May 20, 2018
 
Study: Nonprofits Do Well by Keeping Founders Engaged

February 22, 2018 — Contrary to conventional wisdom that founders of nonprofits should make a clean break to ensure successful leadership transitions, many organizations would do well to keep their founders involved, according to a newly published analysis.

The study, Making Founder Succession Work, based on in-depth, quantitative study of nonprofit founder transitions, was published last week by The Bridgespan Group, a Boston-based nonprofit that provides consulting services to help nonprofits break cycles of poverty and improve the quality of life for those in need. It found that:
  • More nonprofit boards work out a continuing role for founders (45%) than pursue an amicable clean break (31%).

  • Transitions that paired a founder and successor from inside the organization proved to be the most successful of all transition models.

  • Involuntary breaks (24%), where founders are ousted by the board, tend to be the least successful.

  • Transition work is challenging and requires preparation, including investing in internal talent development, talking about succession planning, establishing a transition fund, and shoring up board oversight.
According to Jari Tuomala, Bridgespan partner and coauthor of the study, extending the founder's role, "when done right, can be the best path to maintain funder, board, and staff loyalty, while allowing the new leader to benefit from the founder’s capabilities and knowledge. Everyone wins, including the organizations and most importantly, their beneficiaries.”

Coauthor Donald Yeh, a Bridgespan manager, noted that interviewees mentioned a number of long-standing practices to manage leadership transitions. Among them: start early in planning for transition, invest in developing internal successors, establish frequent interaction between successors and board chairs, and maintain active board engagement in the process.

In addition, Yeh said the research identified five recommendations that more directly address the practical aspects of managing an ongoing role for a founder. “These recommendations apply to any organization that seeks to extend the founder’s stay,” said Yeh. They are:
  • Limit the founder’s new role to specific areas of interest and capability;

  • Engage in regular coaching to help navigate operational and emotional aspects of the transition.

  • Anticipate conflict and agree to a process to mitigate it.

  • Transition board, funder, and staff loyalty in logical order—they need to be shepherded to new leadership.

  • Create initial separation (founder should have low profile) to allow the successor to settle in, particularly if the founder’s new role is substantial or long term.

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