Maintaining Funding Relationships During a Nonprofit CEO Search

by Paul Gemeinhardt, M.S.W.
Advisor to The Moran Company
The Moran Company  “We Find Great Nonprofit Executives”

Donors contribute to a nonprofit because they believe in the agency’s mission, but they feel more comfortable when they have developed a trusting relationship with the Executive Director or CEO. This is because they feel confident that he or she will be a good steward of their gift. They may choose to give more freely and more significantly because of their personal connection to leadership.

So what happens when a nonprofit Executive Director/CEO resigns or retires? We often talk about the internal steps that Board and staff members should take to prepare for their nonprofit executive search. Yet it is equally important to consider how to engage with external charitable supporters throughout this critical transition so they have the chance to continue or establish a trusting relationship with the organization’s next leader.

How you choose to manage funding relationships during this time can lead to risks – or benefits – to your organization depending on whether you approach the situation as a challenge or an opportunity. If you do not communicate with charitable partners about the changes taking place, it can lead to decreased funding as their sense of connectivity decreases. On the other hand, if you take the opportunity to engage them in conversation throughout the search process, these interactions can lead to a stronger relationship with your organization – including your new Executive Director.

In fact, an executive search is one of three pivotal opportunities a nonprofit has during its lifecycle to engage supporters in the success of their next chapter. Organizations should recognize the importance of these turning points in their histories and include stakeholders in the process. Critical opportunities to increase communication with funding partners include the following:

• Significant Changes to Programs or Projects
• Mergers and Acquisitions
• *Nonprofit CEO Search*

Each of these areas gives the nonprofit a chance to have a new conversation or interaction with a funder that is not about a request for dollars. At the same time, it gives the funder a way to learn more about the organization’s goals and leadership, which provides greater assurance that the agency will be a good steward of any donation or grant it might receive. Thus, the relationship is established upon more than just gifting.

The search for a new Executive Director/CEO offers at least 5 different opportunities for a nonprofit to have meaningful conversations with funding partners without ever asking for money. After all, sharing advice and expertise is another great way for supporters to contribute beyond financial gifts. The following interactions can yield priceless information and can help a nonprofit maintain key relationships with donors and funders before, during and after the hiring of a new Executive Director:

1. At the very beginning of the search, personally contact funding partners to let them know about the upcoming change in leadership. They appreciate hearing the news firsthand from appropriate Board or staff members. The best timing for this initial notification would be after all Board members are aware of the news but before the announcement is made public. (“Because you have been an important supporter of our organization, I wanted you to be among the first to know about an upcoming leadership transition. When we are further into the search, I would appreciate the chance to share specific qualifications and gather your feedback…”)
2. During the first few weeks, interview them to gather valuable insight that will aid the search:
   • Discuss ideal attributes, skill sets and qualifications being considered for the next hire. Share your thoughts based on the current environment and future trends, and ask for feedback.
   • Ask who else we should be contacting – to find top candidates or trusted resources that can lead us to candidates. Their suggestions can help identify qualified individuals within or outside the community who are not actively seeking a new position.
   • Get their perspective about key questions we should be asking potential candidates. They may or may not have suggestions, but this allows them to be part of the process.
3. Request their participation in a brief survey (if there are plans to poll community stakeholders for input prior to the recruitment phase of the search). This step can be helpful to gather more details about the areas discussed above for #2. The Moran Company leads this type of survey when partnering with nonprofit clients for executive search services.
4. At the conclusion of the search, let them know who has been selected for the role. Ideally this conversation happens confidentially before a public announcement is made. This step closes the communication loop and demonstrates gratitude for their special involvement in the process.
5. After employment begins, introduce the new nonprofit CEO or Executive Director. By keeping the door open to conversations with funding partners throughout the search process, it is easier for the new leader to build on those relationships without missing a beat.

Although you’re not asking for a financial gift, personal interactions with decision-makers throughout the search process can still lead to conversations about funding opportunities in the future. There could be grants available to aid transition efforts, to retain a search firm, or to build capacity. Either way, key partners will feel invested in the next chapter of your organization’s success.

So who should be contacted and by whom?  The outgoing CEO may be able to help build a list of important funders alongside Board members and development staff. Charitable partners might include individuals, companies or foundations that have made major gifts (based on however the organization defines that amount). Other contacts might include revenue sources or influencers in the community who would be willing to share their connections and perspectives. The staff member or Board member with the strongest relationship to each person on the list should initiate the conversation or make appropriate introductions.

By taking the time to stay in contact with key funders throughout a leadership change, you will be able to maintain and even strengthen those important relationships for your organization. You might even discover new resources that can aid your transition. Best of all, you will be able to set the stage for the new nonprofit CEO or Executive Director to be introduced smoothly through a door that has already been opened.

If we can assist your organization or association with its next nonprofit executive search, please contact us for a free 30-minute consultation.

© 2018 The Moran Company, “We find great nonprofit executives.” We specialize in searches for nonprofit executive directors, directors of development/fundraising staff, and other top nonprofit leadership. www.morancompany.com