Introduction
At some point in the life cycle of any nonprofit, the need will arise to add or remove a board member(s). There are a number of scenarios that can give rise to this need, and understanding how to do it correctly is critical.
What Do Your Bylaws Say?
Before doing anything else, take a look at your bylaws. Every set of compliant nonprofit bylaws should outline the process for adding and removing members of your board of directors. If yours has such provisions, it is absolutely critical to follow the process as prescribed. The governance and procedural requirements outlined in your bylaws are legally binding on your board. This means failure to follow your bylaws can give rise to legal challenges by those affected by board decisions.
In the unlikely event your bylaws do not contain provisions for adding and removing board members, the bylaws need to be amended to include such before any further action is taken. The same holds true if you wish to change the process. CAUTION: Your bylaws should also contain provisions for how to make such amendments, so make sure your follow that process accurately, as well.
In the following sections of this article, we’re going to take a look at specific ideas and best practices around adding and removing members. Again, these procedures are contingent upon bylaws compatibility, so address that first.
Adding Board Members
There are two primary reasons why a nonprofit may need to add members to its board of directors. Let’s examine each:
The most obvious one is a vacancy. Often, a nonprofit’s bylaws dictate term length for board service. For example, your bylaws may say board members serve 3 years. Assuming there is no limit to the number of terms, a director may be renominated by the other directors to serve an additional 3 years. This can happen over and over, if desired. But, it could be that a director is ready to move one at the end of one of his/her terms. Or, maybe the bylaws dictate that a director cannot serve more than 2 terms. It could even be that a director quits (or dies!) mid-term. When such a vacancy arises, the typical procedure is for the remaining board members to find a suitable candidate to fill that role, nominate them, and vote them onto the board in a regular or specially-called board meeting. In the case of someone filling a vacancy mid-term, the board needs to decide whether or not such replacements finish out the term of the departing director, or will serve a full term. Either way is fine, as long as the board is consistent in how it handles such situations.
Another typical scenario is the desire to expand your board. We often see this in the early years of a nonprofit, where the initial founding board is too small to adequately serve the needs of a growing charity. The process here is much like that with a vacancy. For example, the bylaws may state that the number of directors should be between 3 and 7. If the current board includes 4 members, those members may add up to 3 additional directors to join them. As long as the upper limit prescribed in the bylaws is not exceeded (assuming there is a limit stated at all), the existing board is free to nominate and approve new members.
Removing Board Members
Removing a member of your board of directors is never a pleasant task. It’s almost always an involuntary action that is fraught with tension and emotion. It can, and often does, impact relationships permanently. It isn’t a move that should be entered into lightly. The best solution is often to seek a resignation. When that can’t or won’t happen, sometimes it’s simply necessary to remove a director. It could be due to lack of participation…those are typically easier to handle. Other times, it may involve a board member who has become intolerably disruptive, abusive, negligent, or worse, criminal.
The bylaws provisions for removing a director should necessarily be stringent. It needs to be difficult to do. A typical best-practice provision requires unanimous consent of the other board members. It should be hard, so as to prevent arbitrary or selective action against members who may simply see things from a different perspective. Conflict can be healthy, as long as it’s handled professionally and maturely. But, when a situation rises to the level that action must be taken, the typical procedure to is bring up the matter as an agenda item in a regular or specially-called meeting, discuss the situation, put a motion up for vote to remove the individual, and follow through with an up or down vote.
Relationship Considerations
Don’t forget about relationships when dealing with additions and removals. By relationship, we’re primarily talking about blood, marriage, and outside business relationships between board members. This is primarily a concern for public charities, not private foundations. Adding and removing board members can upset the necessary numeric balance when related board members are involved. Public charities must have a board that has a majority of unrelated members. See the related topic for a more full understanding of board member relationships.
What is the foundation for the statement that “every set of compliant nonprofit bylaws should outline the process for adding and removing members of your board of directors”? I’ve heard this general requirement from others who deal with non-profits, but I don’t see anything explicit in the IRS regs or forms. What am I missing?
Most of the rules that cover governance and procedure won’t be found at the IRS. The IRS is concerned that you have an independent board, but they rarely concern themselves with the mechanics of governing. Those expectations are usually found at the state level in your state’s nonprofit corporation law, which all states have. Each state is different somewhat, but you will also find more similarities than differences across the states. Some states have term limit requirements, for example, while others don’t. What you will rarely find is chapter-and-verse that would spell out my quoted sentence above. However, the AG’s office that regulates nonprofit corporate operations has expectations for orderly governance, including those things. Without explicit internal controls, it is difficult to govern effectively.
I know of someone who was appointed secretary to a non-profit, without his knowledge, and listed in the filing. How was this possible? Doesn’t this require a signature of consent somewhere? As being an officer to a corporation does have legal ramifications, doesn’t it? Thank you.
No one can be drafted into serving as an officer or board member of any organization. It doesn’t necessarily require a signature of consent, but it certainly requires consent. If this person did not agree to serve, putting their name on a corporate document as an officer was done so fraudulently, and in no way whatsoever subjects this person to legal liability. I recommend they send a certified letter to the organization’s official address, stating that they did not agree to serve and requiring the organization to remove their name from any documentation and to file any necessary amending documents to correct the mistake.
Hello, do you recommend setting term limits for board members, including officers? We are a small nonprofit with a few board members that just started this year. I am concerned about not being able to replace multiple directors at once. If I stagger the terms, how do we decide how long each director should serve?
There is a lot of debate about term limits. Some think they’re essential for good governance. One particular nonprofit expert we like around here has a quote, “Terms limits are for cowards!” His point is that just when someone is becoming valuable to the organization, they term out of service. Term limits can be healthy, in that they force new energy and ideas into an organization. Sometimes, however, knowledgeable continuity makes the most sense. There isn’t a one-size-fits-all here. Should you choose to impose term limits (and this should be stated in your bylaws), make sure your terms are long enough for someone to truly contribute their talent. A board I recently served on allowed for two consecutive terms of 3 years each (a total of 6 consecutive years). After sitting out one term, that person could be nominated and elected again. You have to find what works best for your particular setup.
