Roles of Interim Executive Leadership in the Nonprofit Sector

A chief executive’s departure rarely stays inside the executive office.

Staff interpret silence, as do funders, when they have no idea who is in charge, and programme managers wait on decisions only the highest job can make. The board finds out in a flash how much organisational memory one man has.

The inclination is to fill a chair quickly, but the more important question is what it's for. An ongoing process is one thing; setting in place a culture that is ready to hand over legacy is another.

With good mutual planning, interim leadership is a clear task, not a temporary fill-in - in the interim, normal business operations, stakeholders' confidence, issues aren't hidden behind the scenes, working structures are not merely maintained, and a bridgehead is established for the following leadership.

What Is Interim Executive Leadership in the Nonprofit Sector?

Interim Executive Leadership is the placement of an experienced Executive Director who has also served as a transition facilitator or is provided to assist the nonprofit in providing continuity and stability until long-term Executive leadership is established.

The mandate for the role is established by the board, preferably in writing, and the interim is subject to the board or the chair, with a clear purpose, end point, and deliverables. In England and Wales, ‘interim manager' can also mean a person serving as the interim chief executive of an organisation, but is used in a specific way to refer to the appointment of an interim manager, not a chief executive, by the board of directors during a statutory inquiry, rather than an interim chief executive overseen by the board of directors.

Recommended Read: Here are the leadership pipeline risks you must consider.

What Does an Interim Executive Director Do?

Delegates authority to the board, which carries out all of the above on a day-to-day basis, leads staff, manages finances, maintains funder relations, and reports to board trustees/directors: interim executive director. The board will be governed and have oversight, whilst the interim will be responsible for management. “Everything they do is temporary” is the definition of their job: to stabilize, properly assess, and prepare, “not to make an individual legacy.”

How Interim Nonprofit Leadership Differs from Permanent Leadership?

What makes the difference is what it means to mandate, the time horizon, and what constitutes success. Whereas an interim is engaged to keep the organisation stable, identify deep-seated issues, and hand over smoothly, because they are appointed to serve the organisation for a few years.

That does not reduce an interim to a caretaker, as boards can still authorise substantial change. An acting executive, usually an internal colleague temporarily, sits between the two. The written mandate has far more significance than the word because the terms “acting” and “interim” are not consistent in organisations.

When Does a Nonprofit Need an Interim Executive?

The announcement must be made abruptly; the search may take months if the company shows signs of instability, if one of its founders is leaving, or if the board wants to get an impartial diagnosis before filling the permanent job.

Shifting the power within the company can be helpful when a departure occurs, and operations are regular and when there is, in fact, someone who can do the job. But soon after that person remains on the job market (they have a full-time occupation) or is vying for a permanent job, internal cover crops begin to take over.

Why Interim Executive Leadership Matters for Nonprofit Organisations?

Maintaining Continuity During Executive Departures

There has to be someone who can sign it, approve spending, and make decisions that must be made on the spot. If not delegated, decisions build up and form in a non-formal and non-public way. A leadership transition plan is recommended by the National Council of Nonprofits when a leader needs to pass on their position suddenly, as a contingency.

Protecting Mission Delivery and Beneficiary Services

The benefit of a governance transition is not that the beneficiaries get new leadership; they are not deprived of an appointment with leadership, or they have not received a payment. A named executive with the authority to make commitments and used to enter into contracts maintains service commitments and contractual obligations to someone with the power to act.

Supporting Staff Confidence and Stakeholder Trust

Staff monitor closely to ensure that there are indicators that someone is taking charge, and what that is. A helpful interim is clear about what's known, what still has to be figured out, and when they will get another update, and it doesn't mention anything that the board hasn't agreed on as an outcome. A long-time funder who waits and sees when it comes to a new direction in fund leadership faces the risk of losing critical funding, as the National Council of Nonprofits swears: "As a longtime funder, you should never take a wait-and-see approach about a fund's direction or leadership.

