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How does founder pass the torch?

Your Legal Questions Answered

How does founder pass the torch?

I am the founder and president of a small nonprofit animal rescue group. I would like to retire from work and from the organization. How do I pass my nonprofit on to someone else who will take on full responsibility so that I do not have to have any further part in the organization?

Structuring the transition from a founder to a successor leader or successor board can be difficult, but it is critical for you to know what you need as a result.  Do you have a financial need for the organization to remain in existence to provide you with retirement pay or a small consulting income for future years?  Do you have a psychological need to see that the organization continues as part of your personal identity, or would you be able to walk away totally and not worry if the organization failed immediately?

If you are the sole member of the corporation, you may have the legal authority to appoint a new sole member who would have the founder’s power of ultimate control as you have.  (See Ready Reference Page: “Sole Member Bylaws Can Protect Founder of Nonprofit”)  If, as is more likely, you are simply one of the members of a larger governing board, your leverage is primarily persuasion.  They could get rid of you tomorrow if they wanted to do so with no future commitments and you wouldn’t have much choice in the matter.

In either case, you ought to let the other board leadership know what you are thinking about and plan with them the strategy of the transition.  Hopefully, you can together identify a person who is willing to assume the presidency and provide the kind of leadership you have provided until now.   Or at least you could agree on a method to find that person in the near future.  If you are not the sole member, the current board, augmented as it may be with new blood from people interested in your mission, will make the ultimate decision.

If you can agree on a transition plan, you can begin to advise your stakeholders so that you don’t lose any momentum during the switch.  It could be an opportunity for a major fundraising effort in your honor.

If you are the sole member and can’t agree with the current board, you could appoint a new board and resign, or simply shut the organization down if it wouldn’t interfere with your financial or psychological issues mentioned earlier.  If you are only an officer and member of the board, you can give the others reasonable notice of your intention to resign and simply walk away.  That doesn’t seem like a particularly appropriate end for all of the work you have done since the beginning.  It makes much more sense for everyone to plan the transition and the efforts to continue the work of the organization under the most favorable circumstances. 

Wednesday, December 20, 2017

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