As for staggering, it’s good to have either 2 or 3 classes, or groups, of board members. Only one class can be open per year. Ongoing, this structure works well. Initially, it requires some of your members to volunteer for a shorter initial term to create the staggers.
We are a small startup, with only 3 board members. We are incorporated in the state of Arizona We just filed our annual report with the state (a few days ago). We have not yet submitted our 1023 application for status as exemption as a 501c3, but plan to do so within a few months. One of our board members has decided to resign, which leaves us with only 2 board members, rather than the required 3 board members for IRS 501c3. So there will be a gap with only 2 board members until we fill the vacancy. Will having had a gap where we only have 2 board members be a problem when we file for exemption? Or will be okay, as long as we have 3 members at the time of application? .
THANK YOU!!!
The gap shouldn’t cause you any issues. Good luck!
I am about to incorporate not for profit in Texas. The SOS (secretary of state) website mentions that I need to have three directors, one president and one secretary. However, right now there are only four of us who I know will be interested in the overall work that I am looking to do. Can I list myself as a director and President or would these have to be two different people? Similarly with secretary, can that post also be one of the directors or not? Please advise.
I think you are confusing two different roles: a director and an officer. Any member of the board of directors is considered a “director”. Typically, nonprofits will appoint or elect certain members of the board (directors) to fulfill the additional officer duties of President, Secretary, and Treasurer. Most states prohibit any person from the dual role of President and Secretary, but most other combinations are OK, such as Secretary/Treasurer.
I have a board member in our nonprofit organization that will be replaced with another.
What forms or letters I need to fill out from the IRS to change out board members?
Thank You
Nothing now. When you file your next IRS Form 990, the new board member should listed and the prior one not anymore. You’ll update the state when you file your corporate annual report.
Hi i am a president of a NON profit 501c3 in Massachusetts and want to resign, what do i have to do ?
Usually, it’s no more complicated than submitting a letter of resignation to the board of directors. As President, you may have some cleanup you need to do. If you are a signatory on or otherwise have access to the organization’s bank account, you need to be removed from that. In addition, you will want to make sure the nonprofit removes your name from its website, or any other publicly available data source. Turn in any equipment or other property owned by the nonprofit. And finally, when the next Form 990 is filed with the IRS, your name should obviously not be on the current list of directors. Same thing for the next corporate annual report in Massachusetts.
Ok, let’s say the owner of the organization passed away with out leaving someone in charge and it’s been years now the organization is just sitting. The owner’s grandchildren decide they want to pick up where it left off how would they go about it?
For starters, nonprofits don’t have owners, only board members who govern. I presume that’s what you mean, else the “owner” you speak of owned a commercial business, not a nonprofit. If it is truly a nonprofit that has gone dormant, most likely its 501c3 status has been revoked, and the state may have dissolved the corporation for failure to file an annual corporate report. Probably best to let it lie, and start a new organization in proper compliance to pick up the activities and carry on. You don’t want to inherit whatever lack of compliance is likely involved in the old org.
If a nonprofit board president choses his son to be a board treasurer, is that illegal?
Not unless the it creates a situation where a majority of the board is related.
I am a home owner in a HOA in Florida. Our president is a federal felon that has all of his right restored with the exception of the right to own a firearm. Is this legal? The law reads that all right must be restored for at least 5 before being able to be a board member. This same board member has been removed by a law suit filed by another homeowner several years ago. Once a board member has been removed in this fashion are they eligible to sever on the same board again in the future? We are having problems with this board member unilaterally running our HOA. He has made decisions without board approval and not following city law, only to bring up at the next board meeting and passing it. This is to include improvements he has made on his own unit. We have tried to recall this board member and he has used our HOA lawyer against us. This seem unethical since the lawyer is retained to represent the community not individual board member. What can we do??
There’s simply not enough info for me to give a fair and accurate answer. Your HOA’s attorney should be the first line of defense in helping make sure the organization is operating legally. If it is true that the attorney is acting as a personal attorney for the individual who you speak of, instead of the HOA, then he is violating every principle of legal representation. Remind the attorney who his client is. Or fire the attorney and hire one that will play fair. Good luck with it.
Hi, thank you for what you do.
I started a non-profit and made it a three-way partnership. Both partners turned out to be the wrong people for several reasons. One is a sibling, the other is a friend. Neither of them invest any time or effort into the organization and I worry about their ethical behavior that can potentially damage my organization’s reputation by proxy. I have high standards for anyone who is employed or involved with the organization both at work and in their private lives.
What’s the best way to have them removed from my Board? Thank you again
The best way would be to encourage their resignations. Short of that, you need to follow the procedures that should be outlined in your bylaws. Most compliant bylaws would require a majority, super-majority, our unanimous vote from the other directors to accomplish that. In your case, you cannot unilaterally do that. If they won’t resign, you may be stuck. You could always expand the board and water down the impact of the other two. You may even eventually have a sufficient number to vote them out.
Our HOA board has added 4 non-voting “Ad Hoc Board Members” to our 7 member BOD. Their explanation is that “ADHOC members who have no voting rights but they are there to offer support to the board members, to assist with committees when needed and volunteer their time and service to community.” We have community volunteers and committees. I’ve never heard of “Ad Hoc” board members. Ad Hoc literally means “for this specific purpose” – but why elevate them to board “members” not for a specific purpose in addition to the 7 director positions our bylaws states? The mission creep factor on this feels high. The Bylaws allow the President to add officers as needed, but this isn’t that. Ever heard of this?
I’ve seen it, and it’s really a matter of language. What he’s really put together is an ad-hoc advisory committee…a much better (and less confusing) turn-of-phrase. Ideally, the board should be “the board”. Bringing in others without voting rights is best relegated to being called a committee.
