Nonprofit Law/ByLaw Breaches Ending in Dissolution of 501c3
The President of this 501c3 breached ByLaws by not conducting the election/installation of new officers based on the fact they hadn't found someone to take the Pres position. The 1st VP, 2nd VP, Corres Secy, Recording Secy and Treasure all agreed to another term. The members suggested having Co-Presidents; the President told them that wont work and refused to that.
An amendment to the ByLaw could have been done to include Co Presidents. They could have installed the other officers and the 1st VP could have presided over meetings until either a Pres was found or the organization amended the ByLaw to include Co Presidents. None of this was done as the Pres kept telling the members they had NO options. She also told them that it would forever be a problem in finding a President .. further giving the members the impression that w/no options, the organization was doomed. The members are older and believed what they were being told and based on this, the Pres got them to vote for dissolution.
I am a Past Pres of that organization and also the one who took care of the 1023 filing. I also created a Presidents Binder with all kinds of info to help them, along with availing myself to them for any questions should any problems arise.
This Pres knew to contact me when she needed donations of things from me and kept telling me how wonderful the club was doing so I had no clue there were any problems. As soon as I found out about the dissolution, I contacted the Pres and told her and some other members there were plenty of options and I would gladly help them because I have a lot of resources. She refused to tell the members that there were options and is continuing the dissolution.
Because they did not hold the election/installation of the other officers, they now have a 501c3 with no officers/no board because current Bylaw states that the current officers terms end when the installation of new officers takes place in May so they feel their positions are now over. The byLaws unfortunately did not have the clause "Officers (current ones) may be in office "until the election of their successors" - this is another By Law that should be amended so this never happens again.
The organization is financially solvent as the Pres told me they have nearly $10K in the Treasury. The members who have found out that I had options and solutions for them to keep the 41 yr old charitable organization going are very upset that they were misled into voting for dissolution by the Pres. They have asked me to help.
I called the Pres and she said she was continuing the dissolution and was working w/an attorney to get it done. I asked her for the name of the attorney so that I could let him know that the members were misled and they would not have voted for dissolution if they knew there were options/solutions. Pres refused to give me the attorney name. I would imagine this attorney does not know the real story here; only the Pres version of things.
I have been involved with non profits for over 30 years and have never seen this happen .. so I am unsure how to either 1) stop the dissolution since no one knows who the attorney helping is; 2) or let the dissolution get filed/completed and then file a form to restart the organization - with my concern being the loss of the 501c3 status.
I am happy to be the members' advocate and help them get the organization going again .. and I have the resources to put together a wonderful Advisory Board of professional business people in town who can be available as I am to assist the members should the need advice for anything as time goes on.
What can I do at this point so that the 41 yr old organization can continue its good works?
I have in my profile that this free forum is only for general questions relating to IRS federal exemption issues of 501(c)(3) organizations. Your issues are controlled by state law and states may differ somewhat with how they would treat such issues. Even though this forum is not for such state law issues, if you inform me whether the organization is a Indiana Nonprofit Corporation, I may be able to direct you. Also confirm that, in the Articles of Incorporation or Bylaws members have the right to vote for Board members (during elections).
Harvey Mechanic, Attorney at Law -
P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.