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- Succession in founder-led NFPs is rarely as simple as replacing a CEO as founders carry institutional memory and a “halo effect” that can’t easily be handed over.
- At Orange Sky, co-founder Lucas Patchett says testing succession in practice, investing in internal talent and embedding culture have been critical to building resilience.
- As governance expectations rise, NFP boards are being challenged to treat succession not as a contingency plan, but as an ongoing discipline.
“You can’t replace a founder, but you can replace a CEO. Ninety per cent of my role can be replaced. But there are a few small percentage points that can’t.”
For Orange Sky co-founder and chief executive Lucas Patchett, the distinction isn’t ego, it’s operational reality.
Succession in founder-led organisations is often framed as a neat governance exercise: identify successors, document roles, build a bench. But “there’s some stuff that is just the founder's story,” Patchett says.
“That’s our story to hold and to share… we’re the custodians of that.”
That tension – between what can be systemised and what can’t – sits at the heart of succession in the NFP sector, and increasingly, it’s being tested.
At Orange Sky, an NFP supporting people experiencing homelessness or hardship through access to free laundry and shower services, it wasn’t left to theory. Patchett stepped away for three months on a sabbatical, handing the CEO role to an internal leader. “The place keeps trucking on,” he says. “Volunteers are still going out… people rally around and solve problems.”
But his absence exposed a subtler risk: “There’s a certain halo effect around a founder.” Sometimes, he explains, the team assumes he and his co-founder have “a magic wand” to solve everything. “That’s actually not the case. So myth-busting that has been really valuable.”
That assumption is exactly what succession planning must dismantle.
From contingency to discipline
Across the sector, succession planning is shifting from a reactive exercise to something more deliberate. For local NFPs, this isn’t just best practice, a formal succession plan that identifies critical roles, contingency arrangements and transition timelines helps ensure compliance with ACNC governance obligations, particularly Governance Standard 5 on director duties.
“The one overarching theme is intentionality,” says governance adviser Rachael McLennan. “The organisations doing this well are thinking about succession continuously, not as a moment in time,” she explains.
The strongest organisations treat succession as a discipline, she adds. They forecast leadership needs, build capability early, and review plans regularly.
“You are a custodian of the entity,” McLennan says. “You hold it for a period and hand it on.”
But for founders, that’s easier said than done.
Building from within
One of Orange Sky’s clearest lessons is where leadership should come from. The truth, Patchett explains, is that external hires haven’t always worked.
“Where we haven’t had success is trying to recruit an executive from another organisation and transplant them in,” Patchett says.
Instead, the organisation has doubled down on internal development, often promoting people already steeped in its culture and operations. “We’ve had much better success where someone is on the right trajectory,” he adds. “It might be a step up, but it’s in the direction they’re already travelling.”
One senior leader started as a volunteer, moved into finance, became CFO and later stepped in as acting CEO during Patchett’s sabbatical.
Culture does the heavy lifting
Ultimately, succession at Orange Sky is cultural as much as structural. Every new hire, regardless of seniority, attends a volunteer van shift before being offered a role.
“Every single person will go to a shift,” Patchett says. “That’s a really important point to see what we do.”
The aim is simple – alignment before appointment, because values, left abstract, don’t scale.
“How do they actually show up?” he says. “For us, we like to see how values actually manifest and actually show up, so it’s part of recruitment and part of our performance cycles.”
That cultural grounding becomes critical when leadership changes and addresses a broader challenge in founder-led charities. Namely, research shows that when leadership is overly dependent on founders, transitions often falter: boards are uncertain, staff disengage and organisational identity can weaken.
But by deliberately developing internal pipelines, Orange Sky builds resilience, continuity and shared ownership of its mission.
What can and can’t be replaced
Even with structure, testing and discipline, one thing remains: founders leave behind more than roles. They carry the origin story, the vision, early decisions and the informal authority that can’t be fully documented or delegated.
That doesn’t make succession impossible, but it can make it uneven. “Succession planning for my role as CEO and my role as founder are two separate things,” Patchett reiterates.
The distinction is uncomfortable, but ignoring it is even riskier. The real test isn’t whether the organisation survives without the founder, it’s whether it learns to operate as if it already has.
Key takeaways for NFPs
Founders are irreplaceable; operational roles are not.
Test succession in practice, not just on paper.
Invest in internal talent and align with culture.
Normalise turnover and career progression conversations.
Right-size plans for your organisation; small NFPs can’t replicate corporate structures.
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