Nonprofit Succession Planning – It’s Not Just the CEO
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Nonprofit organizations rely on their leadership team to help shape and implement the mission, making succession planning a key part of long-term success. While CEO succession typically grabs the spotlight, you also need to consider other teams that contribute to the everyday operation of your nonprofit.
Accounting, for example, is an essential part of your organization. If your accountant leaves, you need a plan to keep your financial records accurate. And with the current shortage of accounting professionals, nonprofits are especially at risk when losing financial personnel.
The good news is you can reduce your risk of a financial crisis if your accounting team leaves with succession planning. Let’s dive into why there’s an accounting professional shortage, what to do after a sudden staff departure, and how to create a long-term nonprofit succession plan.
Understanding the Accounting Talent Crisis
In two years alone, more than 300,000 US accountants left their jobs. These sudden departures and a declining enrollment rate for accounting majors have left the accounting industry in crisis.
Hiring qualified accounting professionals–whether you’re a mega-corporation, small business, or nonprofit organization–has become more difficult.
Why is there a shortage? There are a variety of reasons, but some of the main ones include:
- A wave of retiring Baby Boomers
- Accountant burnout from long hours and inadequate pay
- Limited opportunities for advancement
- Opportunities in finance, data analytics, and technology industries
- Nonprofit accountants may move to the private sector
Accounting roles left unfilled–or filled improperly–can lead to serious issues for your nonprofit, including:
- Financial mismanagement
- Inaccurate financial reporting
- Compliance issues
- Decrease in donor confidence and funding
- Operational disruptions from lack of cash flow
Short-Term Planning for Accounting Role Departures
With the current accounting shortage, you could face a staffing crisis after a sudden departure. Your organization still needs to maintain accurate financial records and cash flow to continue operations.
Luckily, you can handle unexpected departures using these strategies:
- Cross-train other staff members in key accounting functions, such as accurate transaction recording.
- Maintain a relationship with external accounting firms who can step in to bridge the gap while you look for a new accountant.
- Develop a temporary staffing plan to fill vacancies quickly.
- Keep procedure manuals and documentation updated to ensure consistency and accuracy in accounting.
Long-Term Succession Planning
The best way to plan for unexpected departures in your organization is to create long-term succession planning. There are three key ways you help prevent accountant turnover and fill roles when needed:
- Identify potential internal candidates for future accounting leadership roles.
- Invest in professional development and training for your accounting team.
- Create a mentorship or apprenticeship program to prepare the next generation of accounting leaders.
You should also plan to regularly review and update your succession plan as needed. Reviewing your plan at least once a year helps you proactively adapt to changes in your organization or the talent market.
Integrating Succession Planning Into Your Organizational Culture
Creating a succession plan can help you avoid a crisis after an unexpected departure, but simply having a plan may not be enough. An even better idea is to integrate the idea of succession planning throughout your organizational culture.
Succession planning culture doesn’t just refer to having a specific plan if a key employee leaves. Instead, a strong succession planning culture encourages growth and professional development among all employees. Employees who feel valued and invested in are more likely to stay with your nonprofit for the long term.
In addition to offering opportunities for professional development or cross-training, create an open discussion on career paths and growth opportunities within the accounting department. This helps keep succession planning as an organization-wide priority, rather than an executive-level need.
The Role of External Support in Succession Planning
One of the best ways to prepare yourself for an unexpected accounting departure is to maintain a relationship with an external team of experts. This could include CFO consultants or specializing firms that provide nonprofit accounting services.
Building a relationship with external experts puts your nonprofit in a stronger position if an accounting team member leaves. With external teams on your side, you can easily get expert advice and accounting services in the interim while you search for your next staff member.
External partners can also provide long-term succession strategies as well. Many nonprofits find they don’t need a full accounting team and instead outsource their accounting needs to a firm that specializes in nonprofits. For example, you might work with a fractional nonprofit CFO to help with financial planning and strategy and hire a bookkeeper or accountant in-house.
Don’t Wait to Create a Nonprofit Succession Plan
Comprehensive succession planning includes more than just your CEO. Proactively preparing for transitions in key roles like accounting improves the longevity and adaptability of your organization by protecting its financial stability.
Don’t wait to start your succession plan. Assess your current succession plan and begin integrating accounting roles today. Need extra support? Reach out to The Charity CFO to get the accounting succession planning help you need.
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