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Top 10 Mistakes Boards and Funders Make When It Comes to Nonprofit Leadership Transition

Leadership transition can be difficult, especially if your nonprofit wasn’t planning on shifting positions. But things come up, and life happens. Whether your board member has to step down due to family circumstances, an internal issue, or a location-change, it’s important to be prepared.

Here are the top ten mistakes boards and funders make when it comes to nonprofit leadership transition.

[Related: What Not to Do: Top 10 Board and Finance Committee Reporting Mistakes]

1. Underestimate Transition Time and Rush the Process

As much as we’d like to think things move according to schedule, that’s not always true. Try to avoid the “It’ll take 90 days, max!” kind of thinking, and be flexible.

2. Treat Cash Reserves As a Luxury

The desire to “fund the mission first” sometimes leads boards to neglect cash reserves, and funders to give lower priority to applicants who have or are trying to build strong cash reserves.

3. Pull Back From Supporting an Organization Because It’s in Transition

Some funders decline to cut checks to organizations without permanent leadership, either out of explicit policy or a desire to wait and see how the organization weathers the transition.

This can destabilize even a strong organization and create a self-fulfilling prophecy. Instead of withholding support, consider providing an extra one-time grant of $10,000 to $15,000 to support transition.

[Related: Nonprofit Executive Director Turnover — Not If, But When]

4. Ignore Signs of Burnout from the CEO

If a CEO is asking for help, or a sabbatical — that should get your attention.

5. Be Too Timid About Making a Change

If a CEO can’t do the job or urgently needs to go, the board needs to act.

6. Be Too Heavy-Handed About Making a Change

Just because it’s time for new leadership doesn’t mean the outgoing CEO needs to be fired immediately and escorted straight to the elevator.

If the CEO has been in place a long time or is burned out, maybe they’re also thinking it’s time for new blood, and will work with the board on a planned, healthy transition.

[Related: 7 Mistakes Nonprofits Make in Their Early Years & How to Avoid Them]

7. Assume the Second-in-Command Will Take the Job

Even if the organization has an excellent second-in-command, they may or may not be the right person for the job when transition happens. Many second-in-commands don’t want to be CEOs.

8. Forget to Communicate With the Staff

During transitions, the board holds immense influence over the future professional life of the employees. Staff need to connect with the board enough to feel confidence in the process, and a sense of shared commitment to the future.

9. Ignore the Importance of Qualified Interim Leadership

Absentee, volunteer board members can rarely be effective as an interim CEO.

10. Underestimate the Particular Complexity of a Founder Transition

The identity of the founder and the organization can be intertwined in the minds of the board, staff, funders and community. It can be hard to discern what skills and personality are needed to lead the organization after the founder.

Founders by nature have start-up skills and the ability to inspire others, but may not focus on administrative systems.

Partner with Jacobson Jarvis Today!

In conclusion, if you have any questions about not-for-profit accounting and leadership transitions, or would like to schedule a consultation, contact Jacobson Jarvis today

Featured image via Pexels


  • Jennifer Bright

    Jennifer Bright is Principal Consultant with Luma Consulting, a small consultancy based in Seattle that helps clients in the charitable sector to better illuminate their path and accomplish their mission. Jennifer Bright has spent 25 years in the charitable sector, and she currently provides analysis, needs assessments, strategic planning, board development, and retreat/meeting facilitation for a wide diversity of clients.