I recently received a call from the Executive Director of an organization that I have supported since it was founded. I have been a consistent major donor and love the organization’s mission. The ED called to tell me he is leaving the organization. I asked him a bunch of questions – about why he was leaving and what he was going to do next. After I felt assured that he was not being pushed out and that there was not an issue with the organization, I wished him good luck and asked him to keep in touch. He then said, “The organization is in good shape. Please don’t stop funding just because I am leaving.” I promised him that they could count on my donation for next year.

Withholding Funds Hurts Those Served

Many donors, and especially institutional funders, put their grants on hold during an ED transition. This practice can throw a nonprofit into a downward spiral. First, the organization is probably losing its best fund raiser (i.e. the ED) which makes it harder to raise money. Second, the organization might have extra expenses such as hiring a search firm, so it actually needs more funding not less. And, of course, the nonprofit still needs to do its work. But if it loses significant funding, it may have to lay off staff which means it can’t have the same impact. Then funders donate less because they see less impact. Suddenly everything implodes. I have seen it happen.

I get this type of call from an outgoing ED every now and then. And generally, I agree to keep funding the organization for another year while they work through the transition.

Consider Giving More During a Transition

I fund organizations because I believe in their missions. Even if the ED leaves, I still believe in the mission. I know that no individual person is irreplaceable – in a for-profit business or a nonprofit organization. Notably, in a couple instances, I have increased my donation during a transition period, knowing that other more risk-averse funders would cut theirs.

The Board Needs to Step Up and Over Communicate

I think having the outgoing ED call is a great idea. But then the ED leaves and I may not hear anything for months! I tell myself, “I know they are busy. Hold tight.” But sometimes I get anxious. After all, I just committed to funding them for another year. What are they doing? Why it is taking so long? I start to second guess myself. Maybe I shouldn’t have made that commitment.

So, board members, listen up. This is a time when the board’s leadership is vitally important: Choosing a new leader is one of the most important jobs you have, and it takes a lot of time. But don’t forget about your donors. Be transparent. Over communicate. I am a major donor to one organization that handled a transition beautifully. I received the call from the outgoing ED. Soon after, the board chair sent out an email announcing the ED’s departure. In that email, she briefly outlined what the board was going to do: They were going to appoint the deputy director as interim director, noting that this person did not want to apply for the ED role. Then they were going to hire a search firm. They said they expected the process to take six to nine months as they were going to do some research before writing the job description. The letter said they would be reaching out to some donors so I might expect a call from the search firm. (I was not part of their research, but that’s okay). Then she closed with this: “I will send an email the beginning of each month to give you an update.”

Awesome! Even better, she sent an email each month as promised. They were quick updates on the search and the work of the organization. It gave me a lot of confidence that the board was leading well. They knew what they were doing. The organization was doing its good work and the board was doing its best to hire the best leader for the future.

Lessons Learned

For donors: Don’t cut off funding for an organization you support just because there is a transition at the top. Stick with them. Increase your gift if you can.

For the board: Be transparent. Communicate often. Give donors confidence in the board’s leadership so they continue their support during the transition.

Share Your Story

Can you share your stories about leadership transitions? If you are a donor, do you keep funding or do you go into a wait and see mode? If you are a board member, how do you communicate with stakeholders?