Nonprofit Succession Planning Made Easy

Even though the responsibility for sustainability and leadership transition lies with the board of directors and the organization’s leadership, succession planning is often lacking in nonprofit organizations. If your organization is embarking upon succession planning, watch GRF’s webinar, Nonprofit Succession Planning Made Easy with Nonprofit Leadership Transition Expert Don Tebbe. In the presentation, he explains how nonprofits can set up a board-adopted succession policy with a step-by-step guide and easy-to-use templates.

July 10, 2020

Has your not-for-profit anticipated a shake-up at the top? If not, it needs to. Perhaps your long-standing CEO will decide it’s time to retire. Or maybe your board will determine that your current leader is ineffectual. Or perhaps your organization will agree to merge with another nonprofit or undertake a restructuring that requires a leader with a different skill set than that of your current executive director.

To deal with scenarios such as these a not-for-profit needs a succession plan. Unfortunately, not all have one — not even close. Research by management consultant BoardSource shows that only 27% of U.S. nonprofits have a written executive succession plan. If your organization belongs to the other 73%, it’s time to take action.

Smooth Succession

Leadership transitions can be delicate processes. Generally, they require executives to balance organizational needs with their own personal needs. It’s easy for a nonprofit’s stakeholders to get lost in the mix. That’s where succession plans come into play. No plan is perfect and there are no guarantees that you won’t encounter unanticipated obstacles. But a reasonably comprehensive plan can help your departing leader and a transition team (that might include management, board members and professional advisors) focus on what’s important.

The plan should cover everything you feel is important given your mission, size, financial situation and other variables. But we recommend that you:

  1. Document strengths and risks. Your transition team should start planning for a leadership succession by listing all “knowns,” such as your nonprofit’s charitable mission, and “unknowns,” such as the impact future developments might have on that mission. Then, the transition team should enumerate the challenges a new leader will likely face and how your organization will address them.

All of this requires an honest and thorough assessment of your organization’s strengths and weaknesses. You don’t have to perform it all internally. In fact, you may want to engage an outside expert to interview employees, board members and other stakeholders, and to make objective assessments.

  1. Think about the future. When searching for a new leader, focus on finding the best person for your nonprofit’s future, rather than on replacing the executive who’s leaving. Of course, you’ll want someone who shares some of your departing leader’s qualities. But you should also think about the skills and experience a leader will need as you implement new plans. For example, if you intend to establish an endowment, do you need a proven fundraiser at the top? If your mission is shifting, would it make sense to hire a world-class communicator to keep stakeholders on board? Once your transition team forms a consensus, begin interviewing candidates.
  2. Set the tone. Your current chief executive sets the tone during a leadership succession. He or she should encourage staffers to cooperate and to maintain a positive attitude — even if they don’t agree with all the decisions being made. It’s also important for departing executives to work as closely as feasible with their successors during the transition period. This includes transferring valuable institutional knowledge that isn’t necessarily written down.
  3. Clarify your board’s role. Your board of directors will be instrumental during any leadership transition, but the specific tasks they perform may vary. However, in most cases, boards work with the succession team to:
  • Define key leadership characteristics,
  • Use their networks to find and attract top candidates,
  • Interview and assess job applicants,
  • Provide transition planning for board members and staff,
  • Coordinate orientation of the new hire, and
  • Support the new leader throughout the transition process.

Whatever role board members play, it’s important that they work with, not against, employees and other stakeholders involved in the search and transition process. Communication during this time is critical.

  1. Engage the rank-and-file. During a succession, it should be all-hands-on-board. Senior staffers can help provide continuity when a new leader takes control. In fact, your organization may want to appoint a “senior advisor” to assist the newly hired executive through the first few months on the job. Other employees may be required to help lift the load of such senior staffers by assuming new responsibilities.

Don’t Wing It

There’s a lot at stake during leadership succession, so don’t take planning responsibilities lightly. At the very least, outline the immediate steps you’ll take if your top executive decides to vacate the position. The last thing you want to do when succession become necessary is to wing it.

© 2020