From Crisis to Success: Why Interim CEOs Could be a Game-Changer for Your Nonprofit

Jim Rettew meets with organizations going through transition.

Picture this: you're on the board of a nonprofit organization where your executive director just resigned, or worse, was fired. Finances are in shambles. Morale is in the tank. You have no succession plan. The board is burnt out, and no one from senior management can step in. You don’t have visibility on the depth of the problems, let alone the ability to attract a great candidate to take over this mess. You need an interim.

An interim executive director (IED) or interim CEO is hired to perform a full-time but temporary position while an organization goes through a period of transition, usually 6 to 18 months. We are not a babysitter, placeholder, or a traditional temp employee. An interim is skilled at cutting through the noise and chaos, of being the calm center of a brewing storm, breaking bad organizational habits, and solving a massive number of problems. An interim buys you time to find the right candidate without a gun pointed at your head, cleaning things up so that it's attractive to good candidates. 

The Rise of Interim Leadership

In its sixth annual High-End Independent Talent Report, Business Talent Group (BTG) reported a strong rise in demand for interim leadership. The 2023 report registered a 116 percent increase year over year for the need for interim leadership at all levels throughout organizations.  This is double what was reported in the 2022 report. Similarly, the Society for Human Resource Management (SHRM) reports that the nonprofit turnover rate is 19 percent, compared to the overall labor market turnover rate of 12 percent. That’s almost one out of five people in your nonprofit organization. 

The Benefits

Here’s what you’re gaining when you hire an interim.

Time: Many boards underestimate the time required to find a replacement executive director (ED) which can easily take four to six months. In addition, a board needs time to reassess the skill sets needed to achieve the strategic plan. Rarely will the new leader look like the old one, especially if the former leader has been there a while. With an IED in place, the board can take the necessary time to:

• Conduct an in-depth search for qualified candidates.

• Engage key stakeholders (staff, funders, and community members) in the hiring process.

• Align the search process with the nonprofit’s long-term vision and strategy.

This deliberative approach reduces the risk of making a hasty or poor hiring decision, ensuring that the new executive director is well-suited to lead the nonprofit into its next chapter.

Stability and Continuity: An organization can experience significant disruption when an ED leaves, as they are typically central to strategic planning, relationship management, and day-to-day operations. An IED brings immediate, experienced leadership that can keep the organization steady. They ensure that essential functions continue smoothly and that important relationships with stakeholders, including donors, volunteers, and staff, remain intact. This interim period allows the board and staff to focus on the organization’s core mission rather than being overwhelmed by the sudden absence of executive leadership. Their presence minimizes the risk of losing donor trust or damaging partnerships, which is particularly important for nonprofits that rely heavily on fundraising and collaborations to support their mission. 

A Fresh Pair of Eyes: Like people, organizations develop habits, and sometimes bad habits. However, once they’re ingrained, you can’t see them anymore. Interims not only bring in a fresh pair of eyes, but best practices from cross sector experience that jolts organizations out of bad behaviors. Because they are not entrenched in the organization’s internal dynamics, IEDs can identify inefficiencies, structural weaknesses, or unresolved challenges that might have gone unnoticed under the former leadership. 

Problem Solving: IEDs are often highly experienced professionals who specialize in guiding organizations through transitions. Every hour of every day, morning, noon, and night, we solve problems. It’s like a very strong and developed muscle. Remember Harvey Keitel in Pulp Fiction - “I solve problems.” I triage, prioritize, delegate, follow up, jettison deadwood, ask a ridiculous number of questions, and hold people accountable. Our skill set makes us particularly adept at handling the complex dynamics of change which can range from addressing financial instability to facilitating organizational restructuring. We can assess the organization’s immediate needs, implement short-term strategies, and position the organization for long-term success.

Temperament. IEDs are the calm, cool, collected center as a storm swirls around the organization. Staff and board may be experiencing a crisis, and the more things you do to address it, the more people develop anxiety about change management. Like a pilot, companies don’t hire us to fly the plane on clear, crisp, sunny days with no headwinds at level flight. They hire us to be Sully the pilot - to save the people and the plane even with multiple bird strikes, no useful engines, and not enough altitude. Not much phases us because we’ve seen it before. Not going to make payroll? Been there. Debt problems? Done that. HR issues? We can deal. 

Financial & Business Acumen. Sometimes organizations forget that being a nonprofit is just a tax-status, not a way of doing business. Money is the lifeblood of any organization, and nonprofits are no different. My first order of business is to improve finances, and the way I do that is implementing basic business principles. It seems like magic sometimes, but it's going back to fundamentals - balanced and conservative budgets, profit and loss statements, maximizing revenues, reducing expenses, and managing cash flow. 

Emotional IQ: Running an organization is all about managing people. People are emotional creatures. If the organization is in crisis, your employees are going through the ringer. They may feel abused, dismissed, unappreciative, wronged, insulted, disrespected, unheard, and admonished. One of my biggest roles as an interim is acting as an organizational therapist. I actively listen, ask questions, paraphrase what I heard, solicit feedback, and praise in public. I follow and promote a value system of ‘seek to understand, give the benefit of the doubt, assume positive intent, and realize there are multiple truths’. This helps calm frayed nerves so that everyone can go back to accomplishing the mission.

Cost Effective: IEDs bring flexibility and adaptability to their roles which is crucial during times of transition. They can step in on short notice and work full-time, part-time, or on a consulting basis, depending on the organization’s immediate needs. This flexibility makes them a cost-effective solution, especially for nonprofits facing financial constraints. Additionally, an IED can tailor their focus to specific areas—whether it's improving financial management, enhancing program delivery, or stabilizing internal operations—until the permanent leadership is in place.

Not Trying to Curry Favor: Up front, I tell my employers I am not going for the permanent position. Why? So they know I’m not trying to get on their good side. I must be able to give the raw, unvarnished truth to the board and staff, and if I’m trying to curry their favor in hopes of landing the permanent gig, I can’t do that. Our neutral position can also help resolve internal conflicts or realign departments to function more effectively.

The reason I do interim work is because it's incredibly impactful. During transitions, organizations are malleable. I can achieve years of positive change in a short amount of time. While the assignments are incredibly hard, it's often breathtaking to see how far an organization can improve in such a short amount of time. 

Every crisis represents an opportunity to transform your organization for the better. Hiring an interim executive director is a strategic move that allows nonprofits to navigate these periods with stability, confidence, and foresight. By providing expert leadership, objective insights, and the time necessary for a thoughtful hiring process, an IED ensures that the organization remains focused on its mission while preparing for a successful future leader. In short, an interim executive director is not just a temporary solution, but a strategic asset during times of transition.