The only silver lining that Pope and his fellow directors could find was the fact they had been through the same transition only three years earlier when Barbara Zahner, who had served as Sacred Heart’s executive director for 15 years, stepped down. Board members realized with relief that memories of that transition were fresh enough to provide a blueprint for their new task. "We knew the kinds of challenges we would be facing, and generally what steps we needed to take," Pope says. "We had an institutional memory of how we had done this. But even then we found that the road was full of bumps and unexpected potholes along the way."

For Sacred Heart’s directors, the repeat task of managing executive transition was daunting. But most individuals whose passion has led them to a seat on a board of a nonprofit are ill-prepared to tackle that challenge. Surveys show that the same people who serve as corporate directors and would not dare be without a succession plan for key management team members often fail to even discuss the same topic with the nonprofit boards on which they serve.

Meanwhile, those same surveys reveal that anywhere between 30 and 50 percent of the leaders of those nonprofit organizations are planning to retire or resign soon. "There will be a huge amount of turnover in the next few years, but little evidence to show that boards and directors are well prepared to oversee and manage those transitions," says Gene Tempel, executive director at the Center on Philanthropy at Indiana University in Indianapolis. It is time, he and other advisors agree, for nonprofit directors and donors to look beyond fundraising and program development to the complex task of ensuring that the nonprofit group has a solid succession plan or strategy to draw on in the event that its executive director decides to leave. "Anyone who fails to do so will be failing in his responsibility not just to the organization and its employees, but to its donors, to the community and to the people it was created to support," Tempel says.

Ignoring the Inevitable
Nonprofit directors do not seem to be getting that message. The Annie E. Casey Foundation set off the alarm bells last year when it released the results of a 2004 survey of 2,200 nonprofit managers across the United States. Of these, 11 percent were over 60 years of age and another 44 percent between 51 and 60. All but one-third of those surveyed planned to leave their position or retire within the next five years, but only 44 percent said any succession plan existed.

TOP VIEW: Too many nonprofit boards are unprepared to face the challenge of succession when an executive director or other vital employee resigns. With an estimated 30 to 50 percent of nonprofit leaders planning to retire in the next few years, this could lead to crisis if donors lose faith in nonprofit preparedness and oversight.

Subsequent surveys have painted an even bleaker picture. A study on nonprofit executive leadership published early this year by CompassPoint NonProfit Services and the Meyer Foundation found that only 29 percent of those surveyed even discussed succession planning with the board. A survey of nonprofit chief executives by New York-based search firm DRG released this past spring showed that the gap between boards and managers on succession planning seems to be widening: 40 percent of those surveyed plan to leave their posts within two years, but only one-third of all respondents have discussed management transition with the board.

This failure to plan ahead invites other challenges. When the time comes to replace a retiring executive director or an underperforming nonprofit president, boards will be drawing on a shrinking talent pool, thanks to demographic trends and the lack of attention and resources devoted to training a new generation of leaders within the nonprofit world. "That leadership deficit is only going to grow, and so directors have to get ahead of the curve or they will fail," says Tom Tierney, chairman and cofounder of the Bridgespan Group, a Boston-based organization that advises nonprofits on management issues. Tierney, who serves on the board of eBay and other corporations, says his mission is to get nonprofit boards to think about management succession in the same way that corporate boards do. "It’s time to define our mission as nonprofit directors more broadly, and to understand that our key job is making sure we are helping to build a strong and sustainable institution," he says. "Planning for executive transitions is part of that larger responsibility that we have. If the first time we seriously address that is when an executive director resigns, then we have failed in our responsibility."