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Reader Question – Replacing Nonprofit Board Members Who Quit

Reader Question – Replacing Nonprofit Board Members Who Quit
Question

Maryann asks:

We are a board of directors of a +55 nonprofit adult community. We have had multiple board members quit and are down to the President & Vice-President. With only two sitting on the board, how do we make a motion to appoint new members to fill the remaining time left on the board chairs that have been vacated?

Answer

Greg McRay responds:

The first thing to do is to check you bylaws.  It could be that the solution is spelled out directly.  If not, it might be more challenging.

If the officers and/or directors you mentioned resigned prior to the end of their terms, they may still technically be considered on the board.  It is not uncommon to see bylaws that state that even in resignation, the effective date of the resignation is when the position is replaced.  If you know who you would wish to serve in their stead, you could call a board meeting, extending notice even to those resigned, and hold a meeting to nominate and elect the replacement board members.

If your bylaws don’t have such an effective date verbiage, and/or you know they won’t show, the issue is really one of quorum.  With only two board members, you technically do not have a sufficient number of board members to conduct business.  But, the IRS doesn’t really get involved in that, so you don’t have a federal issue.  Fortunately, most states will allow the two of you to proceed without a proper quorum, mainly because you don’t have any other choice.  You can always check with your state’s AG’s office to make sure.

From time to time, we highlight a reader question that was submitted in response to another article. We try to pick questions that will resonate with a broad audience. In other words, if the asker is wondering about this issue, many others probably are, as well!

Greg McRay, EA

Greg McRay is the founder and CEO of The Foundation Group. He is registered with the IRS as an Enrolled Agent and specializes in 501(c)(3) and other tax exemption issues.

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