A Line of Credit... Just in Case

COVID-19

Quick Line of Credit Quote

  • Thousands of organizations are already PRE-APPROVED!
    Are you?

Succession Planning for A Nonprofit

Summary: This article and podcast will cover how to prepare your nonprofit for the transition from one leadership to another or in other words, nonprofit succession planning. Guest, Larry Moore from Pack Away Hunger has real-world experience and recommendations about how to prepare for an executive director or board of directors succession plan. Larry talks with Stephen Halasnik about nonprofit succession planning on today’s Nonprofit MBA Podcast.

Larry Founded Pack Away Hunger in 2009, and that organization has packed over 17 million meals before a successful transition to a new Executive Director occurred in 2019. Larry also founded The Alliance for Better Nutrition which was founded in 2015 to support the work of organizations such as Pack Away Hunger and has grown to 9 affiliates.  The Alliance provides a way for groups to pack the highly nutritious Nutri-Plenty meal. Stephen Halasnik is Managing Partner at Financing Solutions which is the leading provider of lines of credit to nonprofits

So, what is the right strategy for succession planning as a nonprofit? In this podcast and article, we’re going to give you some tips for succession planning as a nonprofit, and more importantly, how to be prepared for succession.

Preparing for a Succession Plan

Succession PlanBefore you start a succession plan, it is helpful to review why this plan is so important. Here are some reason why nonprofits need to start preparing now:

Rip Off the Band-Aid

First things first, to get started with succession planning, you have to start talking about it. Many companies delay thinking about executive transition until it’s necessary. The truth is that, like most of everything, it is much easier to be prepared. Start thinking about succession planning now, so if and when something happens, you will have a plan in place.

Prepare for the Unexpected (And the Expected)

There are two types of succession; one that happens naturally and is planned, or the unfortunate event that you didn’t see coming. As a responsible nonprofit, you need to prepare for both. You need to prepare for a smooth, orderly transition, but you also need to prepare for the unexpected.

After all, it isn’t if an executive director will leave, it is always when. The difference is just in how much you can predict it.

Recognize the Right Time

The hard truth is that, at a certain point, there comes a time for any executive director to move on. No one works forever, and it is only natural for people to move on eventually. This is why it is so important, in the nonprofit sector, to stay focused on the cause.

Whatever is the right move to advance the cause is paramount. This isn’t to say to hire and fire people on a whim, but to always keep in mind that, at the end of the day, there will always be a time where a leadership change is needed, and identifying that time is crucial.

How To Execute a Successful Succession Plan

As you can see from the above, there are a number of key reasons why there is no time like the present to start a succession plan. But one key question is probably still on your mind – how do I develop and execute a plan?

In this section, we will give you some tips on making and implementing an effective succession plan, so that you aren’t caught unprepared should something happen.

First, Open Discussion With Board of Directors and Staff

The first step for an executive director to plan for succession is to simply open up a discussion. Let staff members know that you are soon going to put together a committee of the board to plan for succession. This sparks communication in the right way. Good leadership is ensuring that everyone feels aware of the process.

If Possible, Start Before You Need To

It really helps to reduce the stress levels of everyone involved if they know that the executive director is not planning on leaving the company soon. It helps to know that they are not going to soon be blindsided by a huge change in the organization, which speaks to how important it is to start this process before you need to.

That way, you can make it clear that this plan is being made because it is simply inevitable in any organization to need this plan eventually. Not because the company is about to drastically change.

Review Your Plan Every Year

How To Execute a Successful With succession planning, you don’t want to make a plan and simply stick it in a drawer. This plan should adapt and change as your company changes. Make a point to look at this plan on a consistent basis (perhaps at an annual meeting). This ensures that your plan is current and up to date.

Knowing this plan is up-to-date and consistent is actually quite “freeing” to members of the nonprofit, as they have the confidence that the nonprofit is in good hands no matter what happens.

Who Will You Choose to Replace?

There are many considerations in choosing a replacement for an executive director. The first consideration may very well be whether you go with an outside hire or hiring someone internally. Of course, the specific strategic plan will depend on your business, but there are ways to help you decide on future leadership.

One helpful way to evaluate future leaders is the “predictive index”, which is an assessment tool for evaluating which candidates will be most successful in a role. Of course, you want to base your decision on not only who is the best fit for the role, but who you think will be most successful.

This might end up being the most important decision in the CEO succession process. That is why it helps for nonprofit organizations to consider people over a period of years, well before the hiring process begins. Find a person who fits the organizational goals, and someone who can meet the responsibilities of the executive role going forward.

Know When It Is Time to Move On

One of the most difficult parts of a succession plan is knowing when it is actually time for a nonprofit CEO to move on.

It can help to recognize some signs for when the time for a CEO to move on is actually approaching. One of the more common signs is when the executive director stops thinking about the long-term future, and starts to think in more short time-frames. However, the signs will vary based on your organization.

Record This Process

Remember, this entire process might eventually have to be repeated! So as you are going through this process, you should work this succession planning process into a formal process that will be done by your organization. After all, after succession, there will eventually be another one, and it becomes a lot easier if it is a formalized process within your organization.

Succession planning needs to become an important part of your organization. It shouldn’t be looked at as something you prepare for in case something happens, but as something that you need to do because it will eventually happen. So might as well make it easier for the next group that has to do it.

About The Host Stephen Halasnik, Financing Solutions

Stephen Halasnik is the host of the popular, The Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders. Mr. Halasnik is the Co-founder and Managing Partner of Financing Solutions. Financing Solutions is a leading provider of Lines of Credit to nonprofits and small businesses.

Mr. Halasnik is a graduate of Rutgers University and has an Executive Masters from the MIT Birthing of Giants Entrepreneurship program. Mr. Halasnik is a best-selling Amazon author and is considered a leading authority on building great, purpose-driven businesses. Mr. Halasnik lives in New Jersey with his best friend, his wife Gina. Mr. Halasnik’s number one purpose is raising his two boys, Michael and Maxwell, to be good men.

About Financing Solutions Nonprofit Line of Credit

Financing Solutions, an A+ and 5 stars rated BBB company since 2002, is a direct lender that provides lines of credit to nonprofits and small businesses.

Financing Solutions nonprofit financing product is a great alternative to a traditional bank line of credit because it costs nothing to set up, nothing until used, and when used, is inexpensive. The credit line requires no collateral and no personal guarantees.

Nonprofit Organizations use their line of credit to help with emergencies or opportunities when cash flow is temporarily down (i.e. Payroll funding

Please feel free to fill out the no-obligation, 2-minute nonprofit line of credit application here. The time to set up a credit line is when you don’t need it so that it is ready to be used, just in case.

Note: Financing Solutions donates 10% of its profits to various nonprofit charities

Tags:

Related posts