Your Nonprofit...Or Is It?

What Nonprofit Founders Need to Know About Power & Control

Your Vision is to make a difference in the world—to serve people in need, and that Vision won’t let you rest. So you’re thinking of starting a charitable nonprofit.

Questions

There are so many questions you could ask about starting a nonprofit, but here is one question people often don’t know to ask: Who controls the nonprofit? It’s probably not the person you think it is, so let’s talk about it.

Blame the Regs

What we typically call a nonprofit is a corporation created under a state’s corporations law. These organizations must be formed for charitable, religious, and other non-commercial purposes. In other words, they exist for public benefit, not private ownership. And that is non-negotiable.

Those same state laws require that control rests with some type of governing body, not just the nonprofit’s founder. That body is usually called the board of directors.

Evolution of The Founder’s Authority

Some states allow a single individual to act as the incorporator. If your state allows that, you can make all the decisions as you establish “your” nonprofit. You can ensure your leadership role—at the start anyway—by assuming the role of corporate president and appointing yourself to the board.

Next, if you appoint board members who believe in your Vision and support you as the organization’s leader, they can elect you chair of the board. These roles—corporate president and board chair—will secure your roles as part of the leadership team.

Assigning these roles to the founder at the start of the nonprofit’s life makes sense because the founder is the nonprofit’s Visionary and the person willing to sacrifice the most to see it succeed.

Still, leadership is not control.

The uncomfortable truth is that the board could end your tenure as president, chair, or even board member.

The board holds permanent authority to elect directors, appoint officers, and remove them both. More than one founder has experienced the ice-cold reality of being ejected from the organization they started. They didn’t know it could happen, and they didn’t see it coming.

Now that you know who holds legal control, consider asking the board to craft a long-term role that allows the founder’s voice to be heard. This won’t weaken the board’s role or its ability to change yours, but (as long as the board allows) it could make you a formal member of the leadership team and position you to continue promoting the nonprofit’s original Vision.

The Take-Away

Starting and running a US nonprofit is not the same as starting and running a for-profit enterprise. It doesn’t belong to you, and you can’t control all the moving parts. You can influence others and share leadership, but you can’t call all the shots.

Let me be clear, though: Some founders with strong personalities do try to call all the shots. They recruit board members who say yes to everything they want. And they like it that way.

That might work for some organizations for a while. But in my experience, no single person has all the skills, experience, and insight needed to keep an organization strong and productive over the long term. The organization begins to falter at some point, and because the board is a group “yes men,” no one dares to point out the real problem: the founder’s insistence on total control.

So even if you can be that founder, don’t.

Are You Ready?

Given all this, do you still want to launch a nonprofit?

If you insist on keeping full control, a business model other than a charitable nonprofit might better suit you.

On the other hand, with the right nonprofit team, shared power becomes a tremendous asset—one that can help you run faster and farther than you could alone. If you want to serve more people, serve them well, and serve them for years to come, AND if you’re willing to share power, starting a nonprofit may be the best vehicle for the job.

The choice is yours, and it’s worth careful consideration.