Make sure your nonprofit’s bylaws are on pointFebruary 22, 2017
Bylaws are the rules and principles that define your not-for-profit’s governing structure. Your board and staff need to be familiar with exactly what the bylaws contain — and what they don’t. If they’re incomplete or don’t reflect the organization’s current mission, revising them is critical.
What do they contain?
Your bylaws might cover such topics as the:
- Broad charitable purpose of your organization,
- Size and function of your board,
- Election, terms and duties of directors and officers, and
- Basic rules for voting, holding meetings, electing directors and appointing officers.
Without being too specific, your bylaws also should provide procedures for resolving internal disputes, such as the removal and replacement of a board member. If you’re not familiar with the bylaws, you should get up to speed fast.
How are bylaws changed?
If you want to change your organization’s bylaws, first make sure you have the authority to do so. Most bylaws contain an amendment paragraph that defines the procedures for changing them. Then consider creating a bylaw committee made up of a cross-section of your membership or constituency. This committee will be responsible for reviewing existing bylaws and recommending revisions to your board or members for a full vote.
Your bylaw committee needs to focus on your nonprofit’s mission, not its organizational politics. A bylaw change is appropriate only if you want to change your nonprofit’s governing structure, not its operating procedures.
What else should be considered?
If your nonprofit is incorporated, ensure that any proposed bylaw changes conform to your articles of incorporation. For example, the “purposes” clause in your bylaws must match that in your articles of incorporation. Any new provision or language changes in your bylaws contrary to the objectives and ideals included in your incorporation documents may invalidate the revisions.
Bylaw provisions that suggest you’ve strayed from your original mission also can jeopardize your federal tax-exempt status. Make sure your bylaw amendments are consistent with your tax-exempt purpose. If they represent a “structural or operational” change, report the amendments on your Form 990.
Although bylaws aren’t required to be public, consider making up-to-date bylaws publicly available to boost your organization’s accountability and transparency. Contact us for more information.
Upcoming EventsApril 7, 2020
Howard Hoff, Partner in Charge of the Commercial Business Group, will be a panelist for the live jewelry industry roundtable webinar, “Navigating the New Financial, Legal and HR Landscape,” presented by The Plum Club.
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