Nonprofits Facing Wave of Leader Retirements
John Manasso
May 2, 2008

After taking over from one of the nonprofit's founders, Jack McMillan presided over TechBridge for five of the organization's eight years of existence.

McMillan recently announced his retirement at 53 and plans on working part time and on certain projects.

With a generation of leaders set to retire in the coming years, many nonprofits face stressful changes -- as baby boomers hit retirement age and other "legacy leaders," those who founded their organization and presided over it for years, call it quits.

According to a 2005 study done by the Georgia Center for Nonprofits, 42 percent of nonprofits will lose their leaders over the next five years -- as many as 72 percent in some sub-sectors, such as mental health. While often under the radar, nonprofits comprise 7 percent of the local economy, according to BoardWalk Consulting LLC.

"It's an issue that's received a lot of attention with a lot of reports predicting big needs for nonprofit leadership positions in the next few years," said Georgia State University professor Dennis Young, who directs the school's Nonprofit Studies Program. "It's a more nuanced issue than so many people think with retirements, demographics and other forces."

In addition to McMillan, others who will retire this year include Fred Bradley of the YMCA of Metro Atlanta, the sixth-largest nonprofit in metro Atlanta in terms of revenue, as ranked by Atlanta Business Chronicle's 2007-2008 Book of Lists; Jerry Tipton of Boys & Girls Clubs of Metro Atlanta (No. 17), Judy Heilman of Girl Scout Council of Northwest Georgia Inc. (No. 25); David Coleman of Atlanta Union Mission (No. 32) and Spurgeon Richardson of the Atlanta Convention & Visitors Bureau. Smaller institutions such as Jerusalem House (which has since found a successor), the Latin American Association, the Southeast Council of Foundations, the Atlanta Civic League and the Atlanta Urban League have seen their leaders announce their retirement or leave already this year.

The United Way of Metro Atlanta Inc., The Marcus Institute Inc., the Robert W. Woodruff Foundation Inc. and the Woodruff Arts Center are others that rank among the area's largest that have gone through retirements in recent years.

David Martin, 63, executive director of the Georgia Council on Economic Education, said he has begun talking with various committees on his board to discuss his successor.

He has attended a seminar run by the Georgia Center for Nonprofits that he said was very beneficial. When he ultimately decides to retire -- a timetable for which he has yet to set -- he said he will inform his board after its annual meeting in May and then form a transition team for the following year.

He said many nonprofit leaders' greatest fear is that after so many years of service, the wrong person will be hired and the organization will implode. He also said it is difficult to groom internal successors in small organizations and younger people sometimes seem daunted by the responsibility of being the person in charge.

"You don't want to devote your life to something and watch it get washed down the toilet in a year," Martin said.

Karen Beavor, who runs the Georgia Center for Nonprofits, said her group needs to do a follow-up study. Other states have done so and found that the crisis is not as acute as they originally thought. One reason is that, perhaps because of the economy, more people are staying in their jobs longer.

Young, of GSU, said he thinks a big issue that nonprofits face in terms of finding a successor is compensation. He thinks that nonprofits might have to examine their compensation structure in the coming years and increase it to find the leaders that they want.

BoardWalk Consulting does executive searches for nonprofits. The group's Kathy Bremer said she thinks enough candidates in the for-profit sector will seek "encore careers" -- ones after their business careers end, such as several lawyers who have left prominent firms to head large local nonprofits -- and help to fill the void. Another example is Jim Breedlove, who left AT&T Inc. and took a position with the Fernbank Museum of Natural History.

She said typically searches yield about 100 candidates, about half of whom are from out of state.

Those who are looking for an "encore" to their business career also come with the luxury of not needing or demanding high compensation.

When McMillan took over at TechBridge, he was such an example.

At 47, he took off two years, coming off a successful career as a consultant at Accenture Ltd., before he took over TechBridge. He understands the enormity of what his successor will face.

"It takes a fair amount of effort to drive that -- to say nothing of the day-to-day management of an organization that's growing rapidly. ... You don't have an overabundance of personnel to get that done. ... It takes a fair amount of effort to make this thing work."