Keeping your bylaws up to date is a critical, strategic task. But it often gets pushed down to Priority #93 and ignored totally in the press of daily business. Many people feel that they don’t understand their bylaws at all, so they avoid even looking at them. They may also believe that in order to make the bylaws “right,” a lawyer — and all that attendant cost — is required.

Simply put, the bylaws are a system for governing the internal affairs of an organization. They are a living document that grows with the organization and prescribes its functions and limits. While bylaws cover a pretty standard collection of topics, the specific rules are particular to each organization and reflect its mission and values.

For example: a quorum is the portion of a voting body that must be present to conduct the business of an organization. The definition of that portion is a standard part of all sets of bylaws. But did you know that the actual percentage is not standard?

The U.S. Constitution, the bylaws of the United States, sets out the legislature’s quorum in Article 1, Section 5 … “a majority of each [house] shall constitute a quorum to do business.” That means at least 51 senators, a simple majority out of 100.

But if your organization is new or small and you’re relying on the board’s input to make most of the decisions, then perhaps you might decide that 3/5 or even 75% of voting members must be present. All of these choices are legal. But the one that’s right for your group might not be right for mine.

When it’s time to review your bylaws, start by making a list of the changes that have been proposed or that are simply being talked about. For example, maybe term limits are being discussed as a way to get new blood onto your board. Write down why you think these changes are needed. What other systems or structures of the organization will be affected by this change?

In my experience bylaws are rarely light reading, but they are in English. Plan enough time to read and digest them. Look for the sections with which your new plans might intersect. Talk with other people about what is in the best interest of the organization. Finally, draft the changes and prepare for the voting process for their adoption.

About the author:
K. Kerchner McConlogue, CPCC, PCC is a Baltimore-based coach in private practice who also works to map the future of organizations. For more information about how to update your bylaws go to www.fixmybylaws.com.

(c) 2006 K. Kerchner McConlogue, CPCC, PCC

Sometimes the rules need to be revised. Things change. Opportunities and threats present and must be addressed. It’s like adjusting the family rules to make them appropriate for your good-kid who just got his driver’s license. Those old rules about not crossing the street without holding a grown-up’s hand just don’t make sense any more.

Asking the what-if questions

When you’re writing the bylaws you have to ask all kinds of what-if questions. No one expects anything bad to happen. You don’t, pre birth, plan for what to do when bad kids encourage your baby to take drugs or steal a car. But in the early days of an organization, somebody has to ask, “What will you do if you have a board member who never comes to meetings?” or “What will you do if the organization fails?” You surely can’t plan for everything, but you should plan for some things.

In new groups, a dedicated group of people, who were committed to the ideals, vision, and purpose of the organization, get together to really think ahead about how they want things to work. It is like participating in the birthing of a baby – decorating the nursery, naming the child, thinking about what rules they’d like to have when the kid goes to school or wants to quit. It’s all about the grand vision for the future. Everything is possible.

Reread and rewrite

Then every couple of years you have to reread the document and consider it in the current state of the organization. Here again you have to ask questions about how your rules are working for you and find where they might be improved.

Kerch – I just bought your book and look forward to working through it. I have a question. Are you aware of new rules that require nonprofits to have a privacy promise and/or a conflict of interest agreement incorporated in the bylaws?

Thanks for buying the book..and thanks for the question.

I am not aware of any new rules about conflict of interest policy on the federal level. However, your state may have them. You should check with a local attorney.

Or you could write the policy and include in your bylaws that the policy must be signed by board members annually or at the start of their term.. or what ever you choose.

According to the fed website this morning, the “policy” itself is not required to be part of the bylaws.

Line 5a.     A “conflict of interest”   arises when a person in a position of authority over an organization, such as a director, officer, or manager, may benefit personally from a decision he or she could make. A Sample Conflict of Interest Policy   is included as Appendix A.

Adoption of a conflict of interest policy is not required to obtain tax-exempt status. However, by adopting the sample policy or a similar policy, you will be choosing to put in place procedures that will help you avoid the possibility that those in positions of authority over you may receive an inappropriate benefit.

Good luck with your project. And if you have any other questions, please holler.

It’s probably obvious that volunteers give more money to the nonprofits they support than outsiders. And that’s also  likely an overlooked fact in the fund raising campaigns of (at least) new or small organizations.

But more interesting to me is this:

Nearly 60 percent of survey respondents said they think charities are too much like big businesses. Roughly one half said that charities are disorganized.

OK. I say, nonprofits have to run like business or else they’ll go out of business… and then who will carry on the mission?

However, that second part about charities being disorganized… that’s a problem on many levels.

Disorganized organizations waste resources, including not only time but also talents and treasures.

A current and effective set of bylaws and a policies and procedures manual (or heck, even just a notebook) will make the organization run more smoothly.  This will impress (and keep interested) your current board and volunteers and make it rewarding for new people to get involved.

When was the last time your organization looked at either of these documents?  Has any one not on the board ever asked to see them? How hard would it be for people in your office or on your board to access them in order to show them or to use them themselves?

The availability of your bylaws, at least, indicates some measure of organization. Post them on your website, then not only can your board use them easily, but your supporters can see how you spend your time and their money.  Make it easy enough to find them and to read them, and maybe some people will.

