Building a Legacy: How Succession Planning Ensures Nonprofit Sustainability

Strong nonprofit organizations achieve their goals through the work of talented staff members. However, turnover in leadership positions, such as CEO and board members, is a fact of nonprofit operation and threatens an organization's efficiency. In a February 2024 report, Challenger, Gray & Christmas, Inc. reported 42 CEO exits from nonprofit organizations in January 2024, a 167% increase compared to January 2023. With this in mind, nonprofit organizations must prepare to handle leadership transitions by committing to succession planning to stay on course to meet objectives.

In its 2024 Nonprofit Salaries and Staffing Trend report, PNP Staffing indicated a 19% nonprofit turnover rate, nearly 60% higher than other companies. In the survey, 59% of organizations stated it was significantly harder to fill open staff positions and a lack of qualified candidates, competition for qualified candidates and being unable to match expected salaries were the top recruitment challenges nonprofits faced.  The report can be downloaded for free. 

Transitional continuity

When faced with leadership changes, the key focus should be maintaining continuity of impact to keep an organization from stalling during the transition. Whether through an overlap of individuals or a defined handoff date, the organization must strive to maintain a positive and upward trajectory in its impact. Succession planning can maximize that ability.

Conduct a feasibility study

Incorporating a feasibility study during the succession planning process can be beneficial. This study offers a valuable perspective on approaching an upcoming leadership transition. A multi-year vision for impact and stable funding creates the most favorable organizational scenario for a transition, making it easier to attract the best leader.

Fund the transition:

One direction from a feasibility study may be securing funding for an organization in transition. But, designating funding for succession planning can be extremely challenging. Investors tend to resist change because change signals risk, similar to how people feel about investing in the stock market. An organization must educate potential investors about the risk associated with a new leader discouraged by a lack of funding. If the new leader must initiate a campaign to close funding gaps before pursuing their vision, they may feel dissatisfied or even leave, necessitating another transition.

Implement succession planning protocols

A comprehensive succession plan can take 12 months or more to develop. A top-level employee often needs one to two years to become fully competent in their role, highlighting the need for a clear succession plan and leadership training. Committing to four distinct tasks is necessary to develop beneficial succession planning.

Identify key roles

Specific roles, such as executive and assistant directors or board members, have a larger overall impact on an EDO operation than others. A plan to backfill those questions quickly and efficiently will go a long way to ensuring delays are minimized. Additionally, identifying internal team members with the interest and aptitude to advance should be part of the thought process.

Document responsibilities

A nonprofit should document staff responsibilities and duties. An excellent team exercise is for all team members to review other roles to include areas where collaboration occurs and reduce the chance of forgetting shared responsibilities.

Describe core skills & competencies

Organization leaders must evaluate the skills and competencies required to perform the duties of each role at necessary standards. This process involves carefully considering what technical and communication skills are crucial for executing projects.

Determine necessary training

Operational continuity can be best protected through proper training. Staff training on the responsibilities of other roles can help buffer staffing changes. Third parties often offer expert training at costs much less than the cost of a leadership void.

Organizational continuity

While succession planning is a critical endeavor, proactively investing in organizational continuity is essential to weathering leadership changes. Educating leaders and board members on various roles and responsibilities allows organizations to retain institutional knowledge, which is necessary for guiding them through leadership changes without losing momentum. Offering mentorship opportunities can pass along expertise in previous decisions, long-term strategic planning, and crisis management to help new directors understand the organization’s history, culture, and goals.

Regardless of your organization's current status regarding succession planning, now is the time to jump into the thought process to protect your ability to meet your goals. Convergent Nonprofit Solutions understands the importance of nonprofit organizations and their role in communities nationwide. Look to Convergent Nonprofit Solutions to help you navigate opportunities and challenges.