactus’ fiscal 2019 revenue was nearly $5.1 million, while total functional expenses were almost $8 million, giving the organization a financial deficit of approximately $2.8 million, according to the site.

Jarosh said the downward trending financial rating was expected as a result of the organization’s recently completed multiyear reorganization

A key part of the plan, started in 2016 when Jarosh came on board, was restructuring the organization’s budget. Enactus previously reported operations in five countries in its financials. The restructuring moved four country operations’ financials to the organization’s independent affiliate network of 35 countries, leaving only the U.S. branch of Enactus and the global headquarters reported in U.S. finances.

“That restructure meant that those country operations’ budgets no longer rolled up into the Enactus budget, thus an overall decrease in reported revenue,” Jarosh said. “That decrease, combined with the debt that Enactus has carried for more than a decade, meant that as we restructured, our finance rating declined, and we knew that would be the case.”

The last steps were to pay off debt and establish over $1 million in cash reserves. Jarosh said the organization expects to see its financial rating at Charity Navigator improve once its 2020 Form 990 is filed.

Jarosh said the organization’s networkwide revenue is roughly $23 million. Enactus also has set a public goal of reaching 1 million students by 2025.

New leadership
Several members of Enactus’ Board of Directors make up a search committee tasked with finding Jarosh’s successor. Board member Jim Brennan, managing director of Boston Consulting Group, chairs the search committee. Enactus also has engaged Chicago-based executive search firm Spencer Stuart.

Brennan said they are still in the early stages of the process. A job description has been developed and the committee and Spencer Stuart are working to identify potential candidates. Brennan said the firm is only assisting to identify candidates and will not be involved in the interview or selection process.

The president and CEO role was compensated roughly $372,000 in 2019 salary and bonuses, according to Enactus’ latest Form 990 on file with the IRS.

Jarosh said the transition has been a planned process with the Enactus board.

Also in February, Enactus announced the hiring of Christopher Smith as its new chief financial officer. Smith joins Enactus after serving as CFO for online giving nonprofit GiveGab Inc. He succeeds Christine Rader, who exited in October.