Whether you want to protect the environment, rescue animals, or transform education in your community, your nonprofit has big goals. While fundraising strategies like recurring gifts and effective donor communication help you generate mission-critical revenue, there’s a fundamental step that determines how you’ll achieve your ambitions—writing nonprofit bylaws.
Whether you are starting a new nonprofit or revisiting your current bylaws, a well-structured framework that supports your mission is the key to success. Let’s review the essential guidelines every nonprofit should follow when writing their bylaws.
1. Prioritize core governance principles.
According to Foundation Group, bylaws are an organization’s “operating rules,” which guide internal operations and define governance. In other words, your bylaws are like a constitution for your nonprofit, setting out the core structure and guiding principles your organization will follow.
To provide a clear framework, bylaws must focus on high-level governance issues. Instead of micromanaging day-to-day operations, bylaws should remain flexible and adaptable by concentrating on core governance principles, such as:
- Organizational purpose: Write out your nonprofit’s charitable purpose, which should align with one of the 14 exempt purposes defined in IRS code 501(c)(3).
- Board structure: Specify the number of board members, term limits, required qualifications, and powers of the board. Also, outline procedures for board member succession and removal.
- Meeting requirements and voting rights: Determine the types and frequency of board meetings, the quorum required, and the number of votes needed to pass an initiative.
- Membership provisions: Define membership eligibility, tiers, and termination policies, if applicable to your organization.
Remember to include a provision for amending your bylaws in the future. This provision should identify who can approve amendments and what percentage of a vote is needed to pass them.
2. Educate your board on key provisions.
Board members who are well-versed in your bylaws are better equipped to make mission-aligned decisions for your nonprofit. Not to mention, board members are legally accountable for following these provisions.
The consequences of failing to follow your nonprofit’s bylaws range from misaligned leadership to fines (and even litigation in the most severe cases). That’s why it’s crucial for board members to familiarize themselves with your bylaws.
Just as you’d provide training for new software implementation or volunteer responsibilities, your nonprofit should also educate its board members on essential provisions by:
- Introducing bylaws during orientation: Provide a copy of your bylaws to each new board member upon their installation at your nonprofit.
- Provide ongoing support to answer questions: Make it easy for members to receive answers to their questions about bylaws and their implications.
- Encouraging periodic bylaw review: At a minimum, all board members should revisit your bylaws annually.
Ongoing review and transparency about your nonprofit’s governance is critical to ensure that every board member is on the same page. Check in with board members frequently and promote easily accessible channels for answering their questions. Additionally, look for opportunities to gather their feedback and implement suggestions they may have.
3. Ensure bylaws remain relevant and adaptable.
Is your nonprofit steadily recruiting new team members? Has your organization been impacted by industry-specific regulations or other changes? Between internal growth and evolving legal standards, your nonprofit’s bylaws are bound to change.
To keep your bylaws relevant, strike the appropriate balance between definitive and flexible. They should lay out governing principles clearly while staying adaptable as times and circumstances change.
Incorporate flexible language into your bylaws to anticipate future revisions. Here are some examples of adaptable wording:
- “The board shall consist of at least 10 members, with the option to expand as deemed necessary by the board.”
- “Board members will serve terms of three years, with options for reappointment at the board’s discretion.”
- “The board shall hold at least one meeting per quarter, or more frequently as required by the organization’s activities.”
If you’re having trouble determining how to make a provision more flexible, consider its long-term implications. Ask yourself, “How many board members will we need five years from now?” Or, “Will a quarterly board meeting suffice when we’ve refined our donor outreach strategy and significantly expanded our supporter base?”
The reality is that no nonprofit knows for sure where they’ll be in the next few years. Perhaps your nonprofit will develop new committees upon expanding its programs and services. Or, a boom in donor activity may result in more funds flowing in and out of your nonprofit, necessitating more frequent board meetings to ensure donors are adequately stewarded and thanked. Using flexible language and including a provision for bylaw amendments will make it easy to adapt your documents as necessary.
4. Seek professional legal guidance.
Bylaws are legal documents, and their provisions should be treated with the seriousness of a legally binding contract. To ensure they’re useful for your organization and compliant with applicable state regulations, work with a professional experienced in nonprofit law.
Only a knowledgeable nonprofit expert knows the regulations surrounding bylaws for 501(c)(3) organizations. Not to mention, bylaws may vary depending on your industry or mission, meaning a generic template won’t suffice to determine your nonprofit’s unique governing structure.
For example, while a traditional nonprofit may appoint a board of directors to lead, a church might instead be elder-led. When navigating church incorporation, the church’s leaders need a professional’s guidance to establish the necessary provisions.
These nuances cause bylaws to vary greatly, meaning an expert with specialized knowledge in nonprofit compliance is your best bet when drafting your governing documents. Remember that your board is still responsible for voting to adopt these bylaws—professional guidance will simply help you refine the final draft.
Effective bylaws are the key to strong nonprofit governance, providing a guidebook to support board members in performing their roles. After all, eCardWidget states that board members dedicate around 360 hours of valuable work to your nonprofit. Ensuring they have a smooth experience during their terms is not only beneficial from a legal standpoint—it’s the right thing to do.
