The Research Behind Succession Panning

Bayer Center for Nonprofit Management, located in Pittsburgh, Pennsylvania, published a study in January 2018 that examined the current state of nonprofits in Allegheny County and how they will be affected by the retirement of baby boomers over the next 10 years. The Bayer Center (2018) found that nonprofits employ 1 in 5 workers in this region. As many as 69% of top executives plan to retire in the next 10 years. This will leave a gap in leadership; with only one-third of nonprofits in the area doing any type of succession planning, the future of the sector is at stake.

Maria’s research took a deep dive into the specific pieces of succession planning that the sector should improve upon to prepare for this crisis. She surveyed 149 Allegheny County nonprofit organizations of various annual incomes and missions using The Bridgespan Group’s Building Future Leaders Diagnostic Survey. Most prevalently, Maria found that nonprofit organizations lack adequate recruitment and retention strategies and are not appropriately targeting new generations of leadership to fill positions that will become vacant upon the fast-approaching wave of baby-boomer retirement. It was found that 75% of nonprofit organizations are not using best practice recruitment and retention strategies to specifically target millennials to fill hiring gaps within their organizations.

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Other key findings include: 

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• The majority of nonprofit organizations (54 %) do not believe that their nonprofit organizations are highly effective in developing a pipeline of future leaders within nonprofit organizations, the most key aspect of succession planning.

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• 65% of nonprofit organizations do not have plans to address gaps even where there are successors in place.

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• 65% of nonprofit organizations do not have development plans in place for employees who have the potential to move into leadership roles. 

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• 78% of nonprofit organizations do not regularly collect data about their leadership development practices to understand whether they are effective.  

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• The nonprofit organization’s annual asset amount and causal area had little to no effect on the way in which the nonprofit organization is practicing succession planning, contrary to previous research. 

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Overall, Maria found that the millennial generation should be recognized as untapped potential for Allegheny County’s nonprofit sector and should be considered in future succession planning efforts, especially in the areas of recruitment and retention. Allegheny County nonprofit organizations should specifically focus on improving their understanding of future needs, the development of future leaders, and monitoring and improving practices. Change is coming, and we need to prepare now to engage the best talent and maintain competitiveness with the for-profit sector to continue the important mission-driven work of Allegheny County nonprofit organizations.