Hi -we have a board that is unilaterally run by two of the 5 members, but mostly one. The other three of us members have recently become much more engaged as we have discovered (unbeknownst to us) that they have been making unilateral decisions on behalf of the board including issuing notice on letterhead (eviction). We are fearful of potential lawsuits especially since there is no D&O liability insurance. This person has appointment themselves to be on all committees and operates as sole member. How serious should we be taking this situation? We are thinking of full removal but don’t want to upset our neighbors as they have been on board for over a decade.
Tough situation, but you have a responsibility as a board member to deal with this directly, as well as a personal interest. I really can’t say how serious the danger is, as I am not privy to the specifics of your situation. But, it sounds pretty bad, and decisions made by one or more members “unilaterally” can become the liability of all. Your entire board needs to get a handle on what’s happening and reign in the rogue elements.
Our nonprofit was created by and individual that now needs to be removed from the board. How will that affect the organizations since this individual is the one that started it?
It should affect it at all, really. The founder doesn’t have any ownership, since it’s a nonprofit.
Our founder died about 3 years. His name is on our original chapter. The family of our founder wants his name and any affiliation removed from any original paperwork. Is this possible?
No, original “paperwork” is just that…original. It’s a historical fact that he was involved, and that cannot be changed. However, your annual corporate report and IRS Form 990 should indicate current directors and officers, and his name shouldn’t be on there seeing as he has passed. Even if you amend the charter, it doesn’t eliminate the old charter, it just updates it to include additional information. The old filing doesn’t get replaced.
Do bylaws require us to list the names of our current board members? (Our bylaws list the current board members by name but we are about to add and remove a couple of them – which means revising the bylaws each time we change members.)
In most situations, your bylaws shouldn’t be so specific that they name individual board members. Bylaws usually spell out how board members are added, removed, etc., but in a general sense. Given that bylaws amendments should be rare and require a minimum of a super-majority vote, having to update your bylaws every time a board member changes is a royal pain. Your board members should be named on your corporate annual report, plus your IRS Form 990 each year. But your bylaws? Not so much.
We have a non profit that has been inactive since Dec 2016 Can we transfer directorship to another ministry to take over the non profit and would we then be completely relieved of all responsibilities towards and connections with the 501c3. If we can do, do you have advice what is required to do this?
Maybe, but you may not want to do that. If the other ministry is simply taking over the activities, it’s probably best to just gift the assets to that organization. They could assume any debts, as well, so long as the debtors allowed that. Once that has happened, your nonprofit could be legally dissolved. If it is important to maintain separate organizations, then yes, your board could elect new members from their board, and then submit resignations once the new members are installed. They would then become responsible for your nonprofit going forward. It does not necessarily relieve your existing board of all liabilities, however, for anything sideways that may have happened during your board’s tenure, including personal guarantees for debts or the like. Mergers, acquisitions, and takeovers are typically more messy than you would think as you discuss the possibilities. I would suggest hiring legal counsel to guide you through this if dissolving your nonprofit is not in the plans.
Recently our food pantry board had it’s quarterly meeting. There are four sites run under one nonprofit, each of which have up to 4 board members and each site having multiple volunteers. (all board members are not paid, including site managers) 6 months ago, we elected a new president and vice president and all of a sudden we have had a lot of complaints from clients for one of the sites. We found out that one of the volunteers had been allowed access to accounts for orders and doing client paperwork, which should be done by the site manager. She has also been turning clients away, which is against policy. The president stepped in and removed the woman from her position. At our last meeting, a few days ago… The site manager threatened to resign if this woman was not allowed to return to her position. That either she is reinstated or I resign. Our president and other board members held up the decision that the president made. My question is whether or not his verbal threat is legally a resignation since his threats were not met.
Legally, I don’t think such a threat qualifies as a resignation. Usually, a board member would submit a resignation in writing. In the case of someone who does verbally quit and never return, the board should formally vote (per the bylaws) to remove the individual from the board officially and follow up in writing.
Thank you for this article. For a small nonprofit where three of the Board Members are also the President, Vice President and Secretary: When we vote every 2 years at our annual meeting to renew board membership does this automatically mean the officerships are automatically renewed as well? Or is that a separate renewal process? We do have other Board of Directors members who are not officers. Thank you.
It really should be a separate resolution that is discussed and voted on, apart from board membership renewal. These are two different roles, and should be handled separately.
How can I add a sole memeber clause into my ministry non-profit by laws? I am the founder/president/Pastor
You could add it to your bylaws, but keep in mind you have to follow your current bylaws’ methodology for making amendments. Failure to do that invalidates the change. Also, you will probably have to amend your Articles of Incorporation to change your status as a member organization.
Thank you for your post which I found useful.
What happens where a trustee wants to leave the non profit due to challenges of time and commitment just after the non profit is registered.
The quickest and easiest thing would be for that person to submit a resignation letter to the other board members. There’s no requirement that a board member/trustee serve out their term if they simply cannot do it.
Does a resignation letter need to be notarized? Or can it just simply state their resignation.
Marcus
I don’t know of any laws requiring notarization. Gives additional gravity, but that’s probably about it.
The founder and President of a 501 c 3 public charity have recently passed. I am new to the world of Secretary. The directors have moved or passed away. there are a treasurer and secretary (myself) the bank said I need to have a minute meeting removing the past C.E.O. Then write a letter to him removing him. Bring it to the bank with the new treasurer for the signature card. can I get volunteers for directors ? or what should I do?
You didn’t provide a lot of detail, but it sounds like you need to conduct a board meeting between yourself and the Treasurer (if indeed you are the only two remaining board members). Propose a motion that the past CEO is to be removed from their post and vote to approve that motion. Record the proceedings of the meeting in writing and provide to your banker. And yes, you can get volunteers to become new board members. Your bylaws probably describe how to add members. Usually, it’s a matter of the current board nominating new people to fill vacancies, then voting to approve their candidacy.
