Nonprofits decide to change their names for lots of different reasons. Perhaps the old name no longer reflects the core mission or values of an evolving organization. Or perhaps the old name has lost its luster as a brand. Whatever the reason, there are important steps that a nonprofit must take as it prepares to change its name and afterward.
Preparing for a name change
Before taking the formal steps to change a nonprofit’s name there can be a number of important preliminary stages to consider. The specific steps an organization must take depend on its governance structure and other factors. Generally speaking the steps can be narrowed down into a few categories:
- Take time to brainstorm. Even if a certain name is the clear “best” choice from the start, being thorough about exploring alternatives is a good practice. It not only gives the organization a chance to discover an even better name, it also prepares for the possibility that the preferred name isn’t available or fails for other reasons, such as trademark.
- Verify availability. Before a name can be adopted it has to be available within the state’s registry of business names. If another organization has adopted a name that’s too similar to the one the organization chooses, the state will reject it. Verifying availability is a fairly straightforward process.
- Consider trademark issues. Trademark conflicts can pose a serious hurdle for a naming process. Infringing on another organization’s trademark can force the nonprofit to choose another name. An attorney can help the organization identify appropriate strategies for screening the new name for trademark problems.
- Management and membership approval. Before changing the organization’s name it is essential that directors, managers, and voting members approve of the change in accordance with the organization’s governing documents. Beyond legal documentation requirements, unanimity among the leadership group is key to ensuring that the new name gets rolled out with enthusiasm and energy.
Formally changing the organization’s name, and afterward
The formalities required to change a nonprofit’s name will depend on the type of organization it is. For example, a California nonprofit corporation submits to the Secretary of State an amendment to its articles of incorporation. Other government agencies will also need to be notified of the change. Notices probably will need to be filed with the local county, the California Attorney General’s Registry of Charitable Trusts, the Franchise Tax Board, and the IRS, among others. Note that a properly documented name change shouldn’t trigger any changes to the organization’s tax status.
In addition to these formal necessities the organization also needs to let its stakeholders know about the change. Planning for this process should be done before the name is changed. There are a few important things to keep in mind about this process:
- Contracts. Notify counterparties to any current contracts the nonprofit has that the name has changed. The contracts themselves don’t need to be amended in any way, but they may require formal written notices to comply with their terms.
- Banking. The nonprofit’s bank accounts will need to reflect the new name. Banks will need to see copies of the formal government filings that effected the change.
- Branding. Perhaps the most important element in a name change is how the new name gets presented to the nonprofit’s constituents. A plan should be devised to ensure that the change gets announced in effective ways on social media, in the press, and directly (by mail, using flyers, and so on) so that everyone connected with the nonprofit learns about the change.
The Church Law Center of California helps with name changes
The Church Law Center of California provides legal counsel to religious and secular nonprofits. We assist clients with all aspects of nonprofit governance, including name changes. If your organization could use assistance with getting its name changed, call us at (949) 689-0437 or reach out to us through our contact page.