Retained Search vs. Contingent: What Nonprofits Need

The decision between retained and contingent search isn’t just about payment structure. It’s about whether your nonprofit has access to leaders who aren’t actively seeking jobs, or only to those who happen to be browsing job boards.

When your board decides to engage professional help for an executive director search, one of the first questions you’ll face is which type of firm to engage. Proposals from retained search firms and contingent recruiters can look similar on the surface, but the underlying models produce very different outcomes for nonprofit organizations.

Understanding these differences helps you advocate for the approach that best serves your mission, rather than simply choosing the option that appears least expensive upfront.

Understanding the Two Search Models

Once your board decides to engage professional help, the next question becomes which type of firm to choose.

What Is Retained Search?

In a retained search, your organization enters an exclusive agreement with one search firm. You pay the firm in stages, typically in thirds: at the start of the engagement, at a midpoint milestone, and upon successful placement. The firm dedicates resources specifically to your search and works as a true partner throughout the process.

Retained firms invest significant time upfront to understand your organization’s culture, strategic direction, and leadership needs.

What Is Contingent Search?

Contingent search operates on a different model. The firm receives payment only if you hire a candidate they present. There’s typically no exclusive agreement, meaning you might work with multiple contingent firms simultaneously.

Contingent recruiters are often compensated individually based on placements, which shapes how they prioritize their time and which searches receive their focused attention.

How Payment Structure Affects Recruiter Behavior

The way a search firm gets paid fundamentally shapes how they approach your search.

The Retained Firm’s Investment

When a retained firm accepts your engagement, they commit resources regardless of how challenging the search becomes. Their fee structure allows them to take time doing the work properly rather than racing to present candidates before a competitor does.

Retained firms typically assign a dedicated team, conduct regular progress calls, and provide detailed candidate assessments. Their business model rewards thoroughness, which is one reason the right search partner is worth the investment for executive roles.

The Contingent Recruiter’s Priorities

Contingent recruiters face different pressures. Because they only get paid upon placement, they must balance your search against every other active search on their desk. A difficult-to-find search may receive less attention as recruiters focus on positions more likely to close quickly.

The non-exclusive nature creates additional complications. Multiple firms may contact the same candidates, potentially creating confusion about your organization.

Key Insight: Retained search fees aren’t just paying for candidates. They’re purchasing dedicated attention, confidential outreach to passive talent, and a firm whose success is measured by your long-term satisfaction rather than quick placement volume.

Access to Passive Candidates

Perhaps the most significant difference between retained vs contingent search is the candidate pool each model can access.

Why Top Leaders Aren’t on Job Boards

The most accomplished nonprofit executives are typically succeeding in their current roles. They’re not browsing job postings. These “passive candidates” might be open to the right opportunity, but they won’t find you through traditional advertisements.

Passive candidates often represent the highest-caliber talent available, bringing proven track records and established relationships that active job seekers may lack.

How Retained Firms Reach Passive Candidates

Retained search firms specialize in identifying and engaging passive candidates. Because they have dedicated time, they can conduct original research, reach out through professional networks, and have confidential conversations with individuals who aren’t actively looking.

This outreach requires discretion and persistence. Contingent recruiters, focused on quicker placements, rarely invest this level of effort.

What Retained Search Offers Nonprofits

For mission-driven organizations, the benefits of retained search extend beyond access to candidates.

Deep Organizational Understanding

Retained firms invest time to understand your organization before presenting candidates. CapDev’s executive search services include a Candidate Profile Survey that gathers input from board members, staff, donors, and community partners.

This discovery matters because nonprofit executive roles require more than matching skills to job descriptions. Your next leader must connect authentically with your mission, navigate board dynamics, and represent your organization in the community.

Partnership Throughout the Process

A retained firm becomes a true partner throughout your executive director search. They manage logistics, facilitate stakeholder input, coordinate interviews, conduct reference checks, and support offer negotiations.

This comprehensive support matters especially for boards without recent executive hiring experience.

Key Insight: When evaluating search firm proposals, ask how many other active searches each recruiter is managing. A retained firm’s dedicated attention often means your search stays top priority rather than competing with dozens of other open positions.

CapDev has partnered with nonprofits across the Southeast using this relationship-centered approach.

When Each Model Makes Sense

Understanding when each model fits helps you make informed recommendations to your board.

Choose Retained Search When…

Retained search is appropriate for executive director and senior leadership positions. Consider it when your organization needs access to passive candidates, when confidentiality matters, when your board lacks recent executive search experience, or when cultural fit is critical.

Leadership transitions bring real challenges to nonprofit organizations. As explored in a recent Nonprofit Everything podcast on succession planning, these transitions surface worries about timing, board dynamics, and organizational continuity. When transitions happen unexpectedly, retained search provides the structure many boards need.

Organizations benefit from recognizing early signals that it’s time to begin their search and determining which model will serve them best.

Consider Contingent Search When…

Contingent search may work for positions below the executive level, particularly roles with abundant candidates. Some organizations also consider hybrid or “engaged” search models that combine elements of both approaches with smaller upfront fees.

Questions to Ask When Evaluating Search Firms

When you receive proposals, these questions help you compare options fairly:

About their approach: How will you learn about our organization? What does your discovery process include? How do you identify passive candidates?

About their commitment: Will you work exclusively on our search? How many other searches is the assigned recruiter managing?

About their expertise: What nonprofit experience do you have? How do you assess mission alignment?

Red flags to watch for: Be cautious if a firm promises unrealistic timelines, seems reluctant to explain their process, lacks nonprofit experience, or pressures you to decide quickly.

Frequently Asked Questions

What happens if a retained search doesn’t find the right candidate?

Reputable retained firms stand behind their work. Most offer guarantees that extend the search at no additional fee if needed. Some also provide replacement guarantees if a placed candidate leaves within a specified period. The firm’s reputation depends on successful placements, so they’re motivated to keep working until you find the right leader.

Is retained search too expensive for smaller nonprofits?

Budget concerns are legitimate, but the cost of a wrong hire often exceeds the fee difference between models. Some firms offer candidate sourcing services at lower cost than comprehensive retained search, helping organizations build their candidate pool while managing some responsibilities internally.

Can we use contingent search for our executive director position?

While technically possible, contingent search is generally not recommended for executive roles. The position’s importance, the need for passive candidate outreach, and the complexity of assessing mission alignment all favor the retained approach.

How long does each type of search typically take?

Retained searches for nonprofit executives typically take four to six months. Contingent searches may present candidates faster initially, but timelines can extend if early candidates don’t work out. The retained model’s thoroughness often produces better outcomes more predictably.

What is engaged or hybrid search?

Engaged search combines elements of both models. You pay a smaller upfront engagement fee, with the remainder due upon placement. This can work for organizations with budget constraints who still need dedicated search support.

Making the Right Choice for Your Mission

Choosing between retained and contingent search is strategic, not simply financial. For nonprofit executive roles, retained search aligns your search partner’s incentives with your need for thorough, mission-focused recruitment. The investment buys access to passive candidates, deep organizational understanding, and partnership throughout the process.

Your board’s leadership throughout the transition sets the tone for your organization’s next chapter.

Ready to discuss which approach fits your organization? Connect with CapDev’s team for a confidential conversation about your executive search needs.

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