Guarantee Founder's Long Term Control of Canadian Nonprofit & Charity

Welcome back to the deep dive. Today, we're gonna be looking at something kinda interesting. Mhmm. It's about nonprofit organizations.

Mhmm.

If you've ever, like, worked with one or just kinda been curious about how they work, think you'll find this interesting. Yeah. So a lot of times we think of nonprofits as like super democratic. Right? Everyone gets a vote.

Yeah. Very egalitarian.

Yeah.

But the stuff we've been reading actually shows there's these other ways that founders can keep a lot of control.

Mhmm.

Which is kind of surprising. Right. So we're gonna, like, deep dive into that, see how it works, what these alternative structures are. What do think?

Yeah. Absolutely. I think you hit the nail on the head when you said, you know, most people probably picture this very, you know, open membership, everyone votes kinda thing.

Right.

But what we found is there's these perfectly legitimate ways that founders can kinda keep their vision going. Yeah. Even as the organization maybe changes, grows, it raises some interesting questions about control and mission and all that.

Absolutely. Okay. So let's start with like that standard picture, right? The one everyone has in their heads.

Okay.

It's almost like joining a club according to our sources here.

Yeah.

You incorporate, you have one class of member, anyone can join.

Right.

And the big thing is everyone gets a vote. They get to decide who's on the board. Right? Like, all these big decisions.

Exactly. And that's where The Source kind of frames it as a challenge. Yeah. Because what that creates is a situation where the founder could potentially get voted off the board by the general membership. You know, if the organization grows and grows, maybe those initial supporters the founder had aren't the majority anymore.

Oh, wow. Yeah. So then what what can they do?

Well, that's where it gets interesting. There are a couple of ways around this. One is actually really simple. You just make the board members the only members with voting rights.

Oh, interesting.

So, like, officially, only the board is considered members.

So they get to choose who's on the board.

Exactly. And that makes it a lot harder for other people to come in and remove the founder as long as they stay on the board of course.

Right. Makes sense. But isn't there a chance to alienate some people? Like what about people who donate money or volunteer their time? They might wanna have a say.

Right?

Oh, that's a good point. And that kind of leads us to the second method that our source talks about, which is to have two different types of members.

Okay. Yeah. What's that about?

So basically, you'd have what you might call voting members, and they're the ones who are on the board. They make the big decisions, like who else gets to be on the board.

Right.

And then you have nonvoting members. These are people who, you know, support the mission. They might donate. They might volunteer, but they don't get to vote on the leadership.

Gotcha. So the founder gets to keep control, but there's still room for people to be involved.

Exactly. It's like having your cake and eating it too, in a way.

I like cake. Yeah. But does this actually work? I mean, legally and everything?

Yeah. Yeah. That's the thing. Our source is very clear that this is all above board. It's all within the rules of how nonprofits are set up.

They even use a good analogy. It's like a school club. Think about it.

Mhmm.

You don't usually have every student voting for club officers. Right?

Right.

So it's either just the officers who vote or you have officers who vote and then regular members who participate without voting.

Okay. I see. So what's the big takeaway here? Why do founders do this? I mean, what's the main goal?

Well, I think it comes down to making sure the founder can keep a strong hand in guiding the nonprofit. It's about who gets to decide the organization's direction, and they wanna make sure it stays true to their vision.

So to be clear, it's about making sure that a board that maybe has different ideas can't just come in and take over. Right?

Right. Exactly. It's about that balance between having people involved, but also staying true to the founder's original mission.

Okay. So let's recap. We talked about two main ways founders can stay in control. Yeah. One is you only let board members be official members, so they get to pick who's on the board.

Right.

And the other is you have two types of members, voting members who are the board and make decisions and non voting members who participate, but don't get to choose the leadership.

Exactly. And all of this addresses the problem of a founder potentially losing control to a board with a different vision.

Right. Right. So this has been really insightful. It makes you think about, like, what the point of a nonprofit is. Is it all about democracy?

Or is it about making sure a certain vision gets carried out? What do you think?

That's a great question. I don't know if there's one right answer, but it definitely makes you think about the different models out there and what might work best in different situations.

Absolutely. And for everyone listening, I think it's worth pondering, you know, when you look at different nonprofits, what do you think is the best way to balance things? How do you make sure the organization stays true to its goals while also letting people have a voice?

Yeah. It's something to consider. There are lots of different ways to run a nonprofit and it's fascinating to see how these structures play out in the real world.

Thanks for joining us for this deep dive. We'll see you next time.