Ask a Nonprofit Specialist: Legal protection of control within public charities
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Question: I am the interested in starting a public charity, and I want to legally protect my influence and ability to control the affairs of the organization. How can I do this?
I get this question or some variation of it fairly regularly, and my response is a quite lengthy description on the nature of public charities and the reality that nonprofit organizations of this type do not have owners, by design, making it impossible to legally protect an individual’s control of an organization.
Short answer: You can’t.
Long answer: Public charities are an IRS designation of organizations that are organized and operated for exempt purposes. Exempt purposes can span a wide variety of activities intended to improve the common good. The organized and operated requirements for charitable organizations are very specific, including a prohibition of private benefit, so private ownership is not an option.