Nonprofit Bylaws

Non-profit organizations can live and die by their bylaws. It is important to ensure that these bylaws reflect the organization and keep it out of legal troubles. Learn more...

Non-profit organizations can live and die by their bylaws. It is important to ensure that these bylaws reflect the organization and keep it out of legal troubles.

Bylaws govern all non-profit organizations. The bylaws direct their meetings, the topics of their meetings, and how to conduct their board meetings. Bylaws set the foundation for the policies and procedures of the organization. Webster's Ninth New Collegiate Dictionary says: "Bylaws are the rules adopted by an organization chiefly for the government of its members and the regulation of its affairs."

There is understandably a resistance to wholesale changes in bylaws because of the importance of continuity and tradition to a nonprofit organization. Nonetheless, few organizations can afford to remain static over the years and often find themselves with different needs than they had at their founding.

It is important that nonprofit organizations have bylaws that are responsive to the organization's constiuents and its needs. Organizations that never review their bylaws sometimes end up burdened with antiquated bylaws that no longer reflect the organization's mission, needs, or direction.

As nonprofit organizations' board members blow the dust off old bylaws and attempt to alter them to meet the changing requirements of the organization, they face a delicate task of making sure that any alterations stay in line with their mission and protect the organization from future difficulties. They also must make certain that by meeting their current needs, they do not ignore their long-term challenges.

Age alone does not make a document outdated. After all, the United States itself relies strongly on a document written in the 18th century-the U.S. Constitution. And that document is not only relevant, but is found to be continually robust. However, event he U.S. Constitution has not been completely resistant to change. Over the years, 27 amendments have shaped the Constititution to keep pace with our changing society.

Some common reasons private clubs change their bylaws include:

· Change in constituent demands

· Change in organization mission

· Change in organization operation

· Response to specific situations

· Practices that need documenting

· Change in social or legal environment

Change in constituent demands

One of the most important reasons to change bylaws is that the organization's stakeholders see a need for change. The bylaws must remain responsive to the changing demands of the people it serves.

Change in organization mission

The mission is the organization's guiding beacon. However, the beacon can waver or even cast its light in a new direction upon occasion. When an organization changes its mission, the bylaws must change to stay on course with that mission.

Sometimes the organization's mission is contained in its charter or its articles of incorporation. It is a very weighty matter to change an organization's charter. This move requires wide-spread support and possibly consultations with state licensing agencies. A change in charter or articles of incorporation could affect the organization's non-profit status. However, charters do change and so do the bylaws that support the charter.



Also, organizations that engage in strategic long-range planning may find that their bylaws must change to stay in harmony with the new directions.

Change in organization operation.

Every governing body seeks to operate in a manner that reaps the greatest benefit for the people it serves. To do this, the body must frequently re-evaluate the rules by which it governs. These operating issues make up the bulk of most bylaws.

Operating issues that may result in bylaw changes can be divided into those that affect:

· Organization governance and meeting procedures

· Standing committees

· Indemnification of officers

Response to specific situations.

No nonprofit board can foresee every situation that must be addressed in its bylaws. Each organization will have its unique problems and challenges. When solutions to new problems are found, some organizations will wish to codify the solution to make things flow more efficiently in the future.

Common changes that arise in response to specific situations include:

· Annual meeting time and procedures

· Resignations

· Definitions of constiuents served

Some organizations find themselves with bylaws over the decades that have become updated. The bylaws may no longer be feasible to enforce as written. There may be references to machines that no longer exist or procedures that are no longer relevant.

Practices that need documenting.

Every organization constantly searches for better ways to accomplish its tasks. The organization may grow and subsequently change the way it operates. Nonprofit organizations may find that they have adopted certain processes and practices or have formed long-standing committees that have never been documented. Any time a process, committee, or practice has lasted for many years, an organization may decide to document it.

Change in social or legal environment.

Nonprofit organizations frequently are part of the political and legal maelstroms that swirl through their communities. Even if they try to isolate themselves, they may find themselves caught up in the storms of controversy surrounding the issues they care most about. At best, organizations are able to weather those storms with little change. Others find themselves forced to painfully rebuild after negative publicity. Still other organizations are proactive and set up storm walls and shutter their windows before a hurricane strikes. These proactive organizations establish procedures and policies to deal with the media or other outside influences.

Boards and bylaw committees must carefully consider the legal ramifications of a proposed bylaw. The organization must be careful to safeguard its nonprofit status. It must carefully evaluate each bylaw making sure they are clean and don't violate federal, state, or local regulations. Likewise, bylaws must be carefully worded to minimize liability. Courts will expect organizations to live up to the standards of their bylaws. Clubs that do not do this open themselves to civil lawsuits.

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