Does the thought of a person or group changing your nonprofit beyond recognition send shivers down your spine?
We’ve seen it a hundred times—faith-based organizations turning away from their founding principles, programs for women-only, expanding to serve men, etc.—all because the board decides to take the organization in another direction without the founder’s approval. And what keeps many nonprofit founders up at night is that this is usually done legally.
While some change is inevitable and even beneficial, nonprofit founders often feel strongly that the organization they poured their blood, sweat and tears into launching should stick to certain core values. They want to be sure that when they step away, retire, or if something happens to them, that the organization will continue to align with their vision.
If you share these fears, you’re in good company, and this article is for you.
How Can I Make Sure my Nonprofit isn’t Taken Away from Me?
One thing nonprofit founders (understandably) struggle to understand is that they do not “own” their nonprofit. Even if you were instrumental in providing the seed money, setting up the programs, and recruiting the board, the organization is not legally yours. Therefore, a nonprofit cannot be “stolen” or “hijacked” in a legal sense.
Instead, nonprofits are governed by the board of directors. As the board makes decisions, it follows the organization’s governing document, known as bylaws. Since no one person can call the shots when it comes to the nonprofit, votes and elections are key. This protects the nonprofit from nightmare scenarios like one rogue board member and ensures there are ways to handle those moments in a fair, reasonable way.
Nonprofit leaders who are concerned about “mission drift” (the organization changing course from its original purpose) will want to start with their organization’s documents when trying to protect their nonprofit from straying from its path. While there is no way to make 100% sure that a nonprofit never changes its trajectory, there are ways to make its founding values last long term, both in your legal documents and in your organization’s team culture.
Build Founder Protection Language into your Bylaws
Maybe you’re starting a private school and you want to ensure that it sticks to its faith-based roots.
Maybe you’re starting an animal rescue specifically for farm animals instead of household pets.
Maybe you’re a mental health organization and want to make sure your programs adhere to a certain approach to care.
Whatever it may be, build your non-negotiables into your corporate documents and include language in your bylaws about how board members can (and cannot) make changes to those aspects.
One way our nonprofit attorneys accomplish this for some clients is by adding “founder protection language” to their bylaws and articles of incorporation. This sets up a structure for your board of directors that grants founding directors the most staying power, allowing institutional knowledge and founding values to be carried on longer. This structure splits the board into two tiers: we’ll call them founding directors vs. ordinary directors. If you’d like founder protection language drafted, our nonprofit attorneys do this regularly, so reach out to us.
Your founding directors are people you recruited with your core values and united vision. Founder protection language:
- Gives founding directors the longest term lengths and the ability to be reelected
- Ensures founding directors can only be removed by unanimous vote (you can read this separate article about removing board members)
- Provides a predetermined set of causes for removal of founding directors that ordinary directors do not have
One way to protect your specific mission is to require that your organization’s purpose language or founding principles require a unanimous vote to amend.
Keep in mind that founder protection language can have some drawbacks. If not done correctly, there’s a possibility that a board can become locked in a standstill if the bylaws are incredibly restrictive. An inflexible board can harm an organization more than a board that often disagrees, and it’s good for boards to have some rabble-rousers.
Additionally, the board of directors take on different roles in different stages of the lifespan of a nonprofit. The ability to shift goals and strategies when needed is an essential leadership skill, one that can be easily hindered if founding directors are too limited by their bylaws to make necessary changes.
If your nonprofit is looking to add founder protection language, reach out to our legal team. We’d be happy to share about what this could look like for you and see if these changes would help or hinder your organization’s ability to achieve its mission.
Avoid “Founder’s Syndrome” via Succession Planning
“Founder’s syndrome” is the phenomenon where one or more founders cause problems for their organization due to a disproportionate amount of power and a refusal to trust others with key decisions. In plain English, Founder’s syndrome is when a nonprofit founder doesn’t trust anyone but themselves to run the nonprofit, and it can be a deadly cancer for some small nonprofits. Founder’s syndrome, if not handled, can cause the nonprofit to die when the founder retires, leaves, or passes away, because the organization wasn’t handed over to anyone else to help run it.
A nonprofit leader with founder’s syndrome might:
- Undermine the nonprofit’s executive director, publicly or privately
- Micromanage program directors and staff
- Disregard feedback and constructive criticism
- Surround themselves with people who support them personally instead of supporting the mission first and foremost
- Oppose conversations about a transition of leadership (passing on the torch)
If these descriptions resonate with you, all is not lost—there is a cure to founder’s syndrome: succession planning.
Succession planning, put simply, is your strategy for how the organization will carry on without you at the helm. The best leaders are the ones who can instill their vision in others and create something sustainable that will continue to thrive once they’re gone.
First, make sure you have a procedure in place for who will fill your role once you step away (or if something prevents you from fulfilling your role). For example, if an illness forces you to resign as executive director, is there a program director that could serve as interim? If you’re the board president, will the vice president fill your shoes when you retire? Also be sure to identify who will help find your replacement if there isn’t a clear replacement already involved with the organization.
Second, be mindful of the culture you’re cultivating during your tenure. Whether you are in the beginning phases of starting your nonprofit or have been operating for some time, recruit board members who are like-minded individuals and are truly passionate about your mission. Together, identify your non-negotiables and set a standard for future board members. Ask for accountability to make sure the organization isn’t too founder-centric.
It might also be helpful to create a Code of Conduct that outlines appropriate behavior for board members. A Code of Conduct (also called a statement of values or a code of ethics) outlines the key values of your nonprofit and how your board and staff should act according to those standards. It also outlines what would happen if someone acted outside of the values and standards of the organization, which can help give a founder peace of mind when handing over the reins to someone else.
Finally, ask yourself: am I integrating the nonprofit’s core values into the fiber of the organization, from those in leadership to volunteers? Are these values reflected in our corporate documents, from our articles of incorporation to our employee handbook? How are we preserving and passing down our institutional knowledge? These larger questions trickle down into real assessments of programs and policies.
Preventing a “mutiny” on your board, avoiding mission drift, and successfully passing the baton are all easier said than done. But we’re here to help along the way. Explore the free resources on our blog, request a consultation for your legal needs, or sign up for our newsletter for more tips to carry out your mission.