Executive Transitions: Grantmakers and Nonprofit Leadership Change

Even for seasoned funders, supporting leadership transitions can be a tricky business. Where is the fine line between helping and intruding? What interventions work? And how can a grantmaker play a constructive role? Learn how grantmakers take up the transition challenge, engage with boards, support new CEOs, and help grantees use the moment to go in promising new directions.

Underwriting for this guide was provided by the Ford Foundation and theAnnie E. Casey Foundation.

Highlights

  • Supporting exiting and incoming CEOs
  • ​When a board member calls
  • Nurturing the next generation of leaders

What's in the Guide?

  • The Grantmaker's Role in Leadership Transitions:Grantmakers care deeply about the quality of leadership in the organizations they support. But what can they do to help their own grantees, and perhaps even other organizations, manage executive transitions successfully?
  • Assisting Organizations in Transition: Money and More: Nonprofits need funding during transitions as much as they ever do - maybe more. Foundations can help with that, of course, but they can also offer other types of support, such as information, encouragement, and specialized services. 
  • Making Common Cause with the Board: Replacing an executive director is a serious responsibility for a nonprofit board. Grantmakers can assist by being responsive, even proactive, during what often turns into a challenging process.
  • Supporting Exiting and Incoming CEOs: Executive transitions have a personal side. Grantmakers can ease the departure of an exiting CEO or help a newcomer get off to a strong start with a few simple gestures and practical steps. 
  • Opening the Way for New Leaders: A wide range of strategies are available to expand, strengthen, and diversify the base from which future executive directors will come.
  • takeaways
    Opening the Way for New Leaders Increase Diversity

    Build the leadership skills of senior managers, especially people of color and women and encourage diversity on grantee boards. “If the board lacks diversity, it won’t be likely to look to people of color for leadership. And even if they do hire a person of color to be CEO, that person isn’t likely to stay long if the board isn’t committed to values of diversity and inclusion.”

    Read More »
  • takeaways
    Welcoming the New Executive
    1. Develop opportunities for peer support and education. Being an executive director can be a lonely position, said a former CEO who is now a program officer. New CEOs often benefit from getting together with peers in learning circles and participating in courses or institutes for new executive directors.

    Read More »
  • takeaways
    Supporting CEOs’ Reflection, Networking, and Growth

    Some grantmakers provide departing CEOs with opportunities for reflection and networking, along with services designed to help them deal with professional, social, personal, and financial issues. These include:

    Read More »
  • takeaways
    Supporting Exiting CEOs

    Recognize and respond to CEOs’ concern: Grantmakers are quick to acknowledge that grantee organizations, and the larger nonprofit sector, owe successful CEOs — especially founding or long-time CEOs — a debt of gratitude. Yet outgoing CEOs often wrestle with serious problems: from insufficient retirement funds to limited or no job opportunities; from isolation from former peers to fear of losing one’s identity; from concern for the organization’s future to lack of clarity about when to leave, how to leave, and what the options are. As one consultant noted, sometimes the problem is as simple as being “a bit clueless about what they might do next. They need clear models of folks who have moved on to different types of work in the nonprofit sector."

    Read More »
  • takeaways
    When a Grantee Board Member Calls for Advice

    Tips on being helpful without being intrusive:

    Read More »
  • takeaways
    Executive Transition Management Prepare, Pivot, Thrive!

    Executive transition management is a structured consultancy service for nonprofits managing changes in their executive leadership. Foundations played a major role in developing the model and have subsidized the growth of the field by making grants that enable nonprofits to hire transition consultants, supporting training for nonprofit consultants in the model, and forming funders’ collaboratives to develop local and regional transition management services... Its motto, “prepare, pivot, thrive,” sums up its view of leadership transition as a “pivotal moment, enabling an organization to change direction, maintain momentum, and strengthen its capacity.”

