“How can I protect rights as owner of my nonprofit?” This is a question founders often ask when they feel that the organisation isn’t doing what they want. When the board is taking decisions they don’t agree with. So indeed, who gets to decide what a nonprofit does and doesn’t do? Who owns your nonprofit, in that sense?
The community
A nonprofit serves a community or cause. And it’s considered that these are the ultimate owners of the nonprofit.
If it’s possible for the community to manage its own organisation, this is usually a member-based organisation, an association.
Stewardship
Where the community cannot manage itself, a nonprofit needs stewardship. That’s why nonprofits have a board that’s making sure the organisation stays on course. That it focuses on working for its vision and mission and honours its values. This can be called a board of trustees or a supervisory board or council. It usually consists of appointed people who volunteer for this position, and meets at least 4 times a year. This board approves the annual work plan and budget as well as the annual report.
Day-to-day
For the day-to-day management, the board appoints a board of directors. This can also be just one executive director. The board of directors heads the team and manages the organisation. It takes all decisions, such as which funding to apply for, who to hire, what accounting system to use, etc. etc. And it is accountable for its actions (or lack thereof) towards the supervisory board.
The team
Bigger nonprofits often have a workers council that’s involved in bigger decisions, especially if they concern the future of the organisation or the employees. Even in smaller NGOs the management tends to involve the team in developing strategies and plans and deciding on directions for the future.
Where is the founder?
The founder has no special ownership of the nonprofit they created. They could become a member of the supervisory board or they may be the first executive director. In these positions they have the same rights and obligations as anyone else in these roles.
The founder of the nonprofit has one special power
The only special power the founder has is actually during the founding stage. The best protection to ensure the nonprofit stays on course is to invest in a good set up in your articles of association, constitution or statutes (whatever the term is you use). These are the foundation of the focus (vision, mission, values) and governance of your nonprofit. These form your public contract with the community or cause for your service to them. Any supervisory board and board of directors must align with what’s in these documents. Whether or not the founder is still involved doesn’t impact on that obligation.
How I can help
Grab my free resource Build a Solid Base for your nonprofit: https://www.changingtides.eu/3-steps-to-a-solid-base-for-your-nonprofit/
Want to receive my Monday Motivations & Tips? Make sure you’re subscribed to my weekly Monday Motivations and You will receive an email from me every Monday with a story or a tip about nonprofit management issues and a link to my latest blog post: https://www.changingtides.eu/newsletter-subscription/
If you are looking for a complete step by step system to set up and implement compliant and caring personnel policies and contracting for your nonprofit in line with best practices in the sector – without a law degree – join my Course Practical Labour Law & HR for nonprofits here: https://bit.ly/courseHRfornonprofits
You can also check out my YouTube channel here, and find a collection of videos on fundraising, annual reporting, donations and other nonprofit operations topics.
Want to know more and ask questions?
If you want to discuss this more – jump into my nonprofit support community and get input from a wide range of peers and from myself!
Here is how you can join my free nonprofit support community
You can join my free nonprofit support community on the Heartbeat platform here. This group is a safe space for open exchange and discussion on potentially sensitive topics like boards, nonprofit management, fundraising, etc. You can visit the community via a browser or via an app. Here is the link to download the Heartbeat chat app in the Google Play store.
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