By Ruth Masterson, Exponent Philanthropy
Does your grantmaking organization have a succession plan in place?
If you’re struggling with succession—or haven’t dealt with this tricky topic on your board—you’re not alone. In our most recent member survey, we learned that 27% of members have completed their plans, 29% are working on one now, and 39% plan to complete theirs in the future.
I probably don’t need to tell you that a sound succession plan approved by your board is very important. Things happen, and simply having a plan in place can make everyone’s life much easier if something were to happen to you or another board member.
When it comes to succession planning, I find that our member organizations usually fall into one of the six groups below. Where are you, and what will you do about it?
The Don’t-Have-One-ers: Grantmaking organizations in this group have no plan at all. They’ve never had conversations about succession, and there are no instructions in their bylaws or other governing documents. Uh-oh!
Action: If you fall into this category, it is critical that you do something about it. Get a succession plan in place, even if just a rudimentary one. Many members who believe they fall into this group actually have a rudimentary plan in place—they just aren’t aware of it.
The Don’t-Realize-ers: Grantmakers in this group believe they don’t have even a rudimentary plan in place. In fact, they do—in their bylaws or trust document. Dust off your governing documents. Do you find a description of how directors are elected or trustees are appointed? If so, this is the making of a rudimentary succession plan. You can automatically claim status in the next category, The Good Stewards.
Action: Educate your board about the contents of your governing documents, and develop the habit of referring to them often, so they are “living” and useful.
The Good Stewards: Good Stewards can point to their succession plans. They are typically just bare bones plans, but they’re enough to get you through. We hope you’ll feel inspired to take your plan to the next step—not simply meet the minimum standard.
Action: We encourage you to do the necessary work to become Thoughtful Strategists. Take some time in board meetings to talk about your succession plan, flesh it out, and get it approved. It’s worth the effort.
The Thoughtful Strategists: Boards in this group have taken the time to go beyond meeting the minimum. They’ve started with a rudimentary plan, then considered the special issues affecting their organizations: the donor’s intent, the organization’s history and culture, the current board members’ relationships and values. They’ve settled important matters such as term limits. And they’ve put their refined plan into writing and approved it at the board level.
Action: Congratulate yourselves, and commit to reviewing your plan periodically. You might want to get creative and join the Inspired Leaders group—but you don’t have to.
The Inspired Leaders: Some members go even further. These inspired boards go the extra mile and create truly innovative, tailored structures to support board leadership development. They might diligently work to build a pipeline of philanthropic talent as discussed by my colleague in her recent post, creating junior boards or advisory committees.
Action: Bravo! As with the Thoughtful Strategists, be sure to set up periodic review of your succession plan. We invite you to share your story and your plan with us and your peers.
The In-Between-ers: I was surprised to learn about this group of member organizations. They worked hard to create a succession plan—but never actually took a vote to approve it! In other words, because it wasn’t approved, the board can’t rely on it with confidence.
Action: If you’re among the In-Between-ers, don’t let your previous good work go to waste! There’s no way to know when a succession plan might become necessary, so we encourage you to take the next step and adopt your plan. You can always revise and update it later.
Where do you fit? Are you ready to tackle the action items? Do you need more information? Check out the resources below.
Directory of Foundation and Philanthropy Advisors, an Exponent Philanthropy member-nominated directory of professionals who serve philanthropists with few or no staff
Making Plans for Succession: What Founders Need to Know, available in PDF (complimentary to Exponent Philanthropy members) or hard copy
Successful Succession: Inspiring and Preparing New Generations of Charitable Leaders (National Center for Family Philanthropy)
Senior Program Director Ruth Masterson works closely with members to create written materials and training curricula, and answers member questions on foundation administration, governance, boards, and tax and legal topics. She is also is the project manager for Exponent Philanthropy’s Practical Board Self-Assessment. Prior to joining Exponent Philanthropy, Ruth served nonprofits in her work at Adler & Colvin, the Council on Foundations, and the International Center for Not-for-Profit Law.