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Checklist / costs for closing down?
Has anyone been through the exercise of costing out the process of closing down? Though happily, I haven’t had to do this and hope not to, I’d like to have an estimate of what the process would cost. Then, if I were ever needing to make tough financial decisions, I could factor that into our runway planning.
I’d be grateful for anything you can recommend! Google returns are short, like this and this – I’d love to find more of a webinar discussion of tradeoffs or case study highlighting considerations, and focused more on the process (to inform cost estimates) than the legal side.
charitableallies.org
How Do You Close a Nonprofit? - Charitable Allies
Closing a nonprofit can be a difficult choice, but it's important to close it properly and leave a legacy you're proud of.
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5 Replies
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Gwen: Back when I was writing my graduate thesis (late 1990s), I interviewed a number of nonprofit reps who had been in an organization that had closed down. Sorry to say, I don’t have or know about helpful guidance on costs of closing down. From my recollection of those interviews, this wasn’t a topic that came up much… costs tended to dwindle at the end (as tasks wrapped up) rather than ramp up. That is, my sense is that the stuff at the end tends to be administrative and social, things that don’t bring unusual costs.
What kind of costs are you imagining might crop in?
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@Gwen Propel developed a guide here is a link to the web page https://propelnonprofits.org/resources/strategic-sunsetting/
propelnonprofits.org
Strategic Sunsetting - Propel Nonprofits
Sunsetting can be a normal, mission-focused part of an organization’s life cycle and occurs when the work an organization set out to do has been done, capacity has been reached, and energy and resources are needed elsewhere.
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Thanks for sharing this Amanda!
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Hi Gwen…you’re right, there doesn’t appear to be anything I can easily get my hands on either. I have been through a closure in years past and these are the items that come to mind, though I’m sure there are more that others may name: legal fees to dissolve the corporation and settle any other claims, preparation fees for the final Form 990, return of unspent grant funds, settlement of lease liabilities (office space, copiers, etc), storage fees for documents to be retained, any software subscriptions (e.g. accounting software) that may need to be maintained during the wind-down, bookkeeping fees during the wind-down.
Hope this remains hypothetical for you!
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Hi Gewn,
Thanks for raising this question and to all that provided some guidance. I am also in the process of closing a small nonprofit in California that we founded six years ago. I haven’t really thought about dissolution expenses per se as I assume that it was just me (as interim treasure) volunteering my time to complete all the paperwork.
Our mission is still relevant and we got local traction. However, we are all volunteers, and sadly our time has been limited. The board is “on board” (no pun intended), and we have just a few minor assets to transfer. Cash and our curriculum should be straightforward. But we also owned a trademark on our name .. does anyone know how that transfer takes place?
Thank you all!
Maria