More Than a Temporary Fix

Interim executive directors can help solve problems and revitalize a charity, nonprofit experts say

Losing two executive directors within a year was a crushing blow to the board of Paul’s Place, a homeless shelter and community center in Owings Mills, Md.

“We’d lost a really loved executive director who had been with us

for three years,” says Melanie Heacock, who chairs the organization’s board. “He resigned and took another job. Within six months, we had hired a woman, but she left after six months. I — and the whole board — said something’s going wrong and we need some help.”

So the board turned to the Maryland Association of Nonprofit Organizations, and within a week the charity had in place two people who agreed to share the leadership job temporarily. Over the next nine months, the duo ran the organization — installing a new financial system, instituting management changes to give more support to the staff, and recommending that the community center hire more employees.

It wasn’t until all of those things were under way that the board finally began seeking a new leader. After a six-month search, the new executive director was hired, and, nearly five years later, she is still running the organization.

Increasing Trend

Organizations in many big cities where charities are concentrated are increasingly turning to temporary leaders, who can help them navigate rough patches and simply oversee operations while they search for a permanent chief executive.

“People have used interim executive directors in an ad hoc way for a long time,” says Daniel Y. Mayer, a management consultant who wrote a manual on using interim leaders for the Illinois Arts Alliance. “Most often they would pull a board member or another senior staff member and have them become an interim. But now, they’re becoming more sophisticated, and they’re looking at it as a more natural step.”

A poll of 2,000 nonprofit leaders nationwide published last year by CompassPoint Nonprofit Services, a consulting organization in San Francisco, found that 75 percent said they planned to leave their jobs by 2010. This anticipated wave of retirements led by baby boomers has prompted CompassPoint, the Annie E. Casey Foundation, and other organizations to make an organized effort to study how a temporary leader can strengthen a nonprofit group.

Installing an interim chief, say proponents of the practice, can give an organization a chance to gain perspective on its situation, resolve problems, and plan its next phase of development, which may include making a long and careful search for a permanent executive. Leaders in this movement have been training former nonprofit administrators to be interim executives — and encouraging many groups to use temporary leaders even when they are not in turmoil.

Most nonprofit executives hired by charities have never served as executive directors before, says Tom Adams, a consultant in Silver Spring, Md., who helps nonprofit groups with leadership transitions. “A part-time interim executive will get an organization further, faster than hiring an inexperienced executive without an interim,” he says. And the result, he adds, is permanent leaders who remain longer on the job, because they can work from a stable foundation.

A ‘Letting-Go Period’

Interim executive directors are called for in many circumstances, says Mr. Adams. For example, they can be effective when:

• An organization isn’t in a position to attract good candidates because of internal problems.
• A group needs to rethink its future before deciding what qualities it needs in a new leader.
• An executive director suddenly becomes ill or dies.
• A founding executive or very charismatic leader leaves.

“If the founding executive director is leaving, it really takes the organization a period of time to adjust mentally,” says Vernetta Walker, a governance consultant at BoardSource, in Washington. “There’s a letting-go period. When a founder has been with the organization maybe 20 years, an interim gives some breathing space for everybody on staff and the board to thoroughly consider the options.”

Even if the organization’s board and staff think they are in a strong position to hire another full-time leader right away, it pays to consider a temporary executive, she says.

“Organizations need to approach the transition in a thoughtful manner,” says Ms. Walker. “Having an interim gives them an opportunity to assess where they are, what the finances look like, and to develop a clear plan, so funders don’t pull out and staff members don’t bail.”

Sometimes a board member or employee can fill the gap, says Tim Wolfred, who manages the executive-transitions program at CompassPoint, which trains consultants to serve as interim leaders and matches them with nonprofit organizations in need. But those options can also create problems once a permanent leader is hired, especially if the interim leader was also a candidate for the job.

Retired founders are also not always the best choice for interim leadership, he says, owing to the emotions their return can stir up. If the founder reconnects with the staff members and then has to leave the group all over again, Mr. Wolfred warns, “it’s usually not a good dynamic for the future of the organization.”

An outsider, by contrast, can be “revitalizing and energizing” for an organization that is between leaders, Mr. Wolfred says, bringing a fresh perspective and no personal agenda — enabling him or her to help a group solve serious problems.

Mike Wollmer, who is expected to take over in May as board president of the Ice Age Park and Trail Foundation, in Madison, Wis., says that his group’s interim leader, Bob Unkel, a management consultant who has served as temporary leader of several nonprofit organizations and led Ice Age for the last six months of 2006, helped resolve disagreements among the group’s 20 chapters.

The organization is in the midst of building a 1,000-mile trail in the state to help educate hikers about the Ice Age. But the group found “communications blurred,” says Mr. Wollmer, as board members made proposals for the project to chapter members, leading to disputes.

Hiring Mr. Unkel, who was not involved in either side of the conflict, says Mr. Wollmer, “gave us a chance to work someone in with a cold and sterile point of view, someone with no emotions about these issues.”

The interim leader also took an objective view of the charity’s budget and created a financial plan that breaks down income and expenses monthly instead of annually, to help the trustees better understand the group’s cash flow and anticipate costs.

Says Mr. Wollmer, “The results of having an interim CEO far exceeded our expectations.”

The benefits of hiring an interim executive can last even after he or she has left the job.

