You are here

Is founder's interest protected?

Your Legal Questions Answered

Is founder's interest protected?

I am the founder and president of my nonprofit organization and do not want any board to remove my authority. My bylaws say the president shall be a member ex officio of all committees except the nominating committee. Is this a secure wording to protect my interests?

Not by itself.  You don’t say that the bylaws provide that you shall be president as long as you wish and that the bylaws can’t be changed without your approval. And being a lone voice on a committee that wants to do something you don’t think is appropriate is not a whole lot of protection.
The ultimate protection for a founder is to create a membership corporation in which the founder is the sole member and changes can’t be made without his or her approval.  (See Ready Reference Page: “Sole Member Bylaws Can Protect Founder of Nonprofit)  I get a lot of flack when I suggest it, but I don’t know any other way to truly protect the founder’s interest.

Sunday, October 16, 2011


I am responding to the comment above, I believe that most founders suffer from the founders syndrome, if the founder wants to remain the president until he/she wants to be removed then the founder should create a for profit entity, the non profit is not theirs, it is for the public. There comes a time when even the founder should be removed. 

As I said, I usually get a lot of flack when I promote this idea, but I have seen too many founders who have spent years creating an organization as their career at significant personal sacrifice, only to lose their job when their "friends" on the Board think it is time to go in a different direction. If the friends want to do something else, they can quit the Board and set up their own organization.

A founder can't act arbitrarily with the Board or the founder will lose directors and ultimately general support. But when the organization depends on the vision, energy and sacrifice of the founder, I think the founder needs some protection against the vicissitudes of those who are less involved on the Board.

The transition from a founder is difficult under any circumstances. I don't think it is made particularly more difficult with the sole member structure.

Add new comment

Sign-up for our weekly Q&A; get a free report on electioneering