Leadership Transitions: How to Identify and Cultivate Effective Nonprofit Leaders for Tomorrow

Nonprofit organizations need leaders who can transition from one role to the next smoothly and adapt to coming changes. To prepare for future opportunities, nonprofits tap their staff and partners as sources with the best leadership capabilities. These leaders are expected to understand the nature of nonprofits and the range of services they provide. The terms that nonprofits manage, for example, extend beyond nonprofit foundations and charities to include philanthropy, social good, hospitals, schools and public services.

To learn more, check out the infographic below created by the University of San Francisco’s Online MPA program.

Nonprofit Succession Planning

What Statistics Show About Nonprofit Succession Planning

There is a decline in the number of leaders in nonprofits as a result of employees leaving their organizations to work elsewhere or retire. About 50 million jobs are estimated to become available within the next 10 years starting in 2012. Of these new openings, around 62% will be due to retirement. To this day, the top organizational concern among nonprofit leaders is still the challenge of finding fresh manpower to fill vacated leadership positions. Nonprofits also see a 43% increase in the availability of jobs in C-level positions including CEO, CTO and CIO—positions that require specific skillsets and work experience.

Challenges That Nonprofits Face

Other than manpower, about 40% of nonprofit organizations believe skill gaps in the workforce can make finding the right match for the job a challenge. About 43% of these organizations expect an increase in the need to train incoming employees to make them suitable for their future jobs.

Qualities of the Best Nonprofit Leaders

The unique needs of nonprofit jobs require a unique set of qualities for future leaders. These qualities include:

  • Willingness to collaborate within all levels of the organization
  • Commitment to the mission of the nonprofit and capability to understand its role in attaining its broader goal
  • Intelligence, perceptiveness, trustworthiness and persuasive abilities
  • Proactive and passionate about the role of nonprofits
  • Patient, adaptable and inspiring
  • Excellent skill level and experience in finance and executive roles
  • Capable of encouraging open communication among co-workers and partners
  • Ability to promote strong teamwork
  • Excellent understanding about the organization
  • Willingness to work with other organizations.

How Can Nonprofits Train Their Future Leaders?

The most important approach that nonprofits can take to train future leaders is to help them build the skills necessary to make them efficient managers. Furthermore, nonprofits should also develop strategies to encourage these leaders-in-waiting to remain in the organization and in the industry. This is the only way for their skills to be fully utilized and for nonprofits to benefit from their investment.

Nonprofits should also make leadership opportunities available to a diverse group of workers to encourage increased interest in training and improving their experience. Nonprofit employees should also be encouraged to expand their knowledge by working on independent projects. This will help improve their abilities and test their current skill level. For example, new or incoming employees may be encouraged to work on a challenging project to see how much of an impact they can make.

It is also a good idea for nonprofits to promote the most desirable elements that define effective leaders in the private and public sectors. These include:

  • Promoting open communication
  • Offering support for individuals
  • Efficient allocation of resources
  • Removing obstacles
  • Promoting sponsor innovation

Another key strategic step that nonprofit organizations can implement is to establish mentorships wherein younger, less experienced employees can learn from current organization leaders through coaching, direct interaction and learning. About 71% of surveyed Fortune 500 companies already offer their employees varying types of mentoring opportunities.

As a critical component of the internal training system, nonprofit leaders should also be encouraged to learn more about how to manage important issues that affect the organization and the society they are in. These issues include culture, values, motivation, renewal and social cohesion.

Lastly, nonprofits should attract more quality employees and future leaders, and encourage them to stay by offering better salaries and benefits. More often than not, nonprofits offer lower salaries than the majority of private companies, although generally nonprofits tend to provide benefits and other non-cash incentives as part of their total compensation package.

How Succession Planning can Help Nonprofit Organizations

One of the most important strategies that nonprofit board members must use is insourcing: that is, finding new leaders from the ranks of the organization’s current employees. Transitions in leadership can often cause a vulnerability in an organization, and may even cause a loss of institutional knowledge and brand values. Succession planning also allows nonprofits to learn how to respond and adapt to changes, particularly the kind that create new leadership roles and needs.

Steps for Successful Succession Planning

Succession planning allows nonprofits to help employees make an effective transition from one role to another without reducing their efficacy and efficiency. To ensure proper succession, here are key steps to follow:

Include grant makers and senior leaders in the process.

Senior leaders have the experience and skills necessary to train new leaders for future positions, while grant makers create the opportunities for the organization to continue its work, sustain its function and meet its goals.

Engage younger talent for future skill development.

The skills that leaders needed to manage successfully a decade ago may not be the best set of skills required of younger leaders today. Nonprofit organizations should be able to adapt to change, and new incoming talent must be trained with the right skills to help them become effective leaders.

Find new talent to meet the organization’s needs.

No transition is perfect, and it is quite possible there will be areas in the organization that may not have the right match in terms of talent. In addition, changes in the industry may have created new roles that the current talent pool may not be able to fill. If employees within the organization do not have the right training, skills and experience for the job, then new talent should be tapped.

Provide in-house leadership training.

Senior leaders in nonprofits will eventually leave the workplace due to retirement and other factors. To prepare for the new vacancy, nonprofits should provide training opportunities for current staff to help them develop leadership skills. To keep the organization stable, nonprofits should also find ways to retain their workers so they thrive in their leadership positions, and become mature and effective members and leaders of society.

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