When Colleen Colarelli accepted a post as chief executive of the Denver chapter of Girls Incorporated — her first nonprofit leadership role — she says, taking over from an interim leader, Scott Smith, gave her a head start. He took the helm during a “bump in the road” for the group, she says, and helped the charity work out the kinks in its capital campaign. But he also helped her out during her first week on the job, showing her what needed to be done and introducing her to the organization and its employees.

Sometimes, however, an interim leader can simply provide continuity in a time of crisis. When the Decatur Arts Council’s executive died, Stella Carnahan was tapped to run the Illinois group temporarily. “I just tried to keep things going as they were,”she says. “Ididn’t enact any changes.”

She says interim chiefs should ask employees how they are accustomed to doing their work. “To come in and change things could be hard for the staff to accept,” she says. “And Ithink it’s not cost effective to change things twice.”

Benefits for Young Boards

Interim leaders can be particularly useful for young nonprofit groups whose board members are serving for the first time.

A lot of the trustees are recruited by and work solely with one executive director and may not know another style of leadership, says Mr. Mayer, the consultant.

“In Seattle, for example, there are a lot of fairly young organizations where most of the board members have never sat on another board, and so they don’t know much about how this process works, and they learn from the executive director,” he says. “So they need to know that a different vision will work for the organization and find their own vision.”

The experience for a board of working temporarily with another leader to plan an organization’s future, is enormously helpful, says Mr. Mayer.

Because interim executives get more deeply involved in organizations than consultants do, they have the ability to have a greater impact, but they also have the independence to raise issues that might be difficult for a permanent leader, says Christina M. Garcia, chairwoman of the board of the Alameda Point Collaborative, in Alameda, Calif.

When the Alameda Naval Air Station was shut down, six developers were each given a parcel of the land, and those six parcels together formed the collaborative, which oversees the low-cost housing built on the land and provides health services and other programs to residents. Each developer also had a seat on the board, and with so many trustees having a financial stake in the group’s work, “some of those tensions become unmanageable,” says Ms. Garcia.

“The interim executive director said, ‘I can deal with it now for a year, but long-term, this is going to be a big problem, and the new executive director might have trouble raising the issue because the board will be his boss,’” says Ms. Garcia.

Some of the owners merged, the collaborative itself took ownership of some land parcels, and now only one developer remains on the board. Those and other changes that the interim leader helped institute, says Ms. Garcia, have helped the board iron out its problems before hiring a new director.

Assessing the Costs

Interim executive directors often charge rates higher than a permanent leader would make — Mr. Adams estimates the pay of interim nonprofit leaders at $55 to $100 an hour, depending on the market and the size of the organization — but in most cases, they don’t get benefits and usually work just two to four days a week, so the total cost is usually about the same as hiring a permanent executive, he says.

Interim executives can do the job in less time than a permanent leader because they are not doing everything the regular executive would do, says Mr. Wolfred.

“They’re not out in the community building relationships, going to association meetings, and making connections,” he says. “People in the community don’t want to spend their time bonding with someone who’s going to be gone in six months.”

However, some circumstances can increase the price, he says. “If the agency is in trouble, major turnaround issues need to be taken on, you really do need to take on a full-time person,” he says. “We worked with a nonprofit with a $52-million budget, and the founder had committed suicide. We put an interim there full time for two years. That was an extreme case.”

Because the ranks of people who make a living as interim executives is growing, finding one is getting easier all the time. “In major metro areas, there are likely to be interims,” says Mr. Adams.

In addition to executive recruiters, regional programs — like CompassPoint, Third Sector New England, in Boston, and the New York Support Center — can be good sources of temporary leaders. Management-support organizations and local and regional umbrella groups can also help.

“The local United Ways will know of veteran nonprofit executives,” says Mr. Wolfred. “But it’s very informal.”

Some large nonprofit groups have their own network of interim executives, he adds.

For instance, he says, it is very common among some Protestant denominations to have programs that train veteran ministers to serve as interim leaders of churches.

No matter where an interim chief is found, he or she can buy a charity the time it needs to mend problems, if necessary, and conduct a thoughtful search for a permanent leader.

Nearly a year after the Committee for Green Foothills had hired a new executive director, the board found itself searching for another one.

The group, in Palo Alto, Calif., which attends planning meetings and keeps area residents abreast of plans for development, hired a consultant to help find the right person to lead the organization. In the meantime, the president of the charity’s board was filling in as executive director.

“As great as the president of the board was — and we had a fantastic one — you can’t have one person playing two roles,” says Chris Powell, a trustee of the organization. “It was exhausting.”

Ms. Powell says the board was skeptical when its consultant suggested that instead of jumping right into a search for the next leader, the board should hire an interim executive.

“But we did hire an interim,” she says, “and she was able to take the reins so the board could back up a little and not feel so frantic about filling the position.”

The interim was hired for six months, but ended up staying nearly eight months.

“Having an interim executive turned out to benefit us in ways that we couldn’t even imagine,” says Ms. Powell. “It gave us time to take a breather and think about what we were really looking for in an executive. It was valuable to have someone come in from the outside with a different eye. We revisited some of our policies, our governance, and board committees. Those things were working, but she helped us realize that they could work better.”

Ms. Powell credits hiring an interim leader for the group’s ability to attract a higher-caliber executive than it could have recruited previously: “I’m not sure we would have gotten to where we are if we hadn’t taken that step.”

Has your organization relied upon interim executives during times of transition? Or have you served as an interim leader? Tell your story in the Executive Session forum.