The CEO has passed and need templet to conduct the meeting minutes of new board of directors
Does the president of the corporation have to be a citizen?
That varies by state. Most of time, however, the answer is “no”.
Hello, I am a volunteer with a Cultural Center that is being Reorganized. Currently a Not for Profit, the President has abandoned his post and told the VP to just handle it. Most of the paperwork is no longer available and I am doing my best to get them back to functioning correctly. The VP has been running things as she is the only one available. As far as I can tell, more than half of the BOD has abandoned as well. The only copy of Bylaws I can find is old and does not mention removal of BOD members but I would assume any changes required a 2/3 vote. Would you have a suggestion on how we go about getting the next Official President in place? Thank you in advance
Stepping into a chaotic situation is always hard. Take a look at the bylaws that you have, and see what is required to bring on new board members. Once they’re in place, you can then elect officers. The bylaws may have stipulations at to how officer election happens, but maybe not. Usually, it’s going to be majority vote of existing board members. As for those who have abandoned, that probably amounts to a resignation. Just be aware that I’ve seen situations where board members who supposedly walked out, but never submitted an official resignation later came back and alleged that they still were in their term. Good luck!
I am currently on a board seeking to renew my term. Can I vote for myself when the vote is called. Our bylaws do not state either way. However in the past it has always been allowed. I’m asking ethically and technically. Thanks for any info.
If your bylaws are silent on the issue, and the board has a history of allowing this, it should be fine.
Hi, I am a new non profit forming my bylaws and I am considering adding board members because there are only 3 of us. Is there a way to do it? Should I amend the formation papers I already have?
If you are creating bylaws to cover such issues as adding and removing board members, you need a good template to start from. My first advice is to hire us to help you get started the right way. We know what you don’t know. We provide the knowledge and core documents you need to succeed. If you decide to proceed on your own, you will need to find a pre-existing bylaws template to emulate. BoardSource.org may be a place to look.
A 501c3 was started in 2011. It is a parrot sanctuary run by one man. He has 2 volunteers as officers (myself and another). There are never meetings, I don’t think bylaws either as he keeps zero paperwork on the birds received or anything else. He takes no opinions/directions from us and is quite frankly more a dictator. If we comment or try to change what we feel is neglect etc he yells at us and many are let go. Well, over the last few years he’s got himself into quite a financial hole, mostly due to his prolonged legal battles with the person who owns his easement to the sanctuary, another sanctuary he used to be part of etc. He has let the sanctuary go, it’s filthy, not feeding correctly and half portions, no enrichment for these intelligent birds, only vet care is if birds Are in dangerous condition and even then weeks to month this after event/sickness. Sometimes he’ll leave bird at vet and never pick up. Neighbors saying birds are being let go and in their trees which they will probably die. He lost is easement battle and can not get into/out of the sanctuary. He is soliciting donations for the birds care, but it is going to his legal fees. All the volunteers have been let go. We are trying to get the birds out of a horrible situation and it’s been awful. My question is, can myself and the other officer somehow get him out so we can find the birds homes? We have heard there is pending Court date for EPA charges.
Wow, this is horrible situation. Assuming the nonprofit even still legally exists (check with your state), you would have to follow the bylaws in order to remove him. If the organization has 501(c)(3) status, there should be bylaws. If not, it will be difficult. Also, keep in mind that if you remove him, you assume responsibility for all the mess he’s leaving behind. Sounds like you need to bring in animal services and care for the birds that way. I doubt you really want to be on the front line of legal battles you didn’t start.
Hi Greg,
I became a board member of a non-profit a friend started. Initally she had a lot of enthusiasm for it but now we are no longer close and she isn’t doing much with the non-profit. And is doing some questionable things with the non-profit. I’ve asked to be removed from the board and she said she would do it. But it’s been 7 months and I am still listed as a board member. Is there another way I can be taken off the board?
The only other board member is in another state and I doubt my friend has kept in touch with her. We haven’t had a board meeting ever, there are no by-laws and the status of the non-profit is FTB Forfeited.
Since she started the non-profit my friend has done some shady things. She continues to fundraise but I’m unsure how the money is used and her lack of communication is troubling. Clearly she is not handling things properly and I do not want to be libel for any messiness on her part.
What can I legally do to get out of this since she is ignoring my request to be removed from the board?
I really regret getting invovled but she seemed to be on top of things when she came to me with this and said it would be temporary until she got more board members. I feel foolish and would like to get out of this situation asap.
Thank you
If you have resigned, you’re out, no matter whether she has you “listed” or not. Make sure you retain a copy of your resignation letter or email along with the date you resigned. Also, it sounds like the corporation has been administratively dissolved, so legally it doesn’t even exist anymore.
Just a question regarding family charitable foundations. I am a member of the Board of Directors, sister is president. We have had 2 deaths in the past few years with one being very recent. Sister’s daughter was appointed to the board after the 1st death without any notice to the board. She just showed up and started taking minutes. After the most recent death, sister (nominated) her son to fill the vacancy. So now the balance of the vote is 3 to 1. I did request that my son be appointed to the board of directors to give some balance, but I think you can see where this ended up. What can be done at this point? This sister is very vindictive and I see her trying to force me out. I attend every meeting but have to beg the secretary (her daughter) to tell me when they are and they change the times on a whim making it very hard to get there, but I do.
Family drama is tough anytime, especially so when you are serving on a board together. I think you really need to look at your bylaws. Most of the time, one board member doesn’t have the ability to unilaterally choose new board members without consent of the other members. Yours may be different, but the process should still be clearly outlined. Either the bylaws are being followed, or they aren’t. If they aren’t, that is a legal matter. Either “sister” relents, or you may have to take legal action to protect your rights on the board.
I am looking for language to add to our Bylaws related to adding and removing members from or to the board of directors. We had an issue where a member (previous president of the org) resigned due to issues with the newly elected president (who ended up being terminated after 6 months). Once the newly elected president was terminated, the previous president was ask to rejoin the board. Some members objected to this action even though the vote ended up having a majority add the member back to the board. At this time we realized wee had no language in our bylaws to address this.
