Interim Executives Are Part Of Succession Planning

Yesterday, on Alan Harrison's Voice of Reason blog, he posted a great article about the pitfalls of bad succession planning and the occasional need for Interim Executive Directors. As a consultant who has five times served as an Interim ED, I agree with much of what Mr. Harrison has to say.

In Mr. Harrison's colorful example, Jack is the departing long-term Director, who helps to personally choose Jill as his successor. Jill then flounders along for about a year before being eventually replaced. The details of the scenario presented ring all too true, and a story we've all seen played out before.

An Interim ED can be a great solution following the departure of a long-term leader. It gives Board and Staff room to breath, consider mission, separate the reputation and legacy of the departing leader from that of the organization, and contemplate changes in their vision before making the mistake outlined in the blog of trying to fit Jill's round peg into Jack's square hole.

So, who should be your Interim ED?

A well-meaning board member stepping in may sound great, but unless they've sat in the ED's chair before, and have the time and attention to devote, this can be a disaster (not to mention the conflicting roles of ED and board member).

A senior staff member could be a good choice (particularly if they're "auditioning" for the permanent job), but be careful how you back-fill their regular position - or are you expecting them to do two jobs at once? Be careful of setting unrealistic expectations for anybody you put in this tight spot.

An out-of-work ED, who is looking for a permanent position has other motivations in accepting your Interim offer. They're number one goal is completing their own transition, not assisting your agency in yours. If this is somebody who you are seriously considering for the permanent position, do not make the mistake of "trying them out" on an interim basis.

Those of us who regularly take on Interim ED assignments as part of our consulting business do so because we're not necessarily looking for the gig permanently. In fact, when I've accepted an Interim job that includes searching for a permanent ED, I would consider it a conflict of interest to then apply for the permanent position.

My mission as an Interim is to work on the Board's agenda, not my own, and to facilitate as smooth a transition for the staff, clients, funders, and community as is possible.

Returning to Mr. Harrison's post for a moment, he ends on what he considers to be such an important point that he prints it in bold and underlined:

It is never a good idea to have the outgoing director have a say on his or her permanent successor.  No matter who the outgoing director is or how amicable the separation is.  Never.  Never.  Never.

I found this point surprising, and while I'm not certain I agree, thinking of some real life examples I'm not certain I can argue with him either. It certainly goes along with my point of using an Interim to provide "breathing room" for the Board and Staff to do some reflection on where they've been and where they want to go, rather than just trying to duplicate the leader who's just left - an often impossible and unforgiving task.

Yes, it may sound self-serving (and it probably is), but if your organization is facing the departure of a long-term, strong leader, bring in an Interim ED first, before starting your search for a permanent replacement. Oh, and I just might be available ;^)

What's Better than 40 Billionaires?

There's been a lot of media attention this past week for the Giving Pledge, an effort organized by Warren Buffett and Bill & Melinda Gates "to encourage the world's wealthiest individuals and families to commit to giving the majority of their wealth to philanthropy." The publicity and many of the news stories focused on the first forty billionaires to sign the pledge, and the approximate dollar value of those pledges (at least $120 billion).

Of course, this is wonderful news, and we all applaud each of the billionaires signing on to the pledge. but, as Jeremy MacKechnie points out on idealist.org, Small Change Adds Up to More Than a Billionaire's Bucks. Jeremy writes,

"While some of the money will go directly to nonprofit organizations, the majority will end up in the private foundations that the donors started themselves, like The Bill & Melinda Gates Foundation, and will then be funneled into other nonprofits through grants or used to support the foundations' programmatic work."

Of course, the full potential of $120 billion won't be donated to those foundations at one time, and once endowed, the actual payout of it as grants may be over the course of many decades. So, yes, this may increase over-all foundation spending ever-so-slightly, but it's not the immediate cure-all donation that some of the media hype is implying. In the idealist article, Jeremy has another important reminder:

"Individual donations (like yours) currently make up 75% of U.S. philanthropy while foundations make up only 12%. Collectively, individual donations are more than six times larger than those of our friends in the billionaires' club."

So, what does that mean for you and your nonprofit, and more to the point, does it mean that the Billionaires Pledge is worthless to us?

No, the Pledge is still of great value to all of us in the nonprofit sector, if we put the appropriate spin on it when asked by our donors or the media how it will effect us.

The key is that Gates and Buffett never intended for the billionaires to cure all our problems. Their intention was to lead by example and to encourage giving by all, not just billionaires. As Larry Ellison said in his statement, "Warren Buffett personally asked me to write this letter because he said I would be 'setting an example' and 'influencing others' to give... I hope he's right."

So, when you get those questions about whether your organization will benefit from the Pledge, remember its purpose: "To encourage giving." Your message must be a positive one thanking all your small donors, and recognizing that they're your strength, not bemoaning that you can't get your hands on all that billionaire cash.

Of course, even without the prodding from Buffett and Gates, research has borne out that regular folks have always been more generous than the wealthy when it comes to charitable giving. So, with a little more encouragement from the Billionaires Club, who knows what you can do with your individual giving plan this coming year!

Bottom line, 40 billionaires pledging to give half of it away is really very nice, but small, individual donors are still the backbone of any fund development plan. Of course, if you need help with the fund development plan, you can check out my book on the subject ;^)

Reminder, I'm now on twitter under the name NonprofitKenG.

A Plan to Survive

Today I gave a presentation on Fundraising Planning in the New Economic Environment at the Nonprofit Forum in Redwood City. The Forum brought about 200 nonprofit professionals from throughout San Mateo and Santa Clara Counties to the conference center on the Oracle campus to share strategies for surviving the current economic collapse.

I've taught on the topic of fundraising planning many times over the years, and, of course, have my book out on the subject, but the question I had to ask myself in preparing for today was, "Has the current economic situation changed how we should approach the subject?"

The answer was simply, "No." Good planning is still good planning. The process I outline, and the tools I include, are valid in any economy. The plan that each of them creates for their agencies, of course, will be different today than it may have been a year ago, but the process is the same.

The most important thing was simply to take the time to plan, properly analyzing their funding mix, identifying gaps, establishing realistic goals, and working the plan.

Yesterday, while doing my final preparations for the conference, I came across this posting of a new study by Retriever Development Counsel with a few characteristics of nonprofits that are surviving the recession. Those characteristics include:

• Those nonprofits with diversified funding, good management, and "learning cultures" seem to be coping much better than others.
• Successful nonprofits appear to be putting more focus on development activities, particularly donor relations, including cultivation of major donors.

This is nothing new. When I was working for Compasspoint Nonprofit Services (one of the organizers of today's conference) during the dot-com bust of 2002 we did a similar survey, and - not surprisingly - we found that those organizations that were doing best were those that had a development plan.

The plans were all different, and all unique to the organizations that made them. There's no right or wrong plan. The only mistake is failing to plan.

Maybe in a good economy you have the luxury of sitting back and "just letting the money roll in" without any design or thought to how it's going to happen. But today we don't have the time to take chances like that. The time spent planning will be paid back to you with security and sustainability.