How do I structure my nonprofit?

Many people think there is only one way to structure a nonprofit corporation in Texas: have at least three individuals as the board of directors. While this is definitely the most common scenario, it is not the only option and is sometimes not even the best option. When clients come to our office asking for help in starting a nonprofit organization, I always send them back to the drawing board to think about what they want the organization to look like in ten to fifteen years. Looking that far down the road helps make foundational decisions on the front end that will serve both the founder and the organization’s mission well into the future. There are typically two types of mission-driven organizations: those that are for a particular time/season of life, and those that are meant to be the founder’s life’s work and/or passion. What are some examples of each? Take a group of parents with school-age children who want to start a little league for sports. This is an example of an organization for a particular season of life. The original parents likely are only interested in getting the organization set up and running to serve their children during their adolescent years; in twenty years, the original founders are more than happy to be sure that others have taken over the roles of the Board of Directors and are managing the organization. Here, a typical, self-perpetuating board of directors is the right governance option. Contrast the little league example with that of a woman whose heart is set on ministering to women in unplanned pregnancies and their babies. This woman sees a need in her community for a resource center to help moms, free of cost, to provide the best life possible for themselves and their children. She knows this work is her life’s calling. Here, the three-board-member model may not be the best organization structure. Instead, a better option would be one that allows the founder to keep the organization’s mission in line with what she believes to be and to protect her ability to participate in the ministry. Unlike the little league example, this woman hopes and expects to still be running the organization twenty years from inception. As an alternative, a sole-member corporation organization would be the starting point to structure such a ministry nonprofit and ensure the organization’s vision stays in line with the founder. If you’re wondering whether pursuing a formal nonprofit organization is the right move for you, reach out to us to set up a consultation. We would love to help you navigate making a change in your community!