175: Oopsies, I Take It Back | Can You Revive a Dissolved Nonprofit?

A nonprofit went quiet. Everyone got busy, the work stopped, and somewhere along the way it got "dissolved." Now you're ready to bring it back. Is that even possible?

Meghan and I tackle a layered listener question that delves into a really misunderstood issue in the nonprofit world. We also get into what really happens when a founder-led org goes dark, why so many nonprofits stall out in their first few years, and what it actually takes to bring one back from the dead.

Real Listener Question:

"I was an officer for a small nonprofit that the president unilaterally decided to dissolve about a year ago. The org had been on pause while the board was busy with life stuff, and the president just did the dissolution herself. I really want to get back to the work. How do I revive the corporation? And do we have a leg up on getting our 501(c)(3) status again since we've already done it once?"

Meghan and I dig into what "dissolved" actually means, how a nonprofit might secretly still be alive, and the people side of reviving a mission that someone else already laid to rest.

What You'll Learn:

• Why so many new nonprofits stall out in their first few years
• The difference between truly dissolving and just abandoning a nonprofit
• How to check if your org still exists with the state and the IRS
• Why you don't lose tax exemption for missing a single 990
• Why the IRS gives you no special leg up for having been approved before
• The messy interpersonal drama that can arise when you're dealing with passionate people

Bottom line: Startup energy doesn't last forever, and pausing or closing a nonprofit doesn't make you a failure. But before you reanimate a dissolved org, check what's actually still alive, and tread carefully with the people who were there the first time around.

Resources from this Episode

• Previous Episode: https://birkenlaw.com/charity-therapy-podcast/ct174-public-charity-private-foundation
• Episode Transcript: https://birkenlaw.com/wp-content/uploads/2026/10/CT175_Transcript.pdf

Connect with Us

• Jess Birken: https://www.linkedin.com/in/jessbirken/
• Meghan Heitkamp: https://www.linkedin.com/in/meghan-heitkamp-829254115/

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Transcript

Jess Birken 00:00:02  Welcome to Charity therapy, the podcast where we explore the ups and downs of the nonprofit sector and answer your burning questions. I'm your host, Jess Birkin, owner of Birkin Law Office, and I'm excited you're here. Imagine hanging out with me and my super smart, funny, nonprofit expert pals. You get to ask them anything about your nitty gritty nonprofit life and get their wisdom for free. Whether you're a seasoned pro or just strapping on your nonprofit boots, we're here to share stories and remind you you're not alone on this journey. So get ready to join the conversation and bring me the tough questions I ain't scared. Ready to rock? Let's dive in. Hello. Hello, this is Megan, and welcome to this episode of Karaoke Therapy. Jess and I recorded this one a little while back, and this is a.

 

Meghan Heitkamp 00:00:50  Super common question in the nonprofit world. Can you bring a nonprofit back after it's been shut down? The short answer is maybe. And, stay tuned in for the longer answer. Let's get into it.

 

Jess Birken 00:01:03  Hello and welcome to this episode of Charity therapy today. Megan and I are teaming up to answer your nonprofit questions. Hey, Megan. Hey, Jess. What are we doing today?

 

Meghan Heitkamp 00:01:14  Okay, so before we even get into it, I have, like, a little backdrop question for you, Jess. Okay, so we're going to be hearing from someone who was working with a really small organization where everybody got sort of busy and put it on pause for a while, and we'll talk about their specifics later. But I was like, oh, gosh, this happens all the time. Like so many of our clients, this happens too. So I just wanted to have you give us a little overview, like for newer, smaller organizations like why does that happen? What's happening there? What does that look like?

 

Jess Birken 00:01:47  So okay.

 

Jess Birken 00:01:49  Here's the.

 

Jess Birken 00:01:50  Thing. Starting a new nonprofit is hard work. And I think what can happen, not all the time, but what can happen is people have a lot of energy.

 

Jess Birken 00:02:01  Like a lot of like, let's go, let's do it. We're going to save the world. And then 1 to 3 years in the grind, the reality. The difficulty of fundraising. The fact that there are a lot of other organizations maybe doing something similar to yours, the fact that, like, maybe some of your key people had a disagreement early on and now it's just you. There are a lot of things that can just sort of like make it extra hard. And I think that first couple three years is the danger zone. Sometimes I say starting a new nonprofit is like starting a new restaurant, like nine out of ten are going to fail in the first year. And it's just kind of a sad situation. That's why we're always like preaching. You got to have you got to surround yourself with the right support. You got to have plans. You got to have a good foundation. You got to know what you're doing, where you're going and who you're doing it with.

 

Meghan Heitkamp 00:03:05  It makes me think of like a newish relationship where it's like you've got your honeymoon phase, and sometimes that lasts for six months, and sometimes it lasts for a year and a half or one month or whatever.