Here are sample paragraphs that are contained in templates we use. The idea is to keep it simple. The first paragraph simply allows for new directors to be added by election. The second addresses necessary removals.
Number, Election, and Terms of Directors. The Board of Directors shall consist of not fewer than X nor more than Y persons as determined by the Directors. The Initial Directors shall be selected by the Initial Incorporator. Directors shall serve for terms of three years and until their successors are elected and qualified. As nearly as possible, an equal number of terms shall expire each year.
Removal. Any Director may be removed from office, with or without the assignment of any cause, by a vote of a majority of the other Directors at a duly convened meeting of the Board, provided that written notice of the intention to consider removal of such Director has been included in the notice of the meeting. No Director shall be removed without having the opportunity to be heard at such meeting, but no formal hearing procedure need be followed.
DISCLAIMER: This is for informational purposes only, and does not constitute legal advice. Consult an attorney for situations requiring legal opinion.
How may I put in my trust that I leave my 501-c3 to another person? Please
You can’t. It’s not legally yours to bequeath. Read this: https://www.501c3.org/who-really-owns-a-nonprofit/ .
I’m drafting language for removing an officer or member of our general body. I could benefit from a template guide. Thank you.
Kimberly
Revision to my original question. I found verbiage in our by laws about removing a member but it’s under a section that refers to attendance at meetings. Even though it’s under attendance it specifically states that a member can be removed by a majority vote. Would that hold up as a way to remove a member for any violation? See below, this is the verbiage.
NON-COMPLIANCE- Members of the Board are required to attend a minimum of 75% of the regularly scheduled Board meetings, and shall not miss two consecutive meetings unless excused by the President. Non-compliance with this provision can result in the matter being reviewed by the Board. In such cases the affected member may be removed and/or replaced by majority vote of the Board. Any absence must be communicated to the league president prior to said meeting.
I’m not a lawyer, but I’ve looked at thousands of bylaws over the years. I would interpret this to be exclusively related to meeting attendance. You can always have an attorney review it for a true legal opinion, but I expect they would agree with me on this.
If a board member resigns with an effective date, which is one of four, can they hold an election to replace just that member with another and make it effective immediately?
Usually, yes. Your bylaws should spell out the procedure for replacing someone who leaves their post, whether by term limit or resignation/removal.
Thank you for being so generous with your advice. I have a very serious problem. Our board only has 3 directors right now. I am one of them. The other two are brother and sister. I have asked both to resign as this is a major conflict of interest and has created bad tension. So much so that they actually called a special meeting with 2 hours notice the other night and voted me off as a signor on the bank account and changed the bylaws that previously allowed one director to open an account and prohibited me from opening any account in the organization’s name..They both declined to resign and don’t find this arrangement to be illegal or unethical despite the fact that they actually live together. We are in the state of HI. Can I call a meeting and force a recusal of a motion to disallow related board members on the board and related board members from having the majority vote? What if they fail to acknowledge they should recuse themselves from the vote? What happens with the quorum? Can I be the majority vote at that point and remove them from the board? Please help me. I am desperate to save the nonprofit from this nepotism so a fair vote can be had and I’m not constantly threatened with them voting me off or teaming up.
This sounds like a very difficult arrangement. If your organization is a 501c3 public charity, the current board structure isn’t compliant anyway. You must conduct governance with a majority independent board. That’s the most important fix that needs to happen. Also, the 2 hour meeting notice is most likely contrary to your bylaws requirements, making any decision made in that meeting legally void. Even if it was OK, two related board members cannot form a quorum for business in a public charity. You may need to get an attorney involved in this situation, or just step away. In my experience, people in the situation you find yourself rarely prevail, unfortunately. They usually grind against the situation until they simply tire of it all. Hopefully, things will turn out different for you. Best of luck!
what if you don’t have a clause to remove a board member in your bylaws and you need to remove one? Basically based on behavior.
Thank you.
Rebecca Mohat
I’d say that’s a problem. You may have to wait out their term limit. Bylaws without a removal procedure clause should never be adopted, but obviously that’s too late for your group. Maybe if they’re uncomfortable enough, they can be persuaded to resign. Good luck!
thank you for your response. We have amended our bylaws to include removal of a board member and we are removing this board member.
Appreciate your assistance.
Rebecca Mohat
We lead a 501c3 religious/charitable organization incorporated in Texas (2010), that’s now registered/operating in MS. My husband is an ordained minister and we have not received a salary, nor a housing allowance since inception. Our board consists of six people (3 married couples). My husband and I are aware that we need to recuse ourselves from the salary/housing allowance vote, but are we okay to have the remaining four board members vote given their relations? Or would we need to add at least one independent board member to legally conduct the vote?
Thanks!
Because the remainder of the board is made up of two married couples, you really only have 2 independent votes if you are recusing yourself. That doesn’t necessarily make it illegal to conduct business, as long as the married couples themselves do not have a conflict in the vote. It’s really up to you.
We currently have an appointed Board. Do we need to hold an election each year, or can the current board members remain if now one contests?
The most important thing is that you are legally required to follow the procedures outlined in your bylaws. They should spell out both board term length in years, as well as the process for electing new board members. Some nonprofits have stipulations in the bylaws limiting how many consecutive terms a board member may serve. For example, an organization may have bylaws that define a term of service as 2 years, and a limit on 2 consecutive terms…for a total of 4 years. If there are no limits on number of terms, then a sitting board member coming up on the end of a term of service can be reelected for another term. This process can repeat itself for as long as the board member wishes to serve. That is exactly how I ended up serving on an HOA board for ten years 🙂 . 2 year terms, and no limit on number of terms. Just me continuing to agree to serve. I hope that helps.
I am a board member of a non-profit that has filed for articles of incorporation with the secretary of state. I want to resign from the position. Is it as simple as writing a resignation letter or do I have to send information to the secretary of state as well?
