Restructuring a nonprofit corporation

The only thing of substance that I learned from reading your post is that you have a friend.

I was in a senior leadership role for a very large national not for profit and we established a wholly owned subsidiary to create more focus and independence on unique part of the business that needed to act as more of a start-up. We did not do it because of risk, but we decided it was a more thoughtful approach to creating a successful adjacency to our traditional business model. That said, it did reduce our liability. To what extent, I’m not sure as we had our attorneys handle the details of the process. I do know that we were not a joint employer, which was a critical dimension of our risk management.

When you say 'not a joint employer' - there was a clear line between who worked for which organization? No overlap? I could foresee that the 2nd new organization would potentially need to contract with the original corporation for some admin and/or executive support.

DOES your friend know you are going to the Money Talk board for advice for HIM? If so he has no business running a non profit and if not you may be losing said friend if he finds out. And if the Board finds out He is going to lose his job.