10 Things Nonprofits Should Consider Before Electing to Dissolve


Times are still tough for nonprofits.  And many boards are grappling with the question of whether their organizations should be shut down.  Here is a quick list of 10 considerations for nonprofit boards thinking about dissolving their organizations:

  1. Can we continue to advance our mission effectively and efficiently?
  2. Do we have sufficient resources (not just financial) to continue our programs in a manner that still makes sense?
  3. What are our prospects for securing the resources we need to continue our programs?
  4. Can we realistically create new revenue streams without chasing dollars not truly related to our mission?
  5. How will our dissolution impact our clients/beneficiaries, staff, and other stakeholders, and can we take steps to mitigate the harm done to those most impacted?
  6. Are there other organizations that can fill the gap that would result from our dissolution, and can we transfer programs to such organizations to preserve services going to our clients/beneficiaries?
  7. Is a merger with another organization an alternative possibility we’ve thoroughly explored?
  8. Can we legally dissolve (if dissolution first requires us to pay off all of our liabilities and obligations or have them assumed by another party), and are we ready to dissolve?
  9. What resources will we require (e.g., lawyer, consultant) and what steps need to be taken (e.g., membership approval, Attorney General approval) for the dissolution?
  10. If we decide to dissolve, what legacy will we leave behind and how can we best honor the good work and accomplishments of the organization and its leaders?

Dissolving a nonprofit is not necessarily an admission of failure.  It may instead be a recognition that another organization can now carry on your mission better.  You can read more about dissolutions in a prior post written by Emily Chan here.