    Read More »
  • takeaways
    Hiring a Transition Consultant or Search Firm

    Paying for a consultant, one grantmaker explained, can be a good way to support a transition while keeping an appropriate distance from the organization... the funder’s role, she stressed, is not hands-on; that’s where the consultant comes in. Often, the relationship between the consultant and the grantee is confidential, and the grantee knows upfront what information the consultant will give to the foundation.

    Read More »
  • takeaways
    Who Should Be on the Search Committee?

    We asked grantmakers and search firm representatives about composing an effective executive search committee. They recommended these guidelines:

    Read More »
  • takeaways
    When a Board Member Calls for Advice Tips on Being Helpful Without Being Intrusive
    • Pull together and share resources on the latest executive transition and leadership succession theory and practice, and the services available.

    • Provide contact information for other nonprofits that have undergone successful executive transitions.

    Read More »
  • takeaways
    What Grantees Wish Grantmakers Knew

    New CEOs need some “breathing room.” A transition is a time “when the new chief executive needs breathing room, to think about your vision, to spend enough time with your employees and with your principal stakeholders,” explained a new CEO of a women’s organization. “The best way to create breathing room is by easing the burden around meeting financial goals. There’s nothing better for a chief executive to be able to tell their board than that they’re raising money, and nothing better than for it to be so-called ‘easy money’ for general support, for transition, so you don’t have to bend over backwards to make up some new reason to need it. You can say what the real reason is.”

    Read More »
  • takeaways
    Making Common Cause with the Board

    Recognize that helping a board through an executive transition can be a long process:

    Read More »
  • takeaways
    Succession Planning

    Succession planning: A grantmaker at a West Coast foundation explained that simply asking for a plan outlining the proposed timeline and steps in the transition process can be a helpful move... Some funders urge their grantees to have in place a written leadership succession plan... The plan should clarify the circumstances under which it would come into effect, along with key roles and responsibilities.

    Read More »
  • takeaways
    Funding Through Leadership Transitions

    One CEO, for 20 years head of a training center for community leaders and now about to retire, said that he had started to see funders hesitate to commit to their usual grants to his organization. He called it the “worst possible response” to an outgoing CEO.

    Read More »
  • takeaways
    Foundation Sponsored Resources on Leadership Transitions

    Systematic executive transition and leadership succession programs make materials available on the web:

    Read More »
  • takeaways
    The Grantmaker’s Role in Leadership Transitions

    Four Foundation Approaches to Leadership Transitions at Nonprofits:

    Read More »
  • takeaways
    Opening the Way for New Leaders New Generation of Leaders
    1. Recognize and validate the new generation of leaders. Younger leaders, from their twenties to their forties, often feel “invisible and undervalued by older leaders,” said some grantmakers. Sharing that feeling, a grantmaker in his thirties said: “Do you know how demoralizing it is to sit in a room full of people in their fifties and sixties, talking on and on and on about how there are no new leaders, and they don’t know what’s going to happen when they retire?” Sometimes, he went on, “there’s a perception among older executive directors that their kind of leadership is the only kind of leadership that’s valid. There’s room for lots of different types of leadership in the sector.”
    Read More »

This guide was written primarily for foundation executives, board members, or grantmakers facing a leadership change at a grantee organization. In addition to using it to clarify your own thinking, you may want to share the guide:

  • With grantees: Some grantmakers provide information to grantees and other nonprofits facing leadership transitions. This guide could be included in a package of resources mailed out whenever you get word of an impending change. Or you might send it to a grantee who is thinking about succession planning.
  • With other funders: This guide could be a starting point for discussion with other funders in your locality or field about the possibility of collaborating to support executive transitions or leadership development.
  • Within your foundation: Use the guide with colleagues as a starting point for clarifying your views and policies on getting involved with leadership transitions in grantee organizations, developing a systemic approach to leadership change, or reaching out to other funders, service providers, and consultants. Share the guide with trustees to open up a discussion about the ways your foundation might support exiting and incoming leaders in the nonprofit sector.

Comments