Welcome to our blog

...where McKinley Carter advisors and journalists from highly-respected publications discuss the wide range of forces and factors impacting our clients’ total financial situation – now and in the future. Start with our featured posts below or search by post topic.

How Just Two Words Can Strike Fear into Nonprofit Board Members

nonprofits

Two words — Succession Planning — can easily conjure images of Harry Potter’s nemesis Voldemort (“He who shall not be named!”) like nothing else for nonprofit boards.  But tossing an invisibility cloak over your head will not make the need, or the urgency, of succession planning disappear!

Why do organizations have difficulty addressing Succession Planning?
Who among the Board wants to ask the current leadership about their intentions to depart? Most would rather be turned into a toad!  According to Board Source, a nonprofit Board support firm, only 34% of their surveyed nonprofit boards have a written succession plan.  So if you don’t have one, you are not alone! In a majority of nonprofit organizations, the day to day management and lists of concerns is so long, that succession planning doesn’t even make the list.

Often the strong passion that propels a leader through walls to deliver on the nonprofit’s mission, is the same passion that causes apprehension over letting go. But until a crisis, a health concern, or the reality of retirement arises, the topic of succession lurks in the background never to be unveiled. If no plan is in place, there very well may be some sleepless nights ahead for the board and staff.

What are the risks to your key stakeholders when there is no Succession Plan?
While the Board oversees numerous plans to insure the financial health of a nonprofit organization, leaving leadership planning unaddressed could have drastic impacts on the organization’s key stakeholders: the staff, funders, and the community served.  While the depth of the risk may vary dependent on the organization’s size, the following scenarios may play out as the Board scrambles to find the right person for the role:

Staff Scenarios:

  • Reduction in Productivity: The staff may be unsure who to look to for direction and may fill the void themselves with the potential to create a more political vs. productive culture.
  • Loss of institutional knowledge: Years of experience can evaporate into thin air.
  • Increased Turnover: Employees may seek other opportunities to avoid association with a “sinking ship”.

Funders Scenarios:

  • Change in Direction: There may be a growing concern among the major donors regarding a change in organizational direction that may be inconsistent with their vision.
  • Voids in Relationships: Relationship continuity may suffer along with the access to valuable support from donors.

Constituents Scenarios:

  • Loss of Faith: An organization’s ability to serve its constituency at the level at which it has become accustomed may be challenged as the search for the new leader progresses over weeks and months.
  • Partnership Questions: Long-standing partnerships may be at risk with leadership change.

How can you avoid a Succession crisis in your Nonprofit?
While borrowing Harry’s magic wand would be much easier, there is no time like the present for the Board and senior leadership to take a few foundational steps to address a leadership void before it approaches crisis levels. While an organization’s size and timeline for a change may vary, the succession planning process can begin with these fundamental steps:

  1. Have the Conversation. An honest discussion between Board Leadership and your senior leadership is the best path for all involved no matter how uncomfortable.  Understanding potential timing can insure that you can prepare. Additionally, senior leadership involvement in the process will enable them to feel more comfortable about relinquishing control knowing that  their passion for the organization’s sustainability is shared by the Board.
  1. Add Succession Planning to your Board Agenda. Having the discussion to identify the risk, both in terms of timing as well as available internal resources, before an urgent need arises is ideal. An annual leadership evaluation can include some of the big questions: How long does the current leader plan to continue? Are there potential internal candidates?
  1. Assess Talent and Address Skill Gaps. Requesting senior leadership to assess the organization’s talent and how they stack up against the skills set of the senior leadership provides a true gauge of the organization’s readiness for change. Based on that assessment, are there internal candidates that meet the need?  If not, can the skill gaps be addressed through further experience or training, and is there time? Or, do you need to begin executing an outside recruitment strategy?
  1. Identify Candidates. Identifying a short list of internal candidates who, with support, education, and direction, may be able to assume a greater position is the next step. If your options are limited, initiate a search. In both cases, input from your current senior leadership, prior to their departure, is essential. Depending on the organization, the role of the current leader in the selection and interview process would be at the discretion of the Board.
  1. Onboarding a New Leader. A gradual transition of leadership with the departing leader supporting the new leader is ideal. This limited “joint” leadership team can manage and transfer relationships with key stakeholders facilitating a structured “hand off”. 

Succession planning doesn’t have to create nightmare for the Board that rivals Harry’s battle with Voldemort.  Taking a few proactive steps will enable your organization to begin the necessary process to, not only prepare for leadership change, but to build future “bench strength” within your organization.

← Posts