Competition, funding challenge nonprofit executive searches

FOR THE KIDS: Gayle Corrigan, chairwoman of the Greater Providence YMCA board of directors, and CEO Steven O'Donnell help R.J. Ajay, 7, pick out two toys he wanted at a recent Toys For Tots event in Providence. / PBN PHOTO/ MICHAEL SALERNO
FOR THE KIDS: Gayle Corrigan, chairwoman of the Greater Providence YMCA board of directors, and CEO Steven O'Donnell help R.J. Ajay, 7, pick out two toys he wanted at a recent Toys For Tots event in Providence. / PBN PHOTO/ MICHAEL SALERNO

After more than a decade of lost focus and financial instability, Gayle Corrigan knew the Greater Providence YMCA needed new direction through dynamic leadership.

Even though the nonprofit had assembled what the chairwoman of the board of directors called a “driven, effective, efficient” executive-search process, finding the right candidate came down to sheer “dumb luck.

“He wasn’t even on the radar,” she said of the successful candidate, former R.I. State Police Col. Steven G. O’Donnell, who now serves as the organization’s CEO.

Nonprofit-management specialists say succession planning in the industry varies widely. Corrigan, who has been on multiple executive searches, said the YMCA’s search was tailored to its desire to increase community impact.

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Over the past 10 years, she explained, the YMCA has had multiple CEOs, most in their 40s, far from retirement. Most leadership searches during that time period, she said, were designed to undo prior mistakes.

Because of the high executive turnover, said Corrigan, there was no opportunity to finalize a succession plan.

“In general, I haven’t seen too many formal plans [at nonprofits] because there is a lot of competition [and] the funding dollars have shrunk,” said Corrigan.

One unusual aspect of the YMCA’s search was offering a five-year contract, said Corrigan, which provided stability for the board and O’Donnell.

Thundermist Health Center recently embarked on an executive search, following a Dec. 1 announcement that current CEO Charles T. Jones is exiting the Warwick-based nonprofit to serve as CEO of Harbor Health Services Inc. in Dorchester, Mass. In announcing Jones’ resignation, effective Feb. 22, Thundermist made a point of noting its board of directors “has a CEO succession-planning process in place” to help “ensure a seamless transition to our next leader.”

Jones was not authorized to speak about the organization’s ongoing search but said nonprofit succession planning has multiple steps and must perpetuate the organization’s mission and culture.

It isn’t simply “draft a job description and put it on Monster.com,” he said. “[Succession planning] has to be done thoughtfully,” with input from the board and employees.

Jones agreed nonprofit succession-planning teams face unique challenges, including ensuring long-term revenue channels from reliable donors and finding a candidate driven by the organization’s mission.

When looking to hire a potential executive, he added, the culture of the organization is key because, “as a nonprofit, you’re not going to be able to attract senior leaders through equity options or compensation.”

Jill Pfitzenmayer, vice president of the Initiative for Nonprofit Excellence at the Rhode Island Foundation, emphasized the definition of a succession plan varies with the needs of each nonprofit and can be vastly different than that in place at a for-profit corporation.

“For some, it may be that the board convenes and talks about the skills they’re looking for, to an organization that has a [written plan],” she said.

She also said the frequent turnover witnessed by nonprofits such as the YMCA was not worrisome, but rather “predicted.” In fact, she added, high executive turnover in nonprofits is a national trend and Rhode Island’s nonprofit community is “consistent.”

A Leadership New England survey, published in 2015 and partially funded by the Rhode Island Foundation, said 83 percent of the state’s nonprofit leaders planned to leave their jobs within five years.

Pfitzenmayer said after the results of Leadership New England’s survey were published, she has watched as succession planning became “part of the conversation” at more and more local nonprofits. She said she is “very optimistic” about how these organizations are planning for their future.

Nonprofits, she said, are particularly challenged in keeping a “deep bench” on both the board of directors and top-level management, at all times. This, she said, is becoming more challenging as the economy settles from the Great Recession.

“Now [the economy] has stabilized; that may have loosened up personal choices people were making,” she said.

Even if a nonprofit’s top executive has no plans to leave, Pfitzenmayer suggests putting an emergency succession plan in place.

That would “encourage people to demystify [succession planning] and diffuse the awkwardness” that may come when an executive chooses to depart, she said. •

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