 

Meghan Heitkamp 00:03:16  But at some point it is sort of like the more naive phase ends, and sometimes it's where the, like, really good stuff happens on the other side of it, but it's not an easy transition, and it happens in a new non-profit as well.

 

Jess Birken 00:03:34  Absolutely. That's a great metaphor. I'm trying I'm desperately trying to think of a joke related to, like, the newness of a relationship and coming up empty.

 

Meghan Heitkamp 00:03:43  And.

 

Jess Birken 00:03:44  To move on.

 

Meghan Heitkamp 00:03:44  Moving on. It's okay. Sometimes we're not on it. Okay, well, I do have a listener question about this. And delicious dive right in person says I was an officer for a small nonprofit that the president unilaterally decided to dissolve about a year ago. The org had kind of been on pause for a while, while the board members were busy with other life stuff, and the president just did the dissolution by herself. This was a year ago. I really want to get back to the work of the nonprofit. But how do I revive the corporation? Do we have a leg up on getting the C-3 status again since we've already done it once?

 

Jess Birken 00:04:21  Oh my gosh, there's so much in this question.

 

Jess Birken 00:04:25  I was like, not even prepared for the layers.

 

Meghan Heitkamp 00:04:28  Layers on layers.

 

Jess Birken 00:04:29  So first of all, the president unilaterally decided, well.

 

Meghan Heitkamp 00:04:34  That's a problem.

 

Jess Birken 00:04:36  That's not how that's supposed to work. The board is supposed to vote on things as a group. I'm kind of wondering, though, it sounds like board members were busy with life. The president just did it all by herself. There's nothing in here that says this, but it feels to me like the president is our charismatic founder, who is the one who had the big idea, who's the one who was like, I'm driving this train, I'm moving it forward. I am the lifeblood of this organization. And for better or worse, that person has to recruit other people to help.

 

Meghan Heitkamp 00:05:11  Them.

 

Jess Birken 00:05:12  Because they have to have a board. And so if those people are not truly bought into the vision and they're not like on that same level of like, we're going to make it happen, all of a sudden it starts to become really, really, really difficult for this one person to do everything by themselves.

 

Jess Birken 00:05:29  And we've seen that so many times.

 

Meghan Heitkamp 00:05:31  So many times.

 

Jess Birken 00:05:32  So I'm going to give this president some grace and just sort of assume these board members were so busy that they didn't even come to meetings, and there was nobody else to decide. We'll just give them that. We'll give her that. Yeah. Now, the question I have is, did they really dissolve? Right? What does that mean?

 

Meghan Heitkamp 00:05:54  We've talked about this on several episodes before, so if you're not familiar, we've got lots of episodes to look back on. But a non-profit dissolution is not as simple as like taking down the website and calling it a day.

 

Jess Birken 00:06:05  Yeah. So when when the listener says the president just did it all by herself. What does that just mean? She turned off the Facebook page and cancelled the expensive things that were costing her money that she was probably paying for herself. Or does it mean that legally, they went through the statutory process of dissolving in their state and informing the IRS? Maybe, but maybe not.

 

Jess Birken 00:06:30  Nine out of ten times. Most small non-profits don't eat there, aren't even aware that there is this statutory process that they have to follow, and so they just sort of get administratively revoked by their state. The IRS revokes their tax exemption for non filing for three years and they think they're dissolved. So when this person is saying, how do I revive the corporation if they never actually dissolved? It could be as easy as just going online and three clicks of a mouse and you're back in good standing with the state, and then you got to reapply for income tax exemption. But it could be that this organization isn't truly dead. Yeah, if that makes sense.

 

Meghan Heitkamp 00:07:18  Well, and it's even possible they haven't lost their tax exemption because it says in here that it was dissolved a year ago. So we've talked about this on the podcast before too. But you don't lose your tax exemption for not filing one 990. So. Right. It's possible that it is just all there.

 

Jess Birken 00:07:37  Yeah. So for just from like a technical perspective, you can check that you can go to the exempt organization database on the IRS website and pull up the tax ID number or the name and look and see if the organization still has tax exemptions so that Megan's right.

 

Jess Birken 00:07:53  That's one thing. You can go to the whatever it's called in your state here. It's called the secretary of state in Wisconsin. It's like the Department of Financial Institutions or something like whatever your state agency is that forms corporations. You can go look up the registration for this nonprofit. See if it's revival. I don't know if that's a word. And if it is, then you just have this nonprofit zombie that you can reanimate very quickly. I'm like, now my head is just full of like, what would a nonprofit zombie look like? And would it want to eat brains? I don't know.

 

Meghan Heitkamp 00:08:31  Oh, donor brains. I'm trying to donor brains.

