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What should nonprofit president do when disrupter disrupts?

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What should nonprofit president do when disrupter disrupts?

Our nonprofit private foundation is in violation of our national bylaws and has not had an audit for more than 8 years. We have a disruptor (which is what she proudly calls herself) and three board members trying to stop me as State President from revising the bylaws and doing an audit. We have more than $344,000 in assets. They are making motions that are illegal and hurting our organization.  They ignore me when I quote the bylaws, articles of incorporation and private foundation rules.  What should I do?

I would start by trying to get the backing you need from the non-disrupters on the board.  But even if they agree with you and out vote the disrupters on all of your issues, I notice that you have spent zero dollars on legal fees in the last three years according to your recently filed Form 990-PF tax information returns.  You should find yourself an attorney who understands private foundation and nonprofit governance rules.

An outsider with credentials might have enough status to help get the board back on the right track.  But the attorney could also consider more fundamental questions.  I don’t understand the structure of your organization.  If it is part of an affiliated group around the country, it is very unusual for the affiliates to be private foundations.  In addition, your organization is too small to be a private foundation.  You should consider how you can be re-classified as a public charity and eliminate the private foundation restrictions and investment income excise tax.  You list “membership dues” as an “other income” item on your 990-PF.  Without changing anything you already do, you may have enough contribution income to meet the public support test.  (See Ready Reference Page: “Calculating Public Support”).  Lawyers can sometimes be very helpful.

Tuesday, September 24, 2024

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