You shouldn’t need to notify anybody other than the board of the organization you are resigning from. I would suggest keeping a copy of the letter for yourself, also.
When removing a board member, should the meeting minutes state why the member is being removfed?
Yes, you should always fully document both the why and the how. In the unlikely event something like that ended up in litigation, you want a record of events that doesn’t rely on faulty and possibly contradictory memories. I’ve seen that played out and it isn’t pretty.
When removing a board member, how do you make it official? Do we need to write new bylaws without the impeached board member’s signature? Just signed meeting minutes? Nothing to file?
Do not create new bylaws. The signature of the removed person has no bearing on their validity. Just document the removal in meeting minutes.
I am writing on behalf of my daughter. Her former boss knew of her interest in starting a non-profit to minister to hospitalized children, most terminally, by using “dance therapy”. She is young, 26, and trusted him to handle the details. He owned a dance studio where she was employed, but shortly after they got the paperwork done to form the 501(c)3, he ended up not paying employees for several weeks, then ghosted everyone. He ended up leaving and the studio was locked up and has since been re-opened by one of the mother’s who children attended the studio. During the time when he went “ghost”, he did respond to my daughter when she asked him for the paperwork regarding the non-profit, as that had been her dream and goal, not his. He did give her the Secretary of State “Certificate of Filing” paperwork which had been filed for their Certificate of Formation Nonprofit Corporation. Her boss, his wife and my daughter are listed as the 3 directors. He told her to remove him and his wife, which we intend on doing, but that paperwork and the IRS EIN number are the only paperwork that she has. We don’t have the By-laws and want to remove him and his wife and add another person and myself as directors. What do we need to do about not having the current By-Laws? He was a pretty shady guy at the end, so is there a way we can see if he has done anything “unethical” with this non-profit? We don’t want something to affect her negatively down the road. The cost has already been incurred and paid for so if she doesn’t have to pay anything further we would like to move along and start applying for grants, etc. I am also the Executive Director of another brand new non-profit, who is anxiously awaiting to be approved for the 501(c)3 status. I am trying to assist my daughter, but I have bot actually done the process for this. Please advise. Thank you, in advance, for any assistance.
This sounds like a tough situation. If he’s unwilling to fully hand everything over and resign, then I would not attempt to take over this organization. You don’t want to be liable for any funny business he may have done, including using nonprofit funds for himself or his business. You’d be better off starting over with a brand new entity.
I am a board member of an organization that is a 504 in PA. Our treasurer has not paying bills, depositing funds or responding to our emails for several months.The president, who has worked closely with her and has access to the quickbooks account, is also not addressing these issues. Their term ends in 3 months but I would like to remove them. The bylaws allow for it with a majority vote. Another board member is concern we could get sued, as a club or professionally. Without insurance , is this possible?
If you have the votes on the board, you probably should get them off. At a minimum, the board should vote to remove the treasurer’s account access. The entire board has a fiduciary responsibility, so there is an obligation to act. I’m not sure what concern is about getting sued. If you properly follow the bylaws, there shouldn’t be standing for a suit. Good luck with it.
Can the founder of a non profit also own a business that the non profit pays? For example youth non profit Does several things for at risk youth however the founder also own a gym for kids. At risk youth want to join can the non profit pay their membership to the gym? The issue we are running into is with letting so many just come for free it makes it very hard to survive as classes are full of non paying kids , want to keep helping more kids but need to keep the lights on.
Not really…you have a definite conflict of interest. Even if it is a great things for the kids, using nonprofit funds to subsidize kids attending your commercial gym would give rise to prohibited private benefit. We highly recommend staying away from such.
If a person starts a non-profit, and put in place a board of directors, does that mean they can be removed from the very thing they started if the board have different opinions than than the founder on how to run things? That would seem odd, as it would be the founder’s blood sweat and tears bringing everything to life. This would be especially painful if the founder invested a lot of themself into this and things took off, and only then at that point they had differing ideas and the board removed the founder. This concept is making me quite anxious, as it makes the founder very vulnerable, and particularly about choosing people to be on the board. Please help me understand how to look at this situation / understand it correctly. Thank you!
You raise a great question, Bobby. It doesn’t happen often, but it can happen in a public charity, given the requirement for an independent board of directors. One way this can be addressed is by using what’s referred to as a sole member organization. If legal in your state, it is possible to have a public charity where the founder is the sole member, responsible for appointing the board. Board independence is still required, and the board must be allowed to truly govern the nonprofit. But in essence, the board serves at the pleasure of the founder, thus reducing risk to founders. It is not a recommended structure for most organizations, but can provide a measure of safety to founders with disproportionate risk exposure.
Does California State Law allow a non resident to start a non profit religious foundation and become the chairman of the board?
Thank you for taking my question.
You should be allowed by law to do that. There’s no prohibition at the state or federal level that bars a non-California resident from being a board member on a California charity.
I created this 501c.3 to run a charity event once a year. My board of directors is basically worthless. They rarely acknowledge approval requests for donations and are no-shows at meetings. One of them requests financials every once in awhile but basically I am the board of directors. Is it possible to run a 501c.3 without a board? I am trying to stay in compliance with the IRS rules but having a board just creates more work for me.
Your situation is all too common, unfortunately. That doesn’t relieve you of the necessity to have a board, however. As a public charity, you must have at least 3 board, the majority of whom are unrelated and not compensated. Surely you can find 2 others who share your vision and can be trusted to help you lead your effort. It’s hard, but success by yourself will prove elusive.
How can new board members be appointed if there are no existing board members?
Are there really none? We occasionally run into situations where the board resigns en-masse. When this happens, it can require volunteers stepping up and becoming the new board. The problem with that is it can be contestable by members or other stakeholders, since there us rarely provisions in the bylaws to cover such a situation. More often than not, however, if there’s no board, there’s probably no one to complain if a few people take it upon themselves to step into the gap. Just make sure the new board proceeds with governing according to the existing bylaws. Good luck with it!