Managing Organisational Change and Uncertainty

Clarity of mandate empowers the interim to be able to pause to think before taking action, identify thin controls, at-risk commitments, and deferred decisions. If needed, otherwise necessary change is not done, or if it is, it is done by irresponsible people.

Creating Time for a Thorough Permanent CEO Search

Rushing an appointment often leaves a board with a leader chosen for an organisation that has already moved on. Interim cover buys the boardroom time to define the permanent role and test candidates properly while grant commitments, donor expectations, and governance stay on track. Bridgespan’s guidance highlights that pausing to clarify what the organisation truly needs helps ensure the incoming executive does not become an “unintentional interim”.

Key Roles and Responsibilities of an Interim Nonprofit Executive

#1: Providing Strategic Leadership and Direction

The first strategic one in the interim will be protective, to preserve the mission, our commitments, and priorities for our operations, as well as to determine what we need to accelerate, what may be coasting, and what is endangered.

Maintain three levels of action: go with the existing strategy in the interim; discern and recommend a change of strategy to the board; approve a major change of strategy to the board, unless delegated. Effective interims put those boundaries in writing during week one.

#2: Collaborating with the Board of Directors and Trustees

Be sure to determine the decision rights: whom to brief on interim (typically a transition committee); board return of interim and how urgent calls are acted on between meetings. In England and Wales, the Charity Commission guidance says that trustees shouldn't be able to delegate total responsibility, must put limits on delegating in writing, and shouldn't delegate high-risk or unusual decisions. Come to an early agreement on priorities, review points, and reporting frequencies; set and post boundaries; trustees to be managed and interim to govern.

#3: Managing Financial Performance and Risk

The interim first examines cash flow, obligations for restricted funding, budget versus actuals, and grant reporting deadlines, tightening up controls as well, not in place of, the finance director or treasurer or audit committee. BoardSource guidelines give staff responsibility for budget development and the board responsibility for the budget's approval, and the Charity Commission states that all trustees are equally accountable for the committee. The interim will make sure those duty-holders can have precise and up-to-date figures.

#4: Leading and Supporting Employees

Staff have questions about who makes the decisions and whether their jobs will be secure and the uncertainty period will continue. Empathy in the workplace means listening early and honestly naming concerns, while setting clear expectations, and not promising jobs that the board hasn't approved. Talk with those who have deep knowledge of the organisation's operations that can't be replaced. 

#5: Maintaining Donor and Stakeholder Relationships

Each donor, institutional funder, regulator, community partner, and group of beneficiaries needs a unique message as well as a buy-in commitment with strong adherence to the application of discipline.

• Timely updates

• Accurate facts

• Reliable follow-through

Maintaining steady contact ensures donors' confidence; a good beginning is to chart for the next six months: which commitments are made by which donors and mark who is the owner of each.

#6: Overseeing Programmes and Mission Delivery

Through interim reviews, capacity, delivery risks and performance are reviewed to safeguard essential services first. This is not specialist programme leadership or domain judgement: programme directors or leads continue to hold that. The interim is more about providing options to the board when a cost saving conflicts with a service commitment than deciding for the Board.

#7: Managing Change and Organisational Challenges

Interims often take over poorly-managed processes and delayed decisions along with unresolved conflicts. “Proportion” is the test for action--what causes low regret? What is urgent? What is within the mandate? What can we leave in a parking place for the next leader? If there's uncertainty about viability, then a compromise plan can lay the groundwork for a significant restructuring of operations.

#8: Preparing the Organisation for Its Next Permanent Leader

Handover preparation starts early. Risks, commitments, key relationships, and unresolved decisions are uncovered by a good interim document. They are stated clearly to the board: what issues the new guy will have and what he may lack, such as the presence of a single person to hold the key to the funds, or a thin second-tier management.

Just 29 percent of the nonprofits had a written succession plan, a survey revealed. The interim’s findings should shape the permanent role profile, and in most cases the interim should not be a candidate.

