Leadership Transition–who’s stepping up?
Joan M. Renner, CPA, CGMA, Director 501(c)(fit!)
What keeps you up at night? A whole list of things. Somewhere toward the top of that list is, “What will we do when our Executive Director retires?” Accomplished, influential nonprofit leaders are often indispensable. They know the programs, the members and donors, the key legislators and much of the institutional knowledge. These top managers have years of valuable experience– and they’re moving toward retirement in record numbers.
It’s not just the Executive Director, either. In many organizations, several of the top managers are approaching retirement at the same time. If the assistant is nearing retirement too, where will the next ED come from?
Most likely a smaller population. The Society of Human Resource Management, SHRM, points to demographic trends, saying, “the number of younger workers with the needed skills and experience to replace the departing Baby Boomers will be insufficient”.*
Fortunately, people are working longer. It’s a temporary reprieve, but still a great chance to prepare the next generation to lead. Unfortunately, many nonprofits have put off the issue, dealing with their leadership transition simply on a case-by-case basis.
Competition for qualified candidates is heating up. SHRM reports that in a recent survey, half of the organizations surveyed had difficulty recruiting for full-time regular positions in the past 12 months, mainly due to “lack of the needed work experience…and the right technical skills…as well as competition from other employers”.*
Emerging leaders will be stepping up into new territory, overseeing not only their program areas, but also the other facets of operations, including the finance function. It is vital that emerging nonprofit leaders gain the skills related to all areas.
Where does your organization stand on the leadership transition continuum? Now is a great time to consider what steps you can take to prepare for the future.
What can we learn?
Rather than just losing sleep over your organization’s inevitable leadership transition, consider what proactive steps might be available to prepare for it.
Spread your risk. Can you rearrange the duties of your top managers to promote job sharing between those who are nearing retirement and your emerging leaders?
Share the knowledge. Can you create opportunities for mentoring between top managers and those in the organization who may succeed them?
Write it down. Do you have documentation for all of the duties performed by each of your top managers?
Consider a contract. Can you incentivize your top managers who are approaching retirement to continue working and assist with an orderly transition?
Invest in training. Take advantages of outside training for emerging leaders, especially in specialized areas, such as how to oversee the finance function.
Until now, little in the emerging leaders’ experience or education has prepared them for the responsibility of overseeing their nonprofit’s finances. Traditional leadership programs offer little financial orientation. While the accountants will still handle the day-to-day transactions, the responsibility for financial oversight and accountability rests squarely on the shoulders of—guess who–the new executive.
That’s where 501(c)(fit!) comes in.
Our live 2-day financial leadership training seminar for emerging nonprofit professionals prepares new nonprofit leaders to exercise their oversight responsibilities over the finance side of the organization. Participants learn the key concepts of financial governance, financial reporting, accounting systems, controllership, budgeting, nonprofit tax, and more.
With major changes to nonprofit financial reporting GAAP on the way, current financial leadership training is more important than ever.
Preparing your organization and its future leaders will put you on the right course for the inevitable demographic shift. Plus, it might even help you sleep better at night.
Learn more today about 501(c)(fit!) Financial Leadership Training for the Emerging Nonprofit Leader. Consider joining us this fall in Alexandria, Richmond or Virginia Beach.
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*Yes, it’s true per SHRM’s Preparing for an Aging Workforce: Strategies, Templates and Tools for HR Professionals.
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