Considerations in Contemplating Your Nonprofit’s Future

  • Government Programs

banner

View All Toolkit Sessions

During this unprecedented time in 2020, much future planning has been put on hold or completely upended. This session will feature options and solutions for nonprofits and their future revolving around mergers, joint ventures and dissolutions.

Session Overview

Deciding Your Options
  • Remember nonprofits have multiple options when planning for the future of the organization:
    • Merger/acquisition
    • Joint venture
    • Dissolution
    • Collaborations
    • Bankruptcy
  • A joint venture is a business arrangement in which two or more people agree to combine their resources to achieve a common goal.
    • Can be contractual, but usually a new entity is formed.
    • Scrutinized by the IRS because of charities, which should have control over their assets
  • A merger is a statutory combination of two entities into one; they take time before, during and in the end.
    • The surviving entity gains all assets and liabilities from the merger.
  • Steps of a merger:
    • Conduct a thorough examination of assets, liabilities, contracts and gifts.
    • Get the approval of board members.
    • Enter a merger agreement.
    • Obtain approval of the Michigan Attorney General.
    • File a Certificate of Merger with the Michigan Department of Licensing and Regulatory Affairs (LARA).
    • Notify the IRS.
  • Consolidation is when two or more entities combine into a single new entity.
  • Dissolution is a halt on corporate existence.
  • Steps of a dissolution
    • Get board and membership approval.
    • Pay or make provisions for outstanding debts and liabilities.
    • Distribute remaining assets to other charities.
    • Get approval from the Michigan Attorney Generals.
    • File certificate of dissolution with LARA.
    • Send and publish notice to claimants.
    • Apply for tax clearance with the Michigan Department of Treasury.
    • Notify IRS.

Share this resource:

Share on facebook
Share on twitter
Share on linkedin
  • Check your organization’s balance sheet to get an understanding of what to do next.
  • Think about meaningful ways for send-off, goodbyes and celebrations.
  • Decide if you are trying to preserve the mission or the organization.
  • There are informal collaborations, alliances, fundraising assistance and social enterprises you can implement.
Download
Download
Download
Download
Download
Download
Download

COVID-19 Impact Study

Have your voice heard by sharing your nonprofits experience responding to COVID19.

Get Started

Newsletter Signup

Sign up for our newsletter! Fill out the form below to be added to the MNA Covid Response newsletter.