Nonprofit Succession Planning Ensures Long-Term Success

November 29, 2018 – A board member at a nonprofit shared with me recently what many of us who serve on boards can appreciate, “No one wants to be board chair when the executive director decides to retire or take another job.”

If survey results are an indication, we should either decline that board chair nomination or encourage our nonprofits to begin working on a transition and succession plan.

Many nonprofit organizations enjoy a long, comfortable relationship with their CEOs, but a survey by CompassPoint and the Meyer Foundation shows that about 70 percent of nonprofit executive directors say they plan to leave their positions within the next five years. If that weren’t concerning enough, BoardSource reports that only 27 percent of nonprofits say they have a written succession plan in place.

An executive director change at a nonprofit, of course, affects employees and the board. But it also can influence volunteers, donors, sponsors and collaborators. And perhaps most importantly, it can negatively impact recipients of the organization’s services. Succession planning will help ensure that there is as little disruption as possible when a transition in leadership occurs.

Taking notice of the surveys referenced above and hearing the concerns of nonprofit board members across the state of South Carolina, Together SC this year created guidelines for nonprofit transition and succession planning. Formerly known as the South Carolina Association of Nonprofit Organizations, Together SC exists to strengthen and advance nonprofits, believing that well-managed and responsibly governed organizations lead to stronger, healthier South Carolina communities.

As a board member of Together SC and as manager of nonprofit executive search at FGP, I enthusiastically embraced the opportunity to develop recommendations that will encourage and assist nonprofits in their succession planning efforts. Our plan includes guidelines for a defined CEO departure, along with an emergency transition plan should the CEO abruptly resign or be terminated. A plan that addresses each of these circumstances is critically important.

Departure-Defined Succession Plan

Nonprofit succession planning is designed to ensure leadership continuity in key positions and to retain and develop knowledge, capital and relationships for the future. Board members, the CEO and key staff all play a role in succession planning.

A good first step is for the board to appoint a committee to address issues that will arise with a CEO departure, such as:

Is an interim director needed, or is there talent within the organization to temporarily fill the leadership gap?
How do we delegate authority during the interim?
How can we cross-train staff to assume certain duties during the interim?
What is the timeline for recruiting and hiring a new director?
Who will handle the recruiting and hiring?
Does our onboarding process ensure a quick succession once a new director is hired?

Leveraging their contacts and expertise, board members can play a significant role during a leadership transition. It’s also a good idea for board members to periodically assess the director’s role and, if needed, revise the job description before beginning the search for new leadership.

Executive directors also have a responsibility in succession planning, including the development of key staff and maintaining a culture that encourages professional development. Periodic self-evaluation promotes the succession planning process, giving directors the information needed to hire to their weaknesses. And once a succession plan is in place, directors should review it with key organization staff.

Staff also plays an important role in succession and transition planning since they must continue to provide services to clients until a new executive comes onboard. They also must provide program and operational information to the board during a transition and effectively address public inquiries.

Emergency Leadership Transition Plan

Should an executive director abruptly resign, be terminated or otherwise be unable to lead, the nonprofit board and staff must spring into action to manage the day-to-day tasks that keep the organization running.

An effective succession and transition plan will outline board and staff responsibilities should an unexpected transition occur. These duties include communication, financial oversight, interim management and executive search.

The Board Chair should be the first point of contact in this situation, notifying all board members and discussing next steps. The chair should send a recommended plan of action to the full board for approval. Once approved, the board chair should communicate the plan to staff and to the organization’s key stakeholders.

The Board Treasurer should be the point person during an emergency transition, working with the staff to enable the nonprofit’s business to continue without interruption. In preparation for an unexpected change in leadership, the treasurer should be provided information about the organization’s accountants, financial advisors, auditors and other important financial information upon his or her appointment.

Interim management is another element of succession and transition planning. Is an interim director needed or can a key staff person fill the leadership role temporarily? With interim management in place, the board can determine whether to work with an executive search consultant or conduct the search on their own.

FGP specializes in regional and national searches for nonprofit organizations in need of executive and senior leadership. We work with human services, animal welfare, conservation, education, faith-based ministries and other cause-related and philanthropic charities. Our clients range from major foundations to national charitable coalitions to small local nonprofits. Additionally, we work with quasi-governmental and governmental agencies, and consult with candidates in the for-profit sector seeking to transition into the nonprofit arena.

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