Saying Goodbye to Nonprofit Leaders: How Exit Agreements Protect Your Organization

ARTICLE | October 15, 2024

Authored by Vasquez + Company

Nonprofits face unique challenges when key executives or founders depart. The article "Use an Exit Agreement to Bid Farewell to Nonprofit Executives" outlines the importance of exit agreements, which differ from separation agreements, and serve to manage post-departure compensation and maintain relationships. These agreements help to guarantee an executive’s exit is handled respectfully and legally while safeguarding the nonprofit's interests.

Key Points:

• Understanding Exit vs. Separation Agreements: Unlike separation agreements that protect against legal action, exit agreements handle compensation and ongoing relationships.
• Three Common Scenarios: Catch-up compensation, "stay" incentives, and honorariums are options to recognize a departing executive’s contributions.
• Key Considerations: Financial viability, private inurement risks, stakeholder reactions, and contract issues should all guide the agreement’s terms.

Carefully planned exit agreements can help nonprofits bid farewell to valued leaders while securing the organization’s future.

For more information, read the full article here.

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