August 2019: Preparing for the Next Gen of Nonprofit CEOs

Contributor: Katherine Whitney, Warren Whitney Co-Founder and Director

Preparing for the Next Gen of Nonprofit CEOs

As organizations change, we will see many opportunities for new nonprofit CEOs. If you are part of the leadership of a nonprofit, there are steps you should take. Alternatively, if you are outside of the field and want your career path to lead to becoming a nonprofit CEO / Executive Director, you also should be preparing.

Nonprofit CEO Succession Planning

Every nonprofit should have a succession plan and many do. But when it comes time to select a new CEO, you may find there are some important steps left to complete.

  1. Form a search committee. It is a board’s responsibility to select the next CEO, but who should be on the search committee? We recommend at least one person who knows the organization well and at least one person who is newer to the Board and who has several years left in his/her term. A best practice is to include the expected next board chair, perhaps as the committee chair.
  2. Be clear about the search committee’s role. Begin with what’s needed for the role and attributes. The committee and the board should be clear about whether the search committee’s job is to present one candidate to the board for approval or to present the top two or three final candidates for the board to debate the final selection. We recommend the first approach.
  3. Assess the position and direction of the organization to determine the skills and experience needed in the next CEO. This analysis is vital to help candidates self-assess whether this is the right opportunity for them, and it will serve as a guide for the search committee to evaluate final candidates. Avoid letting the pendulum swing to the far side of the skills and attributes of the current CEO. It is understandable to want attributes that the current CEO lacks, but a big swing is often too much of a shift for staff and boards to handle.
  4. Check the market to determine competitive compensation. Long-term CEOs may have allowed the board to slip out of the competitive range in compensation. It’s best to negotiate compensation with a good understanding of what’s reasonable and what the organization is able to pay.

These steps will help you prepare to move forward on your own or with the help of a search consultant.

Nonprofit Professional Career Development

Do you want to be a nonprofit CEO? That question isn’t just a lead into an article on “how to become…” it’s the first question you should ask yourself after you assume that, to have a career successful for you, that should be your goal. There are many important roles in nonprofits, and if becoming a nonprofit CEO is your dream, make sure you’re ready to handle responsibilities such as:

  • Raising money. With very few exceptions, a nonprofit CEO’s top responsibility is to raise money for the organization. The CEO is the outward face, telling the story to increase awareness, building relationships, and ultimately making the “ask.” If that doesn’t sound like fun, you should rethink the path.
  • Analyzing your financial position. While you may be able to get some help here from your Finance Director/CFO or from board members, in the end, you have to understand the financial drivers and the impact operating decisions have on your financial position.
  • Managing people. Most rewarding, you have the opportunity to help others develop in their careers and to carry out your worthwhile mission. Along the way, however, you’ll have to address performance problems and possibly terminate employees for any of a number of reasons.

If you can check the “yes, I want to do that” box on those areas, read on for some suggestions.

  1. Round out your experience. If you are in the program or operations side of your organization, find a way to get involved in Development/Fundraising. Learn more about your organization’s development goals, and find ways to support them. Help with grant writing and grant management; participate in calls; take seminars to learn how fundraising works. If you are on the development side, look for ways to get experience in managing people. Many smaller nonprofits have only one or two development professionals; as a CEO, it’s likely that you’ll manage a team. Build some type of proof that you’ll be able to lead a team.
  2. Learn how to analyze financial positions. Take some classes. Become responsible for creating and managing part of your organization’s budget. Review your organization’s financial statements to make sure you understand them.
  3. Build your network. There’s often so much to do between job responsibilities and family that networking gets pushed aside. When you’re known in the community, you’ll find that interesting opportunities to advance your career come your way more often.
  4. Make sure your personal financial house is in order. Your credit history matters. If you make the list of finalists for a CEO position, it’s likely that you’ll have a background and credit checks run. If you can’t manage your personal finances, the hiring committee should wonder whether you can manage the organization’s.

Finally, when you find yourself as a candidate for a CEO job, make sure you do your homework and ask thoughtful questions. It will impress the search committee, and it may keep you from jumping at an opportunity that really is too good to be true. Every job opening and job search should be a two-way process. As a candidate, you are “selling” your capabilities, and you are also committing the next stage in your career to the new organization, so be sure you are investing wisely.

To learn more about board development, please contact Katherine Whitney at 804.282.9566 or kwhitney@warrenwhitney.com .