by David Paradine

Created on: June 12, 2009   Last Updated: June 16, 2009

Shutting Down A Not For Profit

Shutting down a not for profit organization is really not difficult at all, apart from the politics that is. It is usually the people that are involved in the organization that can and will be the greatest obstacle to this process.

The actual mechanics are pretty simple. Employees of the organization need to be terminated, any and all outstanding debt paid, the Board of Directors dissolved and then what ever funds and/or assets of the organization that remain distributed according to the provisions of dissolution in either the organization's Articles of Incorporation or Bylaws. Usually these provisions provide for the assets to be distributed to another organization or similar organizations that, as nearly as possible, fulfill the intent of the organization being dissolved. This will help to keep the IRS out of your hair at a possible later point in time. Pretty simple huh?

Now, in reality, the greatest obstacle that needs to be overcome before any not for profit organization can be shut down, is convincing those individuals who are involved in that organization, that this action needs to occur. These are individuals who have very often taken ownership of the organization and who, many times, derive their own identity from their association with the organization.

So as one might imagine this is not an easy task. In fact, this specific task is always the most difficult to accomplish, and the singular reason why there are so many not for profit organizations that should have gone out of business a long time ago, but are still hanging on. These are organizations that have long outlived their intended purpose, need, or usefulness, but because of a few, continue to hold on, unwilling to let go.

Even when it is quite obvious and apparent to most that the organization's day in the sun has long since come and gone, the not for profit's patriots hang on. But after all, they are such nice people, or they mean well or worse yet, what will they do if we shut down? These well meaning but misguided individuals continue to foster and promote ineffectiveness and the wastefulness of precious charitable dollars. Not to mention continuing to contribute to the negative perception of not for profit organizations that is held by many.

So, as you can see, shutting down a not for profit organization is really quite easy. It is only the people associated with the organization that get in the way.

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