I want to start a non profit within my community, however, im struggling with selecting a board of responsible candidates.
I’ve been networking with many people to secretly see who shares my passion because I dont trust family members to bring on.
My question is, can I bring in temporary initial members to fill in so that I can incorporate it and then replace them when i find the right candidates?
Or what happens if I do the opposite and find members before the business is incorporated and one of the members steal my business plan without me.
Should I draft my idea in writing to protect myself and the business plan from being stolen first before the members sign the articles of incorporation?
If this is a nonprofit startup that puts you at entrepreneurial risk, you may want to consider a sole-member 501c3 structure. This is something we can help you with. It cannot provide you with total control, but it goes a long way toward providing the level of protection you’re hinting at. These are tricky to set up and definitely require someone who knows what they’re doing. I recommend you reach out to our Sales Team and speak with one of our professionals.
My partners and I founded a nonprofit organization to help our community with the homeless population who suffer from alcohol/substance use disorder and mental illness. We are professionals treating this population in our city. And we thought this was a good idea to form this corporation to provide treatment to this population through the health insurance companies in a safe environment to foster recovery; however, all of us composed the board of directors of the corporation. Are we in violation of the 501(c)(3) regulations? Can board members of a corporation receive payments for their professional services? Please, I need some guidance.
Thank you!
If your 501c3 is a public charity, and not a private foundation, then at least some of the board members can simultaneously be paid employees. But, a majority of your voting board must be independent, meaning they are not related by blood, marriage, or outside business co-ownership, nor compensated as employees. Also, employed board members have an inherent conflict of interest, and must recuse themselves from decisions regarding their own compensation, or that of other employed board members.
Our executive have staggered 2 year terms. The president term is up this year and the VP would like to fill the position, however this would be halfway through his 2 year term. Presuming he’s the only one who runs for president, how does his remaining 1 year as VP get filled? During the elections at the AGM, presuming he gets the president role, would we then need to announce that the VP position is now vacant and open the floor to nominations? Most of the time we have just enough people interested to fill all positions on our board. Thanks
The procedure you are proposing makes sense. It is perfectly OK to fill a vacancy if it comes up mid-term.
We have a Board of nine Directors, positions for which are outlined in the By-law. Two of these positions are Members-at-Large. We currently have one vacancy and two people interested in joining – one as VP and the other as a third Member-at-Large. We can really use the extra person for the amount of work we anticipate in the foreseeable future. Can the Board unilaterally present a slate of 10 to the Association, when the By-law indicates nine positions? Is there any process we need to follow or can we simply ask the Association for their support for 10? I’m a member on this Board. AGM is this Sept 1st.
This answer is late, but maybe it still helps. If you bylaws limit maximum board seats to 9, the limit is 9. The only way around that is for the board to amend that particular article in your bylaws. Just make sure to follow your amendment procedure, which should also be outlined in the bylaws.
I am the president and founder of a nonprofit 501c3 dog and cat rescue. I need to take someone off the board of directors. After our meeting where do we go to officially remove them?
If they resigned, follow up with a letter confirming the board’s understanding that they indeed quit. If this person was involuntarily removed, make sure you followed the procedures in your bylaws for removing board members. Once done, there’s probably nothing that needs to be filed anywhere. You can update the IRS when you file your next Form 990 and the state when you file your next corporate annual report.
I was added to the board as treasurer of a non profit without my knowledge. I have continually asked to be removed and after 5 months, it has not happened. What are my options?
Nonprofit boards cannot draft unwilling members. If you didn’t agree to be an officer or director, you’re not one, no matter what they have listed. I would submit a signed letter to the board of the nonprofit stating that you have not accepted a role as an officer and director and require them to remove your name. Keep a copy for yourself. If something ever comes up, you can easily demonstrate that you are not part of the nonprofit’s governing team.
This just happened to me. I currently work for a nonprofit 501c 3 that is trying to start another nonprofit. In the application, my boss put me as the treasurer without my permission. I came in to work this morning (Monday) and he wanted to know if I wanted to hear the good news. He told me that I was now the treasurer for this new nonprofit. I asked him if I could say no to the position and he told me “no” that he had already submitted the paperwork. I did not agree to this. I’m scared, confused, and feel like my trust has been betrayed.
Sorry for the delayed response. You cannot be drafted…period. Your boss does not have the ability to dictate your participation in the governance of another organization. What he did is fraudulent. If necessary, take it up with your state’s AG’s office if he won’t voluntarily remove you and document (in writing) your refusal.
Thanks for sharing all this information.
What happens if a non-profit has too few volunteers to fill the Board numbers stated in its by-laws? Is there a legal repercussion when taxes and corporations division reports are filed and there are too few Board members?
Thanks.
There could be, but I’ve never seen a state or the feds compare your bylaws with your current board structure outside of a litigation situation. Sometimes you’re just short. My best advice is to diligently seek to bring your board up to the specified minimum. Once you do, the board could amend the bylaws to reduce the minimum, if that helps for the future.
I have a newly formed nonprofit that has an initial board of three. Early on, it was necessary to remove the Vice President, leaving two members. I am President and the other is Secretary. After numerous altercations, and events connected to her not performing her job correctly, with I asked her to resign after she sent a text message concerning an issue that I had to make arrangements for because she wasn’t responsible anymore. Our bylaws state that a vote needs to be taken to remove a board member, with or without cause. Can I remove her with only one vote as she is not able to vote in this matter?
Probably not, because you cannot be a quorum of one. A quorum is the minimum number of board members present to legally conduct a board meeting. That’s often just a simple majority. But, with only 2 members, a quorum cannot be satisfied without both of you present. If you remove her unilaterally, she likely has the right to pursue legal remedy. This is a difficult situation that you may wish to seek an attorney’s help with.
