Who wouldn’t jump at the opportunity to guarantee a great legacy? Most of us want to be remembered for the impact we’ve had on something that matters. Ironically, nonprofit boards often cringe at what can – and should – be among their defining legacies: executive succession.
According to a recent study by Leadership New England of 1,200 nonprofit leaders in six states, 64% expect to leave their positions within five years. Unfortunately, replacing a nonprofit executive can be so intimidating to volunteer boards that they avoid planning or aim to defer leaders’ resignations.
Perhaps the fear factor in executive succession is misplaced, but warranted. Popular opinion suggests a shortage of qualified executive leaders for a glut of chief executive positions in the growth industry that is the nonprofit sector. The real issue, however, might be the appeal – or lack thereof – of the job itself. According to the study, the nonprofit sector endures “unsustainable trends, including: overworked, underpaid leaders and staff; a never-ending fight to balance budgets and build stable organizations; a lack of investment in professional and leadership development and organizational infrastructure; and a continuing struggle to work out the optimal role for nonprofit boards.”
So it’s back to the board. No doubt a leadership transition affords an ideal opportunity to assess the core purpose and activities of an organization. The most effective succession planning, however, happens when such policies and functions are reviewed on an ongoing basis, as a matter of course in the governance process.
The report, Essential Shifts for a Thriving Nonprofit Sector, suggests three shifts to promote that approach and create a more sustainable nonprofit model:
- Shift the framework for succession planning to deep sustainability – rather than focusing on leadership change as a transactional activity, succession planning should incorporate all core activities that support the mission.
- Shift the vision for governance – focusing on governance over fundraising will keep boards’ attention on long-term stability rather than short-term fund development and enhance organizations’ capacity to achieve goals.
- Shift the structural paradigm to robust investment in the sector – no matter how great their programs or services, nonprofits need “financial capital, leadership development… a well-compensated staff” and other infrastructure supports to endure for the long-term.
A recent article about the study in Nonprofit Quarterly says its over-arching message is that nonprofit leaders are obliged to build a “greater shared understanding about what it takes to be…a ‘deeply sustainable’ nonprofit.” Naturally, that means more than hiring a leader. It requires the “creation of capital, adequate infrastructure, deep pools of active leadership capable of optimizing the opportunities and work of the organization, and a great governance system that makes best use of the generative capacities around the organization.”
Clearly, the study documents gaining momentum around shifts not only in nonprofit culture, leadership, and business models, but in the overall framework for effective governance. Perhaps those shifts are the great legacy we all will leave the sector.