Welcome to our basic document Scavenger Hunt! In this section we will ask you to find existing documents and policies your board of directors should have. If your board gives you a policy book at the start of your term or on an annual basis – awesome. If not, this is a great chance to find the following documents and policies and begin to compile a universal resource for your board and leadership staff.
Today’s document on the Scavenger Hunt are your organization’s bylaws. Bylaws are created when an organization is established and are required by both state and federal institutions for all nonprofit organizations.
The legal stuff
Every state has provisions on what must be included in an organization’s bylaws, that is why it is important to check with your Secretary of State or Attorney General’s office to ensure compliance. In addition, whenever bylaws are amended (and they should be at least every two years) it is a good idea to have a lawyer familiar with nonprofits review them. If major changes are made to the bylaws you will need to resubmit them with your IRS 990.
Need to check your state’s rules and regs? Below is a very helpful link.
What are bylaws?
Bylaws are a living, breathing document that sets the rules and regulations for how your organization is governed, laying out how you will operate. Bylaws should accurately reflect how your organization works, making sure your policies match your practices. Because common practice can change over the lifetime of your organization, it is important to regularly update your bylaws. It is best if you have a bylaw committee that sits down at least every two years to update and amend the document. When bylaws are amended, the changes should be marked and the date they were approved recorded. Simply putting a running tally of updates somewhere on the document will suffice.
Example:
Updated on: April 2020/March 2018/May 2016
Bylaws define:
- The size of your board
- Rules and procedures for holding meetings
- Need to announce meeting date(s)
- What makes a quorum
- What ratio is an approved vote
- Annual meeting rules
- How the board functions
- Roles and duties of board members and officers
- Rules and procedures for holding board member elections and appointment of officers
- Conflict of Interest (COI) policy
- How COI will be handled
- Other essential corporate governance matters
It is important to realize that bylaws are as unique as the organization of which you are a part. There are standard items that are required across all bylaws, but your bylaws need to match your mission, goals for governance, operational needs, etc. Bylaws should only include relevant rules governing the organization, meaning that you look at policies and procedures that are relatively static and do not include details that can change often (for example, fundraising plans).
A few last points
Know the difference between “shall” and “may”
- Shall – required
- May – optional
Be realistic
- An organization’s bylaws are your standard operating procedures so be realistic about what you are requiring your board (and future boards) to do. SMART goals don’t just apply when planning, they apply to your bylaws as well.
More reading:
- https://www.venable.com/insights/publications/2013/10/the-15-most-common-nonprofit-bylaw-pitfalls-how-to
- https://donorbox.org/nonprofit-blog/nonprofit-bylaws-made-easy/
- https://www.irs.gov/pub/irs-pdf/p4221pc.pdf
- https://boardsource.org/resources/bylaws/
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