Hello Greg,
I am the founder and President of a 501 c 3 wildlife group. We have one paid employee, our field director. Since our inception over 2 years ago, all our fundraising efforts have gone to salary and insurance and nothing towards our mission. Our Board seems uninterested in righting the ship, can I remove the majority of our Board and turn our organization over to entirely volunteer?
Thank You
That depends on what your bylaws say with regard to board member removal. If the bylaws give the President that power, then you likely can do that. Most bylaws for nonprofits, however, require approval by at least a majority of sitting board members to remove another member. Whatever you do, make sure you are compliant with the organization’s bylaws, as they carry the force of law.
A position that became vacant in 2018 due to the resignation of a board member was never filled, even though our by-laws allow our President of the Board to appoint someone from the membership at large to that open position. Our Nominating Committee has vetted and proposed individuals who will be voted on at our upcoming annual meeting. As a result of these elections, we will be left with an even number of directors on the Board. Our Board President believes that she can still use her executive privilege to appoint an individual to the seat vacated but not filled in 2018, which would then bring the number of directors on our Board to 13, allowing for a “tie-breaker.” What do you think of this scenario? Is it ethical for her to use her executive privilege to fill a vacancy from 2018? Our by-laws allow for up to 15 directors. Thank you.
Obviously I haven’t seen your bylaws, but it sounds like your President may be a bit generous with the interpretation of her executive authority, but maybe not. Usually, if your bylaws gives authority to a board chair to fill a vacancy, it’s for the remainder of the term that someone vacated. So…stay with me here…I’m going to suggest a couple of scenarios. It’s all about when the vacated term would have ended.
If that vacated term would have expired by the time of your new board members coming on after your next annual meeting, then you should consider that seat filled with a new member for a full term. That may leave you with an open position or two, but not a vacated one subject to the president’s appointment ability. If, however, your terms are staggered and the vacated position still has time beyond your new cycle coming up, then that member’s seat is still vacant. Your president could probably still fill that seat for the remainder of the term, even after your upcoming annual meeting.
I hope that helps. Again, I’m theorizing based on generalities. Good luck with it.
We have several board members who have moved away and need to update this. I have the guidelines but how do we update the original fed and state forms showing new president and treasurer?
When board members change, there really is no need to inform state or federal agencies immediately. Also, you cannot “update” any original filings for that purpose. Your corporate annual report that you file with your state’s Corporations Division gives an opportunity to update the state. The feds will be updated when you report your current board on the next Form 990 filing. Until those filings are due, there’s nothing compliance-related you need to do regarding board changes.
I am new to the world of Board of Directors. Because of the limited numbers we have I am now Board Chairman. We currently have 4 board members, our desire is 7.
The Director/ Operator of our Center does not want us to be a part of reviewing approving new board members. There is nothing in our by-laws one way or the other. I feel the Director making the decision of who governs over her position is a conflict of interest.
Should new board members only be reviewed by current board members?
Typically, yes. It is not uncommon for founders to essentially hand-pick the initial board members, subsequent picks are usually vetted and approved by the existing board, a voting membership (if any), or some combination. It is highly unusual for an Executive Director (a hired position) to have any say, much less authority, over who is on the board. The only exception would be a situation where the Executive Director is also a board member. But even then, the authority should not be exclusively theirs.
What happens when you have a non-profit foundation that does not follow their own by-laws, does not vote on anything and board members are added and deleted at the whim of the President with no votes on anything whatsoever?
What can be done about this by a concerned member of the public ?
Unfortunately, what you describe happens all-too-often. Equally as unfortunate, there is very little that you as a “concerned citizen” can do legally. I have seen situations where a lawsuit has been filed against a nonprofit for failure to abide by one or more tenants of its bylaws. One case that I personally witnessed in a NY court room ended badly for the nonprofit and the plaintiffs were actually granted board control of the organization by the presiding judge. But the plaintiffs were members of the organization and had legal standing to bring a suit. A member of the general public would not such have standing. About the only thing you could do is possibly contact your state’s AG’s office, but it’s doubtful you would get them to look into it over an allegation of not following their bylaws. Usually, it would take a credible allegation of financial impropriety, and even then, you would have to have a pretty compelling case.
“One case that I personally witnessed in a NY court room ended badly for the nonprofit and the plaintiffs were actually granted board control of the organization by the presiding judge. But the plaintiffs were members of the organization and had legal standing to bring a suit.”
You wouldn’t happen to remember the name of this case… doing some research on my end!
I do, Joanna, but it involves some close friends and even family members, so I’d rather not out them. Here’s a link to an article I wrote about the ordeal however: https://www.501c3.org/why-nonprofit-bylaws-matter-a-tragic-tale/ . I hope it helps fill in some details for you.
I am just now getting off the ground, and I have two new volunteers, and I was wondering what I need to do legally to add them to the board besides just voting them in or is that enough?
If you already have an initial board seated, then propose those additional individuals to the board and have a vote on their inclusion. If this IS the initial board, ask those you want to serve to be part of your endeavor as a board member. Whichever way, once your board is populated, further additions, subtractions, and term limits (if any) should be spelled out in your corporate bylaws. Good luck with it!
Is there anything that can be legally done if a board is completely shifting from the deceased founder’s mission. To the harm of the recipients of services. Example: School founded and funded to provide quality education to economically disadvantaged students but is now catering to the area that has undergone gentrification. Help. Just fighting to save a mission that is still much needed.
Sorry for the delay in answering. There really isn’t any prohibition on mission creep. Wholesale change to the purpose, like changing from a school to a homeless shelter, requires IRS approval. A change to the target audience of services, however, is perfectly legitimate, even if there are those who disagree with the decision.
Is it possible to have founding members of an organisation as board members in perpetuity and guaranteed not to be voted of the board of and NGO
The IRS doesn’t really care. This issue is state corporate law. Some states have maximum board terms, but that doesn’t mean someone can’t serve consecutive terms over and over. It’s best practice, at the board level, to have terms of some length, even if they continue to be renewed.