Closing Permanently
The Alliance has compiled this set of resources on closing permanently from amongst its own offerings as well as those throughout the nonprofit and museum sector.
Alliance Resources
AAM’s white paper on Direct Care of Collections
The Direct Care of Collections: Ethics, Guidelines, and Recommendations white paper provides field-wide guidance on the use of proceeds from the sale of deaccessioned objects. First issued in 2016, the paper was updated in 2019 to reflect the updated FASB accounting standard that allows for direct care as well as acquisition.
Law and Ethics: An Ounce of Prevention
This Museum magazine article addresses ethical and legal considerations for the closure of a university museum and its collection to be sold. The article addresses MOUs, legal impediments due to donor restrictions, the role of a separately incorporated friends group, and the vulnerability of museums run by non-museum parent organizations.
Other Resources
Closing Your Business: What You Need to Do
Nolo observes that closing a business legally and safely requires more steps than starting one. The article includes general information about state requirements for dissolving a corporation and has a link to the secretary of state’s website for each state. It also has a state-by-state summary of laws related to final paychecks for employees. As an aid in keeping the process organized, it provides a checklist of 20 things to do after making the decision to close. Note that the article is written to assist for-profit corporations; laws concerning the distribution of a nonprofit’s assets are different, requiring distribution to other nonprofits.
Facts about Terminating or Merging Your Exempt Organization
The Internal Revenue Service (IRS) offers a Fact Sheet about Terminating or Merging Your Exempt Organization (PDF, 4 pages) that provides important information about what should be reported to the IRS when a tax-exempt organization shuts down, transfers assets, or merges with another tax-exempt organization.
The Small Business Administration shares technical and legal resources for closing a business, transferring ownership, liquidating assets or filing for bankruptcy.
Making A Good End: How to Close a Museum
This webinar from the American Institute of Architects Connecting to Collections series provides the specific actions needed to bring a “good end”, including legal requirements, collections disposal, maintaining community relations, and recognizing the deep commitments of founders and other stakeholders. Case studies are used to illustrate specific points and ideas. There is also a 2-page PDF with a list of books and articles helpful when making a decision to close permanently.
Termination of an Exempt Organization
Internal Revenue Service provides information on how to file an annual report or notice after an organization’s termination and required disclosure information.