Is Your Nonprofit Faced with Dissolution in the Wake of COVID-19?

Challenges for Nonprofit Organizations Due to COVID-19

As a result of the COVID-19 pandemic, many nonprofits are experiencing increased demands for services, yet have been hindered or completely cut off from responding due to stay at home orders, revenue loss, and physical distancing. Recent reports indicate over 60% of all nonprofits report a decline in individual donations.

Due to the unprecedented economic disruption caused by the coronavirus (COVID-19) pandemic, many nonprofit organizations may have to close permanently in a hurry. Even so, it’s never wise to simply close down and let the pieces fall where they may. If you do this you could end up haunted by unnecessary headaches, lawsuits, and debts for years.

Dissolving a California Nonprofit Corporation

A California nonprofit corporation that decides to close operations must take certain steps to dissolve and distribute any remaining assets. These steps apply after the nonprofit corporation's board of directors or its membership votes to cease operations but before any remaining assets are distributed.

The process for dissolving a nonprofit corporation involves various governmental agencies, including the California Attorney General's Office, Secretary of State, Franchise Tax Board, and Internal Revenue Service.

Attorney General’s Role in Dissolving a Nonprofit Organization

Prior to disposing of any remaining assets, the nonprofit corporation must provide notice of the dissolution to the Attorney General's office and request a waiver of objections. A copy of the Attorney General's waiver of objections letter must be submitted with the Certificate of Dissolution when filed with the Secretary of State. The Attorney General's office publishes a General Guide for Dissolving a Nonprofit Corporation, which briefly outlines steps to dissolving a nonprofit corporation.

Resources for Nonprofit Organizations Regarding Coronavirus

Our Blogs and Newsletters

Please see our recent blog posts and NPO newsletters for information and resources for nonprofit organizations in the wake of the Coronavirus.

Community Foundations in California for Nonprofit Relief Funds

More than 500 U.S. community foundations in all 50 states, plus the District of Columbia, have created relief funds to support those affected by COVID-19 -- directing critical relief to local nonprofits and partnering with local governments and health organizations to help contain its spread. To date, these efforts have already mobilized $882.8 million to help those in need in every corner of the country. Announced grant making to date totals more than $462 million.

The following is a list of relief funds in California:

• Amador Community Foundation established the Amador Community Foundation Disaster Relief Fund.

• Anaheim Community Foundation established Rapid Response Nonprofit Grants.

• California Community Foundation has created the COVID-19 LA Response Fund.

• Central Valley Community Foundation launched an Emergency Response Fund.

• Coastal Community Foundation, Leichtag Foundation and Rancho Santa Fe Foundation launched the North County COVID-19 Response Fund.

• Community Foundation of Mendocino County established a COVID-19 Relief Fund, Save-the-Day Grant Program and the Business Innovation and Resiliency Fund.

• Community Foundation for Monterey County has kicked off its COVID-19 Relief Fund.

• Community Foundation for San Benito County activated a COVID-19 Relief Fund.

• Community Foundation of San Carlos established the San Carlos COVID-19 Response Fund.

• Community Foundation San Luis Obispo County established a Disaster Support Fund.

• Community Foundation of San Joaquin established the San Joaquin Emergency Response Fund and the Stockton Children's Fund.

• Community Foundation of Santa Cruz County has created a COVID-19 Local Response Fund.

• Community Foundation Sonoma County is implementing its Sonoma County Resilience Fund for COVID-19 relief.

• Community Foundation of the Valleys has established a COVID-19 Response Fund.

• Community Foundation of the Verdugos launched the CFV COVID-19 Response Fund.

• East Bay Community Foundation has established the Just East Bay Response Fund.

• Hispanics in Philanthropy established the COVID-19 Rapid Response Migration Fund.

• Horizons Foundation, the world’s first LGBTQ community foundation, launched its LGBTQ COVID-19 Response Emergency Fund, which will award emergency grants to Bay Area LGBTQ nonprofits amid the COVID-19 pandemic.

• Humboldt Area Foundation and their affiliate Wild Rivers Community Foundation launched the COVID-19 Regional Response Fund.

• Inland Empire Community Foundation launched its IE COVID-19 Resilience Fund.

• Kern Community Foundation has established the Kern County COVID-19 Relief Fund.

• Latino Community Foundation established the Love Not Fear Fund.

• Long Beach Community Foundation established the Coronavirus Relief Fund.

• Los Altos Community Foundation launched the 2020 Nonprofit Relief Fund.

• Marin Community Foundation has created the COVID-19 Fund of MCF. So far they have supplied about $7 million in grants from their donor-advised funds, in addition to $2.25 million in grants and other spending.

• Napa Valley Community Foundation has activated the Napa Valley Community Disaster Relief Fund.

• North Valley Community Foundation established the Coronavirus (COVID-19) Rapid Response Fund.

• Orange County Community Foundation has created the OC Community Resilience Fund.

• Palo Alto Community Fund established the Covid-19 Relief Fund.

• Pasadena Community Foundation established the PCF COVID-19 Response Fund.

• Placer Community Foundation launched a COVID-19 Response Fund.

• Sacramento Region Community Foundation activated their Sacramento Region Disaster Fund.

• San Diego Foundation created the San Diego COVID-19 Community Response Fund with $1.3 million to rapidly deploy flexible resources to community-based organizations at the frontlines of the coronavirus outbreak in San Diego County.

• San Francisco Community Foundation established the SFF COVID-19 Emergency Response Fund.

• Santa Barbara Community Foundation established the Covid-19 Joint Response Fund.

• Shasta Regional Community Foundation established a COVID-19 Relief Fund.

• Silicon Valley Community Foundation has launched its COVID-19 Regional Response Fund, COVID-19 Education Partnership, Regional Nonprofit Emergency Fund, Silicon Valley Strong and the Small Business Relief Fund.

• Solano Community Foundation launched the Solano Community Impact Fund.

• Stanislaus Community Foundation and United Way of Stanislaus County launched a COVID-19 Fund.

• Tahoe Truckee Community Foundation launched the Tahoe Truckee Emergency Response Fund.

• Ventura County Community Foundation launched the Ventura County Rapid Response Fund.

Have Questions About Your Nonprofit’s Need to Dissolve Due to the Challenges of COVID-19? We can help!

If you are a tax-exempt organization and have questions, attorney Jonathan Grissom can help. Mr. Grissom regularly assists nonprofit organizations with the winding up and dissolution process.