Who Owns a Nonprofit Organization?

Have you ever wondered who owns a nonprofit organization?


Are you looking to start a nonprofit organization? Are you wanting to personally own and manage it yourself?

Years ago, when I was just becoming familiar with the nonprofit sector, I wanted to start my own nonprofit. My idea was to employ women in developing countries to hand weave quilts that I would sell here in America. Then, with the funds that we made from the sales, I would pay the women and help them keep a stable income. Honestly, the idea wasn’t a bad one, but here was my problem: I wanted the nonprofit I created to be mine.

I had the same type of issue when I was an intern in Ukraine. I was working with 10 orphans in one flat and when other volunteers came I felt like these kids were mine and mine alone. I didn’t want to share them with the other volunteers. That seems crazy, right? Why wouldn’t I want to share the volunteer experience and enrich the kids’ lives even more?

In the latter example it is obvious that I was in the wrong, but I still come across people who want the first example to be true.

So, Who Owns a Nonprofit Organization?

The fact is, a nonprofit organization does not belong to one person. It is a separate entity and belongs to the public at large.

The Board of Directors are the keepers of the mission and they are ultimately responsible for the organization. Typically they will have term limits and they are only responsibly for a certain number of years.

The Board of Directors nominates the Executive Director. The Executive Director runs the organization on a day-to-day basis and reports to the Board. If the time comes that the Executive Director needs to be replaced, the Board of Directors will handle it.

So, is all hope lost? Can you start a nonprofit organization and really call it your own?

The straightforward answer is no. But, this shouldn’t stop you from starting a nonprofit. Many times the founder will become the Executive Director of the organization for a number of years, and when they decide to move on to something else, they will typically stay involved by being on the Board of Directors. For instance, I worked with a nonprofit organization where the founder worked as the Executive Director for 5 years, but after that time she felt pretty burned out and received an offer to become the head fundraiser in another organization. Rather than quit the nonprofit completely, she decided to join the Board of Directors and they hired an extremely competent, wonderful Executive Director that has helped the organization expand rapidly.

Ultimately, when  you are thinking of starting a nonprofit organization, your goal should be to further the organization’s mission. Nonprofits are not about ownership, they are about impact.


Related Articles:

What is the Board of Directors’ Role in Nonprofits?

Starting a Nonprofit Organization?

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