Succession Planning for Nonprofits: How to Avoid Costly Disruption

Leadership transitions are inevitable—yet many organizations don’t start planning until that leader is already walking out the door.

Why Now Is the Ideal Time to Plan for Leadership Turnover

A recent survey found nearly 75% of nonprofit organizations reported persistent job vacancies. Any staff transition is costly for a nonprofit organization, but unplanned leadership transitions are among the most costly. With advance planning, you can expect a relatively smooth, well-communicated transition. Without it, you and your staff, board members, and donors might suddenly feel like you’re on a panic-inducing, faith-shaking rollercoaster ride. 

When your organization finds itself reacting to an unplanned transition, you’re in defense mode instead of playing offense. You’re bound to make mistakes. I generally observe two big consequences when there’s failure to plan:

1. Losses in momentum, revenue, knowledge, and relationships
2. Failed successor placements 

Senior Staff Replacement Is Expensive

To put the costs of either of those two consequences in perspective, the latest research on the bottom line to replace a senior nonprofit professional ranges from 2 times to 3.5 times the annual salary of the role. These models account for the typical hard dollar costs of recruitment and onboarding, but also factor in soft dollar losses in productivity, social capital, and knowledge drain. 

Losing a senior leader with a salary of $100,000 could cost your organization up to $350,000. To make matters worse, if you rush to find a replacement and make a poor selection, you could face compounding costs as you exit the failed placement and go looking yet again. I’ve seen this happen more than once.

Instead, imagine this scenario: I recently worked with a large regional organization, whose leadership invited clear and open communication with their 30-year CFO as he made early indications that he’d like to retire in the not-too-distant future. This organization made all the right moves, including:

• Talking through expectations and timelines
• Engaging my team in conducting a full executive search
• Planning for a significant (but not uncomfortable) overlap for training and knowledge transfer
• Creating and executing a strategic communication plan for internal and external stakeholders 

This organization carefully and patiently waited for a candidate who possessed a mission match, cultural alignment, and the professional acumen for the role. They had an extremely smooth transition and knowledge transfer, and everyone was on the same page throughout the changeover. 

Succession planning requires deliberate strategy and teamwork. As part of its risk management responsibilities, the board of directors should oversee succession planning for both board roles and key executive positions, while senior leaders handle staff changes at other levels. Sometimes, transitions present opportunities to evolve existing roles.  

Identifying and Addressing Vulnerable Roles

Succession planning isn’t just about replacing a person; it’s also about positioning your organization to thrive in its next chapter.

Two questions can help you identify the most vulnerable roles at your organization:

1. If they were suddenly vacant, what roles would have the most negative impact on the short- and long-term health of your organization?
2. Of those roles, which are the most likely to turn over in the next 1–3 years for any reason? 

Your CEO is not always at the top of this list; it could be a key program officer or a key fundraiser whose exit would cause the most collateral damage to the organization. There may also be specific trends in your sector or in a particular position that you should pay attention to. 

Founder

Succeeding a founder of a charitable organization can be an especially complex succession challenge. In one case, I worked with an organization whose founder wanted to make a fairly abrupt exit. The founder had multiple projects coming to fruition that were outside the scope of the organization. Replacing the person who built the organization from scratch quickly brought a number of complicated issues to the surface:

1. Unpreparedness for the founder’s absence: There was little to no internal readiness for the change, and the entire staff was heavily dependent on their relationship with the founder. 
2. Disagreement about the future of the role: The board and senior leadership were not on the same page as to what role a new CEO would play and what qualities they would need to possess. 
3. Failure to make a clean break: It was clear that the founder was flip-flopping about staying engaged with the organization. 

Ultimately, and against prevailing wisdom, they hired a CEO anyway, and the whole staff revolted, resulting in letting the new CEO go.

In its unreadiness to replace a key leader, this organization was not unique. BoardSource’s Leading with Intent study found that only 29% of nonprofits have a written succession plan in place.

CEO/Executive Director

Long-time CEO or EDs with more than 10 years in the seat are prime candidates for serious succession planning. As integral as they are to your organization, leaders don’t stick around forever. A 2023 study conducted by The Nonprofit Times found that the average tenure of a nonprofit CEO was 12.9 years. You might have a year or more of readiness work to complete before a succession could even be implemented, much less completed successfully, so it’s wise to prepare now.

CFO/Vice President of Finance

We’ve seen a number of organizations searching for financial leads this year. In many cases these CFOs/VPs of Finance have been with the organization for decades. This aligns with converging trends: the tendency of CPAs and financial planners to have long tenures and the big wave of Baby Boomer retirements. Because of their steadiness and commitment, financial leads don’t commonly have a lot of turnover, but now many who have been with organizations for years are finally ready to retire. Without a succession plan in place, nonprofit leaders might find themselves scrambling to replace their long-time CFOs.  

Senior Staff

According to The Center for Effective Philanthropy’s State of Nonprofits 2025 report, nearly two-thirds of nonprofit leaders report difficulty in filling staff vacancies. Pay attention to key indicators of senior staff intentions and know that timelines often move faster than employees think they will, even once a staff member announces their plans:

• “I’m thinking of retiring in two years.”
• “As soon as my kids are out of college, I can really slow down a bit.” 
• “I’m not feeling as challenged as I used to in this role.”

If these statements sound familiar, it might be prudent to start preliminary conversations about senior staff succession planning.  

The intent here is benign. This identification process is not in any way a prompt so you’ll create a list of flight risks whom you’ll subsequently treat with suspicion. These suggestions are meant to encourage good planning to protect your organization’s impact. When you have honest conversations about potential career paths, you’re creating a healthy culture that promotes retention.

5 Critical Succession Plan Components

Once you’ve identified the key roles you need to plan for, and their priority order, consider these five steps:

1. Identify how the role might evolve. Build the accompanying set of qualities and qualifications that will best meet the needs of the role in the coming years. Again, this may look slightly different than the employee currently in the role, and that’s a natural part of the growth and evolution of the organization.
2. Perform a talent assessment of your current staff. Which employees have clear leadership skills and mission alignment that can be developed and channeled into critical roles? Who will be interested in and seize the opportunity to grow into the roles?
3. Create a development plan. Detail how each successor on your staff can build the capacity and skills needed to transition to the future role.This should include training, formal mentorship, and opportunities to practice new skills in an understanding environment. Timelines and clear communication continue to be critical through this step.
4. Formally document your succession plan. Evaluate the plan regularly for progress and make necessary revisions. Eventually these plans will shift to specified onboarding and transition details as the new role is assumed.
5. Develop a recruitment plan. If you lack internal candidates for one or more critical roles, develop a plan that outlines both how you will secure interim or fractional support and how you will conduct a formal search to fill the position permanently. Depending on how critical the role is, you should consider working with an executive search firm that specializes in nonprofit placements.

Securing Your Organization’s Future

The time you invest today in planning for both expected and unexpected turnover will deliver considerable ROI for your nonprofit and save you the unnecessary stress of being caught off guard. Organizations that prioritize careful staff planning, like the practices outlined here, also see much higher retention rates of talent at all levels and are more successful at attracting top talent to the organization. It takes intention and thoughtful management, but succession planning will save you time and money, while maximizing your overall mission impact.