August 10th, 2017; Marinij.com
This is a bit of a strange story, simply because of the mission of the nonprofit involved. MarinSpace, which was established in 1988, promotes collaboration among other nonprofits apparently in part by providing a common space. However, the story as told here suggests that the organization was so ill prepared for a transition, so devoid of committed partners, or so unconvinced of its own current ROI that it is electing to dissolve rather than replace its executive or attempt a merger or straight acquisition. After it dissolves, it will have between $2 and $3 million in assets, including a building worth $2.5 million, and these will need to be distributed. The 14,500-square-foot building currently houses other nonprofits at 20 percent below market rate. Are they all just bored?
The board’s vote to dissolve occurred when longtime CEO Shelley Hamilton announced she no longer wished to play that role, opting instead to take another, part-time role.
“Her skill set is so specific and unique that when she decided to move to part-time, the board decided it would be [too] difficult to move someone into that (executive director) role with that same skill set,” said interim ED Peter Lee. “Instead of trying to go through that process, we thought it would be better to dissolve and spread the wealth in Marin County.”
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Lee laid out three possibilities for distribution of the assets: one organization could acquire the assets and staff and run the group relatively as-is; assets could be liquidated and distributed among a number of nonprofits; or a nonprofit could acquire MarinSpace’s building and staff, but the cash assets of approximately $300,000 could be distributed to other groups.
That building, by the by, has $570,000 of mortgage debt but a cash flow of approximately $280,000—at least for now. They expect the whole deal to be concluded by the end of the year.
The fact is that nonprofits move in and out of acute relevance. It may not be ideal that someone called this question only when the CEO stepped down, but at least it was called out and the assets are to be thoughtfully distributed. Just a note, the state attorney general or similar regulatory body usually must approve such plans.—Ruth McCambridge