Non-Profit Leadership Transition – A Board’s Responsibility
By Lynne Molnar & Chris Dame

A Time For Change

The departure of an executive director, whether sudden or planned, is a critical turning point in any organization’s history. It is a unique opportunity for the board of directors to step in and manage the transition from one executive director to the next.  The Board is the stabilizing force for the organization during this period - reassuring the community, clients, staff and Funders that the non-profit mission will remain on course.

As jarring as it may turn out to be, transition time is ultimately a period of great opportunity also. It’s a time for reflection on mission, and the direction of the organization’s next phase. It’s a time for the board to collectively assert its leadership.

Rushing to hire a new director will, almost certainly, only perpetuate historical agency habits and patterns.  This may be acceptable, or even n some cases desirous.  On the other hand the agency may be at a new and different development stage and may require a different kind of permanent leadership. Focusing on actively managing the entire transition process is important to ensure that the old executive director’s departure becomes a truly valuable period of change in the agency’s history.

Steps in the Process

The first step in a successful transition process is ensuring the smooth departure of the outgoing executive director. Whether the director’s leaving is perceived positively or negatively, the board must manage the announcement to constituencies, negotiate the severance package and ensure that valuable knowledge regarding agency operations in the departing official’s head and desk is retained.

The next critical task for the board is to determine a course of action for the interim period.  This includes:

• Delegating the major duties of the former executive director;

• Taking stock of the organization.

• Setting up a process for hiring a new executive director.

Many non-profits have turned to professional interim directors to assist in meeting these challenges. 

A  third task is to hire the new executive director. This should include a plan that allows the new executive time to make connections with the board, learn the agency programs and conduct a six-month performance review with the board to discuss progress on the specific goals developed by the board during the transition period.

Non-profit organizations have become more complex to run. Tight funding, researched-based programs and sophisticated financial reporting requirements make the job a lot harder than it used to be.  It’s unrealistic for a volunteer board with many other responsibilities, probably untrained in non-profit management, to assume the duties of proactively managing the three phases of the transition process.  Many non-profits are also too small to have cross trained substitute managers with the skill sets needed to run the agency, even for an interim period.  

Another Approach

Recent studies on leadership transitions for non-profit organizations¹ recommend the hiring of consultants with solid knowledge of non-profit organizational development and who have previously served as an executive director.

An independent consultant brings a myriad of advantages to organization as he or she fulfills the role of interim executive director. The tasks such an experienced leader can perform include:

• Stabilize day-day operations

• Assess capabilities

• Reassure and supervise staff

• Determine match of mission and programs

• Advise the board on the skills needed of a new executive,

• Assist the board in it’s search process

• Work with the board to set six-month performance goals for the new executive.

A Strong Recommendation

Increasing evidence from studies across the country, plus many years of practical experience by some non-profit sectors like churches points to one strong piece of advice to non-profit board members when their executive director leaves. Don’t rush into hiring a new ED. Use this critical period in the organization’s history to proactively manage a “transition period”. One valuable tool in this process can be the targeted employment of a professional consultant knowledgeable about non-profit transitions.

^1. Reference NEETP, Compass Point; Transition Guide.