 

Jess Birken 00:08:34  Oh, my God, that's dark. Yeah, that is dark.

 

Meghan Heitkamp 00:08:37  It's really dark.

 

Jess Birken 00:08:37  Okay, so let's just say that this the president really, like, followed the statutory process. This thing's absolutely dissolved. How do you revive the corporation? Well, you don't, but you could start a new one. So you could start a brand new corporation and get a new tax ID number, get a new income tax exemption and just start your mission again.

 

Meghan Heitkamp 00:09:01  In theory.

 

Jess Birken 00:09:02  It's doable.

 

Meghan Heitkamp 00:09:02  If it was actually dissolved and nobody else took it. Could they like, restart it with the same name and everything?

 

Jess Birken 00:09:09  Yeah. If the name is available, they could start it with the name. Now, I kind of love that you asked this. I feel like. Do you know where I'm going to go with this?

 

Meghan Heitkamp 00:09:16  No, I didn't because.

 

Jess Birken 00:09:18  Okay. Because I'm like the final layer of this is. But what happens when you bring our charismatic founders mission back from the dead without her?

 

Meghan Heitkamp 00:09:29  True.

 

Jess Birken 00:09:30  What drama poop storm are you starting by taking this founder's big idea and trying to go deliver on it without her? Especially because you and I both know. Oh, I didn't even go very badly.

 

Meghan Heitkamp 00:09:45  Yeah. Especially if if we are correct. And from the president's point of view, it's like everybody else bailed out on this mission. And it was she was left holding the bag to close it down and do the unfun part, and then the rest pop back up at a different time and try to restart it themselves, if that really is the situation.

 

Meghan Heitkamp 00:10:05  Like ouch.

 

Jess Birken 00:10:07  Right. So and you know, depends on how big your town is, how big this community is. What's the mission? Does everybody know everybody? I'm just like, oh, before you do this, just be cognizant of the fact that this could incite a little drama. Not that it should at all, but I've just lived long enough to know that it might.

 

Meghan Heitkamp 00:10:29  Well, this is the thing that I feel like it comes up over and over when I tell people that like, oh, I work at a law firm that works with non-profits, everyone's like, oh, that must be so fun and relaxing. Like, it's not as serious as other kinds of law. And I'm like, oh, absolutely true. like that, it is a different, you know, but the amount of drama that comes because people are really invested in this and have a lot of ownership over their missions or ideals or passions. And so even though, you know, no one owns this like mission area, if someone is feeling like you stole something from them or, you know, there's a lot of personal betrayals that can happen in the nonprofit world and a lot of just drama that comes with it.

 

Jess Birken 00:11:16  Unfortunately, it's because people are trying to leave a legacy. Yeah, and they're very like much investing there. I don't know what I'm trying to say. Like, they're trying to, like, make an impression before they die. And like, this is their stamp on the world. And this is the difference they want to make. And you have to kind of have that desire in order to put up with the amount of work and grinding that it takes to do it right. It's like being an entrepreneur. Like it's a lot harder than just having a job. There's got to be something in you that's like, I want to do this thing. Yeah.

 

Meghan Heitkamp 00:11:57  And it's so much more about your identity. It's not about like, you know, punching a time card or making a widget at work or whatever. It's like, this is a big thing that is about who I am as a person. And if you start stepping on that, you're going to get a lot bigger reactions than normal petty work.

 

Meghan Heitkamp 00:12:16  Dramas of like, Susan at the water cooler is, you know, talking shit about the CFO or whatever. You know, it's just different.

 

Jess Birken 00:12:24  Yeah. So that's just like a little caveat for this listener. Like, just do it mindfully, tread carefully, know that. And people might pop up out of the woodwork and be like, oh, I'm here again. Yeah. And you may not want their help, but they're like, oh, you're doing this. We're back. Yeah. Like. Oh, right. So it's just something to think about.

 

Meghan Heitkamp 00:12:47  Exactly.

 

Jess Birken 00:12:48  Yeah. That's my take on it.

 

Meghan Heitkamp 00:12:49  And I think like, the other thing I just wanted to say was that also great that it's like, sure, sometimes things get set aside and they're not your biggest priority in your life right now and people don't have the bandwidth. This happened with so many of our clients during the pandemic, where it was just like, we can't do this right now, and it is very cool to see people come back around to it and say, okay, I'm ready now.

 

Meghan Heitkamp 00:13:11  Like, we can do this and we can still like make the difference that we want to make. Like that is absolutely an admirable thing. If you can make this work now, even if it didn't work before. But there's a lot going on with that.

 

Jess Birken 00:13:25  Yeah. I just want to make sure I hit their last little question. They just had this last little bit that's like, do we have a leg up on getting C3 status again since we've already done it once and we already talked about like Gojek, like, did you really lose it But not to be like the Debbie Downer, but the IRS doesn't care. Yeah, they don't care. What you know is you had a successful application once, and if you can get your hands on those materials, you can submit probably the same application again and have success. But it also just depends on what IRS agent is reading it and all of the things.

