For more than a decade, demographers and nonprofit experts have been sounding the alarm about an enormous wave of leadership retirements poised to sweep through the nonprofit sector as baby boomers reach retirement age. With approximately 6,500 nonprofits in Maine, and many of them led by aging baby-boomers, we should be preparing for a wave, not a ripple. While this wave is sure to change the leadership landscape in Maine, how it impacts the sector will depend greatly upon whether organizations and their boards anticipate what is coming and successfully plan for it.
While it is hard to know for certain whether we are seeing the start of that wave, or the crest, there are clear signs that the retirement of nonprofit leaders has become a front and center issue for nonprofit boards. Scott Schnapp, executive director of the Maine Association of Nonprofits, articulates it this way: “As part of our strategic planning process, we met with nonprofit leaders and funders across the state and asked them to tell us what concerned them most as they looked to the future, and ‘upcoming retirements at the leadership level’ was always among the first things mentioned.”
Why does this matter? In Maine, one out of seven workers is employed by a nonprofit. Those nonprofits contribute $9.3 billion to Maine’s economy through wages paid, wholesale and retail sales, and professional services contracted. In addition to the obvious social benefit these nonprofits provide, they also pay $3.5 billion annually in taxable wages. Leadership matters, not only for the future of these nonprofit organizations and their charitable missions but because of their impact on Maine’s economy.
A wave of retirements would not be cause for alarm if Maine nonprofits were actively preparing by building staff and volunteer leadership capacity, but that is not always the case. Too often, nonprofit leaders and their boards don’t make this a priority until a retirement date is announced, and then it may be too late. “It is easy to understand why funders, board members and community leaders are concerned about this,” says Kathy Hunt, principal with Starboard Leadership Consulting. “Unplanned leadership transitions can be major setbacks for organizations, leaving volunteers and new leaders scrambling to make-up for lost time.”
The Maine Children’s Home for Little Wanderers serves both as an example of the magnitude of retirements we might anticipate but also as an example of what’s possible when a board of directors is attentive to, and active in, preparing for leadership transitions. “When I began talking about my own retirement date and plans, I had four other members of my senior management team tell me they planned to retire at or around the same time,” said Sharon Abrams, MCHLW’s longtime executive director. “With that knowledge, our board sought consulting support to help us embark on a thoughtful, multi-year process to plan for and manage these transitions successfully.”
Nonprofits anticipating leadership retirements in the years ahead are advised to start building organizational capacity well before a retirement date is announced. “At MANP, we see succession planning and leadership development as essential elements of successful leadership transition,” says Schnapp. “Anticipating and planning for retirements and departures also offers an opportunity for boards of directors to take a hard look at themselves and strengthen governance practices and their own membership before embarking on a search.”
When the Maine Tourism Association’s longtime CEO announced his plans to retire, the MTA board used the lead time to “turn the mirror on themselves” and conduct a preliminary planning process to help them articulate a shared vision and organizational priorities to potential candidates. “The time we took upfront to prepare ourselves for the search proved invaluable,” says Board Chair Scott Riccio. “We also decided not to go it alone with the search. We engaged a Maine firm that specializes in nonprofit executive search, and they brought a tremendous level of professionalism to what resulted in a very successful search for MTA.”
How Maine and its nonprofit sector weather this approaching wave of retirements will depend greatly upon the quality of leadership provided by its volunteer boards of directors. If they stick their heads in the sand and try to avoid the inevitable, they will miss the opportunity that comes with well-planned transitions — the opportunity to develop new leaders, to build organizational capacity, and position their nonprofits for future success.
Jeff Wahlstrom is an executive search consultant in Maine and president of Starboard Leadership Consulting, an affiliate of the law firm of Rudman Winchell in Bangor.