What Are the First 30, 60, and 90 Days of an Interim Executive’s Role?

Treat this table as a flexible planning frame rather than a rigid rule. Many assignments run well past ninety days while others finish sooner, and an immediate cash shortfall or safeguarding issue will reorder priorities overnight. Whatever the timeline: listen before changing anything, confirm the mandate in writing, and give the board a candid written assessment before the first formal review.

Interim Executive Director vs Permanent Executive Director

What Skills and Qualities Should a Nonprofit Interim Executive Have?

It depends on the issue - there needs to be a certain level of profile for a certain period of continuity, but for getting over a funding cliff, there has to be a period of continuity in a polarized boardroom. Work first from the mandate, second on the abilities.

Nonprofit Governance and Board Management

Be comfortable in a board/board meeting, having a strong understanding of delegated authority and good practice in delivering bad news early. Seek signs of working collaboratively with trustees when there is disagreement (not merely under easy times).

Financial Acumen and Risk Management

Quickly read the accounts, identify potential risks early, and not second-guess risks from finance specialists. Inquire of candidates about a control that they identified as weak and what measures they took to rectify the weakness.

Stakeholder Communication and Relationship Building

Reliability of weekly meetings with staff, funders, trustees and partners. Discuss approaches in conveying unpleasant information to those who relied on them.

Change Management and Crisis Leadership

Clear discernment as to what to improve upon and what to leave as it is. If an answerer can account for a decision in which they chose not to act but wanted to delay, and why they chose this, they have a good idea about interim work.

Strategic Decision-Making and Emotional Intelligence

Considering short-term and long-term issues/expectations and making compromises between the two and other people. The emotional intelligence that's displayed in turning around both a cautious employee and an assertive trustee in what would seem like the same day.

Experience With Nonprofit Funding and Mission-Driven Organizations

Restricted funds, conditions of grants, programme accountability, and trade-offs on mission are not as conventional as a commercial profit and loss account. Prioritize skills to demonstrate (to justify best practices) over impressions from sector pedigree; develop the ability to demonstrate and justify the skills and best practices from structured executive assessment, rather than impressions.

Common Challenges in Interim Nonprofit Leadership and How to Address Them

Resistance to Temporary Leadership

Staff can challenge or conflict with their actions and “resist the transition or delay implementation”. The leading edge of real authority is board support and early compliance with small decisions/gifting, so there is a need to clearly communicate what the interim is allowed to make.

Uncertainty Among Employees and Donors

Communicate the known, the undecided, and when the next communication will be provided, and stick to it! Silence is interpreted as bad news; don't try to fill in with not-so-tactful assurances that the board fails to support.

Limited Time to Understand Organisational Culture

Apply structured listening (one-to-one listening at levels, listening to minutes of boards and key documents, and discussing initial impressions with someone who has a different opinion). Consider first assumptions to be hypotheses for the first few weeks.

Unclear Board Expectations and Decision Rights

Most conflict is avoided with a written mandate, there is one named board contact, there is an escalation path, and there is regular review. Practitioner research, undertaken by Third Sector Company, revealed that board readiness was the number one criterion for the success of an assignment, in the eyes of interim leaders.

Balancing Immediate Needs With Long-Term Priorities

Break down decisions into the following three buckets:

• Urgent and reversible (the interim decides now)

• Urgent but binding (goes to the board)

• Important but not urgent (held for the permanent leader)

How Should a Nonprofit Choose the Right Interim Executive Leader?

Don't underestimate the potential of an interventionist with a good idea of what needs to be done in a stable charity seeking continuity, or a strong and result-oriented manager in running down a financially challenged charity at a time of dire need for its desperately needed programs. Whatever you can do to find the candidates, follow 5 steps to make it work: in your networks, through referrals, or an interim executive search firm.

Define the Leadership Gap and Appointment Objectives

Record reasons for the seat being vacant, top 3 risks, what is expected to happen, and the needed skills. If different, then iron out the issue first, considering answers given by trustees.