 

Meghan Heitkamp 00:14:01  Yeah, there's no like extra special lever to pull of like we did this one more time.

 

Meghan Heitkamp 00:14:06  Can we just ask nicely and you'll give it to us again? Because you already granted us, like there's no easy way to do that. Yeah, it's.

 

Jess Birken 00:14:13  Just a complete, like, start over again if, if you've lost it.

 

Meghan Heitkamp 00:14:16  Yeah. So and that's true of the organization as a whole. Right. If they did actually dissolve it there is no like oopsie as I take it back. Like let's raise.

 

Jess Birken 00:14:26  Tax ID number.

 

Meghan Heitkamp 00:14:27  Right. Yeah. All of it. You can't just be like, oh yes. We didn't actually mean to put it to bed. Let's revive it. Like that doesn't exist.

 

Jess Birken 00:14:34  If the corporation still exists, it still has a tax ID number. Theoretically, you could do like what's called a retroactive reinstatement. I feel like that's a whole other episode. So you could theoretically get your status back, but you're still basically applying again? Yeah, you're applying again and saying, we had it before. Would you please fill the gaps so that we never had, like a gap or just give it to us again? But functionally you're just applying again?

 

Meghan Heitkamp 00:15:04  The IRS isn't going to make it easy on us.

 

Meghan Heitkamp 00:15:06  Are we surprised?

 

Jess Birken 00:15:07  Nah, they don't care. No, they don't care.

 

Meghan Heitkamp 00:15:09  That's not their job.

 

Jess Birken 00:15:10  That's too hard. It's not that they it's not that they don't want to care. It's just like they don't have the bandwidth to care. No. There's thousands of these things coming through all day long. They don't keep a file on you and your your particular dog rescue and keep tabs on you and like, like your posts on social, like they're just like harried administrators trying to make do with the budget they have.

 

Meghan Heitkamp 00:15:31  And I mean, really, to be fair, if you zoom it out, it's reasonable for them to say, Do you still qualify for this? Why did you lose it? Like, what's going on? Like, you should be able to have to say yes, I still deserve this tax exemption. And it's not like just granted just because at one point you were doing something charitable.

 

Jess Birken 00:15:51  So yeah, they're basically just like, oh well look at that again.

 

Meghan Heitkamp 00:15:54  Yeah, absolutely.

 

Jess Birken 00:15:55  Look at that again. Okay. All right Megan. Well, what do we take away from this?

 

Meghan Heitkamp 00:15:58  I got a couple things. So first, it's just that, like, startup energy doesn't last forever. Like, things get hard, things slow down. Sometimes you have to push, pause or even throw in the towel on an organization. And that's really common. So if this is a period that you're going through or that you anticipate going through, just know that this is not unique and something that almost every small organization is going to have to work through.

 

Jess Birken 00:16:26  Yes. It doesn't make you a bad person or a failure. No.

 

Meghan Heitkamp 00:16:30  The next thing closing down a nonprofit is not like a quick one decision. Turned off the website kind of thing. It takes time. There's a whole process that depends on what state you're in. And so if we are throwing around the word nonprofit dissolution, you've got to make sure that it was actually dissolved and not just decided to stop doing the function. It's stupid.

 

Jess Birken 00:16:51  Abandoned.

 

Meghan Heitkamp 00:16:52  Yes. Yes. Is it a zombie or is it just like a sad, abandoned ghost town? Okay. And then if you did want to restart a nonprofit that, you know was closed down in one way, shape or form, if it was actually dissolved, you gotta start over. You gotta start over with a new organization entity with tax exempt status. If it wasn't, you might be able to reuse some of the work that you had done before. The corporation might still exist. Your tax exemption even might still exist. So you got to look into all of those things before you decide on a path. But ultimately, people in the sector are very passionate about their missions, and it's important when you're doing stuff like this to keep an eye on the people involved as well. Did I miss anything?

 

Jess Birken 00:17:37  No. Those are the things. All right. Absolutely. Nailed it.

 

Meghan Heitkamp 00:17:41  All right.

 

Jess Birken 00:17:41  Folks, folks, if you enjoyed this episode, I really need you to go to the Apple Store and leave us a review.

 

Jess Birken 00:17:48  Okay. People have started listening to the pod. It's great, I love you. Go leave us a five star review. It helps more people find the podcast. Share this episode with a friend, especially if you have someone in your life who's struggling to make a new non-profit go right now. They might need to hear this, that it is okay and it is normal. If you've got a story or a question to share, send me a note online at Charity therapy. Megan and I would love to hear from you.