So what happens when a founder and board president has stepped away in practice, but still controls the organization on paper?
Founder-led nonprofits often begin with passion, urgency, and personal sacrifice. In the early days, it was common for founders to centralize authority. They manage operations, control finances, and carry institutional knowledge. But when a founder disengages while retaining control, especially financial control, the organization enters dangerous territory. For small, volunteer-run nonprofits. It can quickly become life-threatening.
The Core Problem: Concentrated Authority Without Oversight
We all know that every nonprofit board has a fiduciary duty to:
- Ensure financial oversight
- Protect organizational assets
- Safeguard program participants
- Act in the best interest of the organization
But when one individual has sole access to bank accounts, insurance, and decision-making authority (and becomes unresponsive) the board is not just inconvenienced. It is compromised. No nonprofit should ever have:
- A single signer on accounts
- No backup access to emergency funds
- No operational continuity plan
This is not about mistrust. It is about governance hygiene.
Grace and Accountability Can Coexist
The founder may be struggling with mental health. The board has attempted patience. Volunteers are stepping up. That compassion matters. But governance requires clarity. For example, if your org is an animal shelter, and animals nearly die because financial approval cannot be secured, the organization has crossed from awkward to untenable.
It is possible to acknowledge a founder’s past contributions while also recognizing that current capacity no longer aligns with responsibility.
What the Remaining Board Members Must Do
First, document everything:
- Attempts to call meetings
- Missed communications
- Emergency delays
- Operational risks
Documentation protects the organization and the individuals involved.
Second, review the bylaws carefully. Many bylaws contain provisions for:
- Removal of officers for failure to perform duties
- Removal for cause
- Special meetings
- Quorum exceptions when members fail to appear
If bylaws require all members to be present for votes, but one member consistently refuses to attend, legal counsel may be necessary to interpret how nonparticipation affects quorum requirements. This is where the board must consult a nonprofit attorney. This is not a DIY governance moment.
Immediate Risk Mitigation Steps
Regardless of removal discussions, the board must prioritize:
- Emergency financial access: Two authorized signers on accounts should be standard practice.
- Insurance access and verification: Confirm active coverage and ensure at least two board members can access policy information.
- Operational continuity plan: Who can authorize emergency operations today?
If the president refuses to transfer access, the remaining board members may need to:
- Contact the financial institution with proof of board membership
- Present governing documents
- Seek legal guidance on gaining access
Financial control cannot remain with an unavailable officer.
Founder Syndrome Is Real and Fixable
This situation reflects a common dynamic often called founder’s syndrome: the inability to transition authority from founder control to institutional governance. Healthy nonprofits evolve from personality-driven to system-driven leadership. If the founder is unwilling or unable to transition, the board has a duty to the mission, not to the individual.
Hard Truth: The Board’s Duty Is to the Organization
Nonprofit board members are not honorary advisors. They carry fiduciary, legal, and ethical responsibility. If:
- Program recipients are at risk
- Funds are inaccessible
- Governance is paralyzed
The board must act. That action may include:
- Calling a special meeting
- Seeking legal interpretation of bylaws
- Removing an officer for nonperformance
- Reconstituting leadership
It may feel disloyal. It may feel dramatic. But failing to act is not neutral. Failing to act is a decision that is made with consequences.
If the Founder Cannot Lead, The Board Must
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The mission belongs to the organization, not the founder. Volunteers who are stepping up are demonstrating commitment to that mission. Governance must match that commitment. The path forward may require legal guidance, uncomfortable conversations, and structural change. But the alternative, continued inaction, exposes the organization and the board itself to serious risk.
Leadership sometimes means protecting the mission from drift, even when that drift comes from the person who started it. This is heavy work. But protecting the mission is the work.
Download the Board Facing Action Checklist >>
Contact the Nonprofit Snapshot
Protecting the organization sometimes requires difficult decisions, temporary discomfort, and shared responsibility. Boards that act decisively in moments of governance failure preserve trust, stability, and mission impact. The Nonprofit Snapshot exists to help boards assess readiness: financially, structurally, and ethically. Strong governance is not about avoiding conflict. It is about facing it with clarity and care.
The Nonprofit Snapshot can help organizations take this first step by offering a clear view of organizational health, capacity, and risk as critical foundations for effective advocacy. Please share your questions and comments on our Nonprofit Snapshot page on LinkedIn.