Assess Nonprofit & Sector Experience

Try to find an example at a similar level of scale, funding, and stakeholder complexity and scope of transition experience. 501 Commons points out that interim leadership is a phenomenon of its own and that, in fact, even if someone is a permanent executive director, it does not necessarily make them an effective interim.

Evaluate Leadership Style and Stakeholder Management

Undergo interviews concentrating on the values of judgment, communication, empathy, and discretion. Tend to speak to at least 3 client references lately and pose each of them the query, "How did she go about dealing with a board disagreement?

Establish Authority, Duration, & Success Measures

Write the mandate in a written contract of delegation to include scope of work, reporting requirements, duration, compensation, scope, and indicators of success. 501 Commons' recommendations are to ensure the interim is able to make decisions and has the backing needed, and to seek local legal advice regarding the distinction between employee and contractor status.

Plan the Transition to Permanent Leadership

Separate the job of stabilising from the job of succession selection: Sessions and Feedback to brief finalists about organisational health may come from stabilisation instead of actual succession selection. Make arrangements to agree terms of handover and overlap with the incoming CEO, early on.

Interim executive selection checklist

• Relevant executive and nonprofit experience, ideally at comparable scale

• Availability and suitability for the expected duration

• References and evidence of previous interim or transition assignments

• Conflicts of interest and independence, including any interest in the permanent role

• Leadership strategy and governance with stakeholder management

• Compensation and contractual expectations

• Reporting arrangements and delegated authority

• Confidentiality and appropriate information handling

• Board-approved objectives and success measures

• Handover expectations and coordination with the permanent executive search

This checklist is intended to provide recommendations, but does not constitute legally binding conditions or requirements in any jurisdiction.

How to Measure the Success of an Interim Nonprofit Executive?

Put the measures in place on day one, don't at the leaving meeting. Useful indicators include:

• Continuity of essential programmes and services

• Financial visibility, control improvements and risk mitigation

• Employee retention and engagement, where reliable data exist

• Candid, timely board communication and governance reporting

• Donor and stakeholder confidence, judged on evidence rather than assumption

• Progress against agreed transition milestones

• A documented record of key decisions and outstanding risks

• Readiness for the permanent executive’s arrival

Don't conflate leading indicators with ultimate results: timely reporting provides a stronger level of supervision but doesn't tell you if it is sustainable financially in the long term. Don't use general numerical goals; there are different numbers depending on size, baseline, risk profile and mandate.

How Executive Search and Leadership Advisory Can Support Nonprofits

A board, with the assistance of a specialist partner, sets its actual need and mandate as a leadership profile, assesses its temporary candidates against the organisation in terms of that profile, and ensures that the permanent candidates complement it to become a powerful force working together.

While recruitment is hyperactive in the interim, the tests are designed for stabilisation, independence and immediate impact rather than tests that look over several years, as do the permanent searches. Coordinating both allows the interim’s diagnostic findings to inform the permanent brief while keeping the interim independent of candidate selection. 

Whether you're looking to recruit to the C-suite, to fill empty board seats, understand your organisation through a leadership assessment, profile executive leadership, map out talent across your organisation or plan for succession with The Taplow Group. We offer global executive search and executive interim and leadership advisory services to charities, NGOs and foundations.

Building Leadership Continuity in the Nonprofit Sector

It is important to involve it in a certain job and not as a temporary one, which can help in overcoming difficulties of transition at the start of its new phase of leadership. When executed properly, it can safeguard the delivery of missions, enable board oversight, ensure smooth, everyday operations, highlight many of the risks that arise immediately, and give the new chief the organization to lead. 

As much as the individual is the setup: clear, written mandate, co-operative trustees, matched authority and agreed success measures.

For purpose-driven organisations, The Taplow Group's not-for-profit practice provides designed executive search and advisory services for boards in their interim appointment and/or a permanent search process.