Succession Planning Tips for Nonprofits

Several years ago, a very successful nonprofit Executive Director/CEO passed away suddenly. The organization, including the Board of Directors, was not prepared for what came next. There were two Program Directors who believed that they were the “heir apparent.” For the next two weeks, the organization was in chaos while the two Program Directors fought for their perceived rightful place as the new Executive Director/CEO. The Board was unprepared, but eventually met and made the decision to bring in someone from outside the organization to serve as Interim Director. Eventually both Program Directors left their positions. That organization has not recovered their original reputation and standing since then.

The Executive Director/CEO position in a nonprofit organization is a central element in the organization’s success. Therefore, ensuring that the functions of the Executive Director/CEO are well understood and shared among senior staff and the Board of Directors is important for safeguarding the organization against unplanned or unexpected change. This kind of risk management is equally helpful in facilitating a smooth leadership transition when it is predictable and planned.

It all starts with a policy and a plan. To be prepared for the unexpected or planned transition of the Executive Director/CEO, it is best practice to have a thorough succession plan in place. The plan should include the following:

• Short-term Temporary Absence of the Executive Director/CEO: This scenario occurs in the event of a temporary planned or unplanned absence. Short-term is defined as no longer than 90 days.
• Long-term Temporary Succession Plan: This takes place in the event of a temporary, unplanned absence. A long-term absence is 90 days or more.
• Permanent Succession Plan: This occurs in the event of a permanent planned or unplanned absence. A permanent absence is one in which it is firmly determined that the Executive Director/CEO will not be returning to the position.

The plan should outline for the Board a temporary staffing strategy, including the option of appointing an Interim Executive Director/CEO. It is best practice to name at least two senior staff who might fill the temporary or interim position. The plan should also include how the temporary staff will be paid, how the Board will support that individual during the absence of the Executive Director/CEO, and how the changes will be communicated to the staff and other stakeholders.

In the event that is determined that the Executive Director/CEO will not be returning to the position, the Board will need to consider if they will conduct the search themselves or choose to contract with a professional executive recruitment firm to conduct the search. The Moran Company has a variety of online articles related to this topic. Two examples include Common Questions About Nonprofit Executive Searches and Questions to Ask Search Firms.

A great resource for succession planning is a book called The Nonprofit CEO Succession Roadmap, Your Guide for the Journey to Life’s Next Chapter by Don Tebbe. It outlines important steps for all parties to consider. For example, the Board needs to keep in mind:

• This is not a routine personnel decision. You cannot just run a couple of ads in the paper and do a couple of interviews. You do not want to mis-hire for this position!
• Succession makes people emotional! Both the departing Executive Director/CEO and the team will go through a range of emotions. Careful planning, recognizing those emotions, and having a common vision with clearly defined roles will make the transition successful.
• The Executive Director/CEO impacts the organization’s direction, and viability. Be prepared to research comparable salaries and invest in the position to attract top talent. If there is a need to conserve resources, consider what training opportunities would be available for a less experienced leader who shows tremendous potential.
• A leadership transition is a big change for the organization and the people the organization employs. It is a process of change that needs to be managed so that the staff and stakeholders are not negatively affected. Gathering input and communicating consistently about transition plans, as well as general recruiting progress, will help put everyone at ease. It will pave the way for timely introductions to be made and strong relationships to be built with the new hire.
• The outgoing Chief Executive may be a hard act to follow, especially if they have been with the organization for a long time. Acknowledge this reality and work hard to align expectations between the Board and the new leader to understand what success looks like in the first month and year. Having clear goals and expectations will keep everyone looking in the same direction as the organization moves into the future.

When properly managed, the succession and transition of the Executive Director/CEO can go smoothly, and the organization will thrive. The Moran Company is accustomed to partnering closely with nonprofits as part of their succession planning efforts to recruit the right successors, especially when following in the footsteps of a longtime leader or founder. If we can offer advice or assistance to your organization, please contact us for a free 30-minute consultation.

By Ann Graff, M.A.
Senior Search Consultant
The Moran Company
“We Find Great Nonprofit Executives”