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Succession Planning for Not-For-Profits: Preparing for the Expected and Unexpected

By Jason Terwilliger, CPA, CIA, Senior Manager, at Blue & Co.

The uncertain times in which we find ourselves often requires us to be more agile and expectant than usual when it comes to change. Change is often more manageable when we prepare a plan in advance. Having a written plan is now more crucial than ever, particularly for managing leadership changes and preparing for future succession.

Not-for-profit organizations are also vulnerable to staffing and leadership transitions. In fact, smaller entities may find themselves particularly prone to operational disruptions during periods of significant change. Whether due to unexpected vacancies or planned exits, giving consideration to succession planning and staff transition will undoubtedly result in a reduced overall impact to the operation, management, governance, and constituency of an organization. Unfortunately, according to a recent study, fewer than 30 percent of not-for-profits have a written succession plan in place.[1] While it is not exactly a light lift to create plans like these, in times when they are available as they are needed, many find that it is a very worthwhile investment.

Succession planning does not always have to be an overwhelming and cumbersome process. Getting something useful in effect can often be broken down into smaller, more manageable considerations like the following:

Commitment to intentional transition management:

Engage the board, management, and staff in a process to identify current and future challenges, along with the leadership qualities necessary to navigate them appropriately.

Timeline and emergency plan:

Draft a timeline for those successions that may be known and approaching. Are there internal resources that could be beneficial during transition or will help need to be externally sourced? Additionally, adopting an emergency leadership transition plan to address unexpected interruptions in key leadership roles will help the organization be prepared and know what to do when things feel chaotic.

Develop internal talent:

Cross-train staff to minimize disruptions from unexpected staffing changes and provide leadership development opportunities for staff and board members to build the bench strength and confidence of the next generation of leaders.

Communication is key:

Clearly communicate with all stakeholders before, during, and after a leadership transition, including the major donors of the organization. Transparency fosters trust and allows the opportunity for others to share helpful insight and talent.

Support incoming leaders:

Be conscious of the challenges faced by new leaders, who may need time to become effective in their roles as part of the management team. Not-for-profits aiming to hire or promote new leaders should consider making avenues available for support, networking, and the development of further expertise.

Ultimately, a succession plan is one of the many tools that a not-for-profit organization can rely on to keep a focus on continuity, sustainability, and resilience during periods of uncertainty. Change is unavoidable in today’s world, but the strongest and most effective mitigation against any risk is being prepared for it in advance.

If you need assistance or have questions concerning succession planning, contact your local Blue & Co. advisor.

[1] Leading with Intent: BoardSource Index of Nonprofit Board Practices (Washington, DC: BoardSource, 2021) www.leadingwithintent.org

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