In 2016, there were more than 31,000 nonprofit organizations in Minnesota, employing over 300,000 people, or about 14 percent of the state’s workforce.
That’s about twice as many nonprofits as in 1989, when baby boomers were moving into leadership roles (the earliest year comparable data is available). Baby boomers have helped fuel the growth of the sector in two ways: founding thousands of nonprofits, and providing a population bulge that helped staff the expansion of existing organizations.
Philanthropic grants and gifts to nonprofits also have expanded over the same generational period. Total giving in the United States was $410 billion in 2017; according to Giving USA, the average year-to-year change in total giving from 1977 to 2017 was an increase of nearly $9 billion in current dollars.
Fast-forward to 2019: About 10,000 baby boomers are turning 65 every day, a pace that will continue until 2030. While the age and concept of retirement are shifting, there nonetheless is a surge of leaders exiting from nonprofits locally and nationally, as boomers downshift or move out of the workforce entirely. These transitions are fodder for daily conversations in the nonprofit sector, as boards and staff prepare for the inevitable changes in leadership that are taking place.
The good news is that there are even more millennials than boomers, so from a raw numbers perspective, the prospect of filling vacancies is not necessarily grim. However, as Twin Cities Business has documented in many articles, what millennials want from work is different from what boomers wanted, and the generations differ considerably in their contexts and world views. As the nonprofit sector goes through the age-shift that every business is confronting, nonprofits need to be ready for more than succession—they need to be ready for change.
What makes this situation especially interesting and dynamic? The ramifications for succession planning as boomers leave the nonprofit workforce. Nonprofit boards will not only need to excel at traditional succession planning tasks and processes, but also prepare themselves and their organizations to be responsive to the new thinking that will come from next-generation leaders. If boards want to support and empower new leaders’ success, then being ready to help lead change is a big part of the board’s assignment.
A structure that has seemed to work well for a board I serve on, at the American Composers’ Forum (ACF), was to establish a transition committee—not a search committee—when our boomer executive director announced plans to retire. The transition committee was given a broad mandate to help support all aspects of the leadership change, including preparation for the search, hiring a search firm, communicating with board and staff, budgeting for the transition period, interviewing candidates, recommending the finalist to the full board, planning a celebration of the departing executive’s accomplishments, and then continuing to meet regularly to troubleshoot emerging issues, smooth over speed bumps, lend an ear, and help navigate new initiatives. Even though ACF’s new executive director started in January, the transition committee is still meeting, and expects to do so through the rest of 2019.
What’s struck me about the process is that the level of engagement for the transition committee is as high or higher since the new leader started as when the committee was in the midst of the search.
Management literature for searching for and onboarding new executives seems to largely miss the subsequent change-management imperatives, or at least fails to emphasize them. A lot of onboarding literature is about helping new executives learn the culture and “get with the program.” But how does this happen in reverse? How does a nonprofit board support the vision and experience of the new executive and help lead change, particularly when generational differences are in play?
The neuroscience of leadership summarizes the challenge of organizational change like this: Our brains experience change as pain. So in the change from one leader to another, what can boards do to minimize the pain felt by employees, clients, and stakeholders while supporting new ideas and new directions?
One answer is for board members to ready themselves to listen to, learn from, and support the fresh ideas of an organization’s next-generation leaders. Another is to read change-management literature voraciously and understand how a guiding group of actors can help even the largest organizations navigate forward. And finally, speaking as a boomer myself, accept that there is no single “right way” to do anything. Even long-standing and well-loved traditions are worth breaking up if they no longer serve a compelling purpose. There will almost always be a vocal constituency for existing programs, whereas new initiatives have yet to be given the chance to earn a following. Why not be willing to change, take risks, and grow?
Being prepared not only for search and transition, but also for change, can help nonprofits in the generational shift now taking place. What is your organization doing to prepare for a thriving, creative future?
Sarah Lutman is a St. Paul–based independent consultant and writer for clients in the cultural, media, and philanthropic sectors.