“Replace fear of the unknown with curiosity” – Albert Einstein
The transition and retirement of nonprofit executives is a major challenge facing the philanthropic sector. Many executive directors came of age in the 1970s and 1980s and spent their careers working to bring about change in the nonprofit arena, and now decades later, these professionals are beginning to retire or at least slow down.
The next generation of nonprofit leaders perceive their professional life differently than those who preceded them, exploring various opportunities to advance their careers, increase their financial security, secure work-life balance or add greater happiness to their lives. America’s work environment is shifting, where according to the Department of Labor, the average person will change jobs five to seven times throughout their career and by age 42, most workers have held 10 jobs.
The Experience and Tenure Study by Compass Point discovered the average tenure for a nonprofit executive director is 6.1 years and 60% of them anticipate changing jobs in the next three to five years. Their research found that 56% leave due to burnout while 55% leave for professional growth opportunities. Fewer than one-third of executives discuss their future with their boards and less than 60% of nonprofit boards have a succession plan.
Transitions present a pivotal moment in the life of a nonprofit organization and can become a serious challenge or a tremendous opportunity. Don’t begin your succession plan when the Executive Director leaves the organization.
The Role of the Board in Succession Planning
Honest communication between the board and the executive director is critical for the health of a nonprofit. Yet it is common that Executive Directors are afraid to be transparent about their future for fear of losing their sense of power. It takes courage to assume responsibility for the succession plan.
The board should address how to retain staff. That may require increasing line items in the budget next year to provide adequate resources. Review compensation and benefits for similar, local nonprofits to validate your organization’s competitiveness. Benefits have become as significant as salary in negotiating positions and yet a surprisingly small number of nonprofits provide adequate health benefits or retirement. As a board member, ask yourself would you be willing to take a position with the same retirement or benefit page the nonprofit is offering?
The Role of the Executive Director in Succession Planning
The Executive Director should participate in a self-evaluation process to reflect upon his or her personal vision, mission and timeline for the next five years. Several questions to consider include:
If the Executive Director is beginning to experience burn out, speak to the board chair. Discuss possible solutions to eliminate stress that might include time off, a sabbatical or personal development. The lines of communication between the board chair and Executive Director must remain open and honest without fear of reprisal.
In addition to a formal succession plan, the Executive Director should have an updated Emergency Succession Plan, better known as the “If I Were to be Hit by a Bus Tomorrow” plan, that addresses short and long-term situations. It includes key leadership functions and an ongoing list of tasks performed on a daily, weekly, monthly, and quarterly basis; competencies, skills and talents of existing staff to take over in case of an emergency; policies and procedures for the temporary appointment of an Interim Executive; a defined chain of command; key relationships with donors, stakeholders and vendors and a plan for a 30-60-90 preliminary transition.
Armstrong McGuire would be happy help develop a Succession Management Plan, Emergency Succession Plan, or a Transition Plan for your organization.