In the footer of this website, I reveal only a few details about who I am, including that I am a co-founder of a nonprofit organization that collapsed in the wake of an attempted board coup. To reveal a little more about me: I was on staff at the organization for its first five years…
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The Executive Director (or equivalent) reports and is accountable to the board of directors. If the board makes a decision to fire the ED, they have that power. If you have ever had a conversation with someone regarding your misgivings about a board firing the ED, you may have heard this line as a response.…
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In 2015, the Kentucky Law Journal published an article by Thomas Rutledge of Stoll Keenon Ogden, on the topic of derivative actions (lawsuits) in nonprofit corporations. The subtitle of this article: “Who will watch the watchers?” What a good question. What exactly is a derivative action? The derivative action is a type of lawsuit that…
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What form does a business take when it is founded? If the business is for-profit, it can take the form of an LLC, a Corporation, or it could be a sole proprietorship. That’s not to mention the many variations available of each of these forms. There could be a partnership involved, or the corporation could…
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Scenario: a former employee of a growing nonprofit organization submits a formal complaint to the board. The organization’s Executive Director (who is also the founder) is the target of the complaint. The board chair acts swiftly and decisively to remove the Executive Director’s access to their email and other systems, and otherwise prevents the Executive…
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That’s not a typo in the title. If you realize you need an attorney, I have bad news for you. You will probably need more than one attorney. Nonprofit founders (Executive Directors, if not the founder) who become the target of a coup attempt will find that they need an attorney who is well versed…
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As a new organization takes off, it usually doesn’t take long before a founder realizes the importance of carrying Directors and Officers (D&O) insurance. That’s assuming the founder didn’t know about this type of coverage before. This coverage provides some teeth behind the indemnification provision in your organization’s bylaws. Let’s break that apart for a…
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Board coup prevention is a multifaceted struggle. It is one of many issues that a founder has to consider. When a founder first establishes the organization, they have to consider whether to establish it as a membership or non-membership organization. And they have to write bylaws. Several attorneys chimed in to the discussion when asked,…
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It’s a Saturday evening and you’re at a bar. One-by-one you notice that some of your favorite fellow board members from the Acme Foundation, where you serve as the Board Secretary, walk in to the room. They notice you as well, along with one another. Just by some amazing coincidence, six of the eleven board…
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As of this writing, there are more than 300 thousand nonprofit charitable organizations in the United States operating today, with approximately 60 percent of them reporting expenses of $500,000 or less. The expenditures of that 60 percent make up less than 2 percent of expenditures for the whole sector. That’s 180 thousand small and very…
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