Whose nonprofit is it anyway?

Call it founder's syndrome, the succession slump, or something not suitable for work, when a nonprofit leader moves on, the process isn't always easy. But when control of a signature program or the organization itself is on the line, questions about who has ownership over a nonprofit can be organizational life-or-death. We who work in the field give so much, but sometimes it's hard to know, whose nonprofit is it anyway?

An all too-common tale

Allow me to share a story about a small, community nonprofit. The organization, which used cultural immersion experiences as an educational tool, was founded by a dedicated woman who had worked for decades as a school teacher and then began the 501 (c )(3) as her passion project. To make it sustainable, she spent three years serving as its unpaid executive director and board president.

But now, the undertaking was in its tenth year, and the programs it originally operated weren't financially sustainable. New arts organizations in the area had been partnering in a side-by-side program that was gaining more donor interest, more student impact, and more positive volunteer opportunities.

Other board members had tried to broach the idea of shuttering the original effort to leave more resources for what was working. But the founder insisted that to do so would destroy her vision and that she wasn't going to let that happen. The founder no longer served as executive director, and even though she also no longer held the board chair role, she still sat on the executive committee where she held outsized sway.

More and more, staff felt disillusioned and board engagement flagged. Conversations about ousting the founder surfaced, but people were nervous about divorcing the organization from its charismatic originator. Many worried that asking her to step aside would be seen as an insult to her work. Some asked, "Wasn't she entitled to have more say than others?"

Ultimately, a crisis in finances led to an ugly showdown where the founder left, and some donors followed. It took a few more years for the organization to regain its footing.

Is this the plot of a telanovela? The play-by-play of the next workplace thriller? Sadly, no. Our tale serves as an all-too-common trope for what happens when someone has a great idea and turns it into a nonprofit but fails to understand that they are never the "owner." They are merely one steward of the nonprofit assets which are ultimately the responsibility of the board.

There's no copyright on charity

Whether it's a member of the board, staff, or even an important donor, the issue of who has ownership of an organization can be a source of many a nonprofit headache. While those who begin nonprofits invest incredible personal resources to see the start-up's success, healthy organizations need to recognize that they are only stewards on behalf of the public.

Not-for-profit rarely means not-without-ego, and it's natural that individuals who give so much want their efforts to match their ideals. So what's the solution?

We've been gathering insights into this crucial topic, but we'd like your input as well. Tell us what you think. How have you dealt with this important but challenging topic, and what has your organization done to make sure that everyone understands that nonprofit stakeholders are stewards, not owners, of nonprofit assets.

How does the sector's unique mandate to, above all, do good, impact decisions? And how does one make those transitions as smooth as possible? Let us know your thoughts by taking our survey here. We'll follow up in our next issue!

Comments (5)

  • Anonymous

    That this question is even being asked indicates a problem. It should be obvious that personal ownership of a nonprofit is an inherent contradiction for work that is mission-based, and is both conceived and provided as a public benefit.

    Aug 01, 2017
  • True enough, but with all things nonprofit (and in the private sector, for that matter) best practices and reality don't always align. After all, haven't we ALL had a donor that made demands to which we acquiesced, even if they weren't strictly in the organization's best interest? Haven't we all seen a board member who tried to manage day-to-day activities of employees? While those who work in nonprofit should do so with the intent of serving the whole, reality sometimes (often?) doesn't agree. Thanks for the comment!

    Aug 26, 2017
  • As a lawyer working with non-profits for almost fifty years, I can assure you that fairly often the "founding mother" will not acceed gracefully to the vision of others. Times change, communities change, and sometimes it requires a lot of tact to persuade a founder to let go. Boards need to foresee this and do what they can to look ahead and smooth a transition.

    Oct 04, 2017
  • In a similar vein the major corporate donor and the influence over the mission of non-profits. How do we navigate through this stage and keep the resources we need? i.e. can we have our pie and eat it too!

    Oct 04, 2017
  • I bristle every time I hear of ousting a founder for the greater good. The title of this article asks who owns a nonprofit. The legal answer is the community it serves. Nobody owns a nonprofit, not even the founder and certainly none of its current leaders. But, if the legal answer was all that was intended, this would have been a very short article. Perhaps it’s a flawed title.

    Assuming that “founderitis” or other derogatory terms for founders staying with their organization, is indeed the topic here, I am happy to offer an unpopular viewpoint in favor of founders. Nonprofits are begun because of a particular vision, an endpoint that they are meant to achieve. Very few people are visionaries, so that vision must come from one or a few founders. Visionaries thrive on the journey toward their distant goal.

    If a nonprofit is floundering and the founder/visionary has lost touch of that goal, I would first suggest working as a respectful team to refocus that founder and learn once again from them the details of their original end goal. They may have taken on a role not suited for them, perhaps a detail-oriented role that most visionaries are lousy in. A simple role change should do the trick. If the founder is burnt out or has suffered a mental disability, of course they should move on, but if not, there is no good reason to oust them.

    By respecting the founder, you are respecting the existence of the nonprofit. When you oust the founder without cause, you are not only acting like brutish barbarians against this visionary, you are stomping on their work to start your own nonprofit aimed at your own definition of “doing good,” using their work as your shortcut.

    Be honest about your intentions. Don’t hide behind this concept of the whole board being a single mind. Healthy boards are made up of individuals who each thinks critically. Otherwise all you have is groupthink. If you are ousting the founder so that you don’t have to go through all the trouble of starting your own nonprofit, don your black hat firmly on your head and go for it. But please don’t boast about ousting your founder as if it is for the greater good.

    Sue Knaup, Executive Director (and founder) of One Street
    www.OneStreet.org

    Dec 12, 2017

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