The Nonprofit Officer Exit: 5 Steps for a Compliant Transition

In this week’s Two Minute Treasurer Tip Podcast, Cyndi discusses the topic of the nonprofit officer transitions. The officer exit is an occurrence every small nonprofit will go through, with some going through it each year. Here’s a transcript, with an audio below.

Transitioning treasurers in an organization usually requires a fair bit of training. But we’ll talk about all the details around that in another podcast. Today, I just want to talk about some of the key areas that need to be addressed in order to ensure that the officer transition is both legit and legal.

Nobody wants to leave office and learn later that they might still be liable for actions that the group takes, even though they’re no longer on the board. And even seasoned volunteers might find that they forget some of these steps, only to have to clean them up later.

I’ve left office forgetting to do some of these only to realize a year or two later that I failed to clean up after myself. Thankfully, nothing bad happened. But it could have, and I was really lucky. Let me help you learn from my oversight:

1. Start by Taking a Look at Your Bylaws

These should indicate the process for adding and removing board members, so make sure to follow those.

2. Update Your Meeting Minutes

Make sure that your meeting minutes reflect the change in officer roles. They should include the individuals, along with their titles or their new role in the organization, as well as when this transition becomes effective.

3. Get the Bank Signers Changed

Help the incoming board get bank signers changed at your bank. Get yourself removed if you’re outgoing and then get the incoming signers added. Sometimes that can be harder than it should be.

4. Change the Principle Officer on Record with the IRS

This step is one that I failed to do recently. To do this, it usually means completing whichever Form 990
that your group usually submits. If the next treasurer does this, instead of you, the outgoing treasurer, you might remain on record here for a very long time.

5. Update your Insurance Company

And lastly, if you’re insurance company requires it, get them an updated officer list as well.

If I’ve overlooked anything in my key steps, please let me know. Thanks for listening! And if you have a question you’d like answered, just email me at [email protected].

Transitioning Treasurers? Get the complete Guide to a Smooth Treasurer Transition here.