How should a nonprofit organization distribute its assets upon dissolution?

When a nonprofit organization in California decides to dissolve, it is required to distribute all of its assets to other charitable organizations as determined by the board of directors or trustees. This process is called “distributing assets upon dissolution”. When distributing assets upon dissolution, the nonprofit organization must follow specific laws. The board of directors must first comply with any restrictions placed on assets, such as contractual obligations and donor restrictions. If such restrictions exist, the board of directors must comply with them and distribute assets accordingly. Once any restrictions have been honored, the board of directors must then create a plan for distributing the assets. Although the board of directors are free to determine how the assets are to be distributed, they must ensure that the assets are given to organizations with similar charitable purposes as the original organization. The board of directors must also keep detailed records of the assets and the organizations to which they are distributed. Finally, the board of directors must obtain the approval of the Attorney General prior to distributing the assets. This ensures that the board of directors has complied with all laws and regulations when distributing the assets. In summary, when a nonprofit organization in California is dissolving, the board of directors must comply with any restrictions placed on the assets and must create a plan for distributing the assets to similar charitable organizations. The board of directors must also obtain the approval of the Attorney General prior to distributing the assets.

How should a nonprofit organization distribute its assets upon dissolution?

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