Write your bylaws in plain English. Check out my book, Fix My Bylaws, to find out how easy that can be.

Same goes for bylaws of your nonprofit organization.

You need enough structure in your bylaws to enable to organization to function well, but not so much as to hamstring its work.

If you leave something out of the bylaws:

• It might be interpreted to mean that the thing is not necessary.
• It might also mean that the board does not have the power to do that thing.
• It might mean that there is no reason not to do the thing.
• Or it might introduce ambiguities.

For example, what would happen if you  leave out any mention of hiring staff?

• Does that imply that your organization doesn’t need it?
• Or that the board may not hire staff?
• If there’s nothing to say they can’t hire someone, then maybe the board will just decide to do it.
• And then, perhaps, the hiring will be challenged as outside the scope of the board’s role.

For another example, what if we’re talking about dues or fees?  Or new committees?

You can’t plan for every single condition. So think about how you want the organization to run. Consider the plans from the positive.

Be clear about what your organization wants and needs.

How much detail is enough?

Some flexibility is essential.

In my opinion, if every step in a process is spelled out, it must either be central to your mission and, therefore, important to include or … probably not necessary.

Put necessary and detailed rules for the day-to-day running of the organization  in a policies and procedures manual.

Condo Officers Can’t Pay Themselves Fees if Bylaws Forbid It by Benny L. Kass

In my opinion, to allow board members to be compensated for their service will open the door to owners who only want to serve for the money, and not for the best interests of the association.

Overall, membership on the board of a nonprofit organization is considered as a voluntary commitment. The federal Volunteer Protection Act of 1997 (42 USC §14505(6)) that defines “volunteer” as:

an individual performing services for a nonprofit organization or a governmental entity who does not receive—

1. compensation (other than reasonable reimbursement or allowance for expenses actually incurred); or
2. any other thing of value in lieu of compensation, in excess of $500 per year, and such term includes a volunteer serving as a director, officer, trustee, or direct service volunteer.

This means board members may not receive any special allowances where the general members would be expected to participate differently. This include: no free conference registration, free advertising or free membership when regular members of the organization have to pay.

And, perhaps most importantly, paid board membership is generally frowned upon by funders.

Board members are, however,  typically reimbursed for reasonable incurred expenses to attend required meetings.

There may be laws about this in your state. If you are considering paying board members for service. Check with the agency that regulates nonprofits in the home state of your corporation. That information is available on line at the IRS web site here.

What’s that have to do with bylaws?

My daughter had played the game the day before with friends who were intent on figuring it out. She said they had to keep rereading the instructions to figure out how to play. And it took them about two hours.  No doubt there were probably side conversations about the merits of the game in addition to the rules that helped stretch it out. Nevertheless, it took a long time.

When she explained and reread the instructions for us, it went a little faster and she was a little more clear about what was supposed to happen.

We were playing that game for fun on a rainy Sunday afternoon. Imagine if you were trying to decide on the next program of your nonprofit organization.  That could be a problem.

If no one knows the rules, the board spends time every time deciding how to decide. What a waste of resources! On top of that, if one person thinks he/she knows the rules, then you can make bad decisions based on inaccurate information. This is also a recipe for problems.

Board members should read and understand the bylaws. And all members of the organization should have access to the currently approved set. But it’s human nature to avoid tasks that might be onerous or complicated. Bylaws would seem to be both. The best defense for this problem is to make the bylaws as easy to read as possible. Bylaws written in plain English as much as possible are more likely to be read, understood and used by the people in your organization who need to understand and use them.

And, perhaps worse, sometimes people spend too much time trying to figure out the rules of running a meeting instead of doing the actual work of the organization.

You might want to consider a different structure.
Check out the book Breaking Robert’s Rules: The New Way to Run Your Meeting, Build Consensus, and Get Results by Susskind and Cruikshank (Oxford University Press, 2006) for an alternative method of running meetings. Their “Consensus Building Approach” works especially well for organizations that are less formally run and more committed to humanizing their work.

Consensus does not mean that everyone always has to agree, but rather that the group makes a decision that everyone can live with.

In addition, it allows the minority of members to have their voices heard during the process. This leads to unification better than having a vocal and dissatisfied minority.

It’s possible that some stuff may be slightly out of date, but at least it tells you where to look in your state.

Check out this book by Mark Warda, titled, simply enough, How to Form a Nonprofit Corporation

According to California law, a  digital signature must have all of the following in order to be legal:

Number 3 speaks to a general peeve of mine about email accounts. I have a number of friends who share their email account with a spouse.  So I’m never quite sure who will read what I wrote or who has answered my note. And because I’m talking about actual friends here, it does make it difficult to decide just what kind of personal griping is reasonable.

It’s not like you need to invest big money for an email account. There are plenty of free options: yahoo.com and gmail come to mind instantly.

So if you must be the only one with access to the account in order for the digital headers to count as legal… well, that’s just one more reason to have your own account.

But how does the data remain unchanged?

I’m not sure how to manage this requirement. Probably the safest way is to send email votes to an account set up specifically for  the organization. Then the original info can’t be changed (at least by normal people without special skills!) Use tags or folders to store the replies.