Every church needs governing documents that define the organization’s scope and determine how it is run. Whether the church is organized as a religious nonprofit corporation or as a nonprofit association, a charter, bylaws, and other guiding documents are necessary for a wide variety of reasons, from basic operations to establishing proper tax treatment, managing assets, and controlling liability. As a church grows and evolves, it’s normal to need to make changes to governing documents.
There are some general steps that apply to each case:
- Take stock of existing documents. Many organizations, including churches, make the mistake of losing sight of their governing documents and discover conflicts only after they’ve become a real problem. Treating documents as living, breathing things is a helpful way to ensure that issues can be addressed. Doing so as a director is also an important part of satisfying one’s fiduciary obligations to the church. When changes do need to be made, it’s a good idea to review the entire document for any other improvements that could be made at the same time.
- Understand technical requirements. A particular governing document, like an incorporated church’s bylaws, typically will have a prescribed process for making amendments. In addition to these rules, changes to a particular document may be subject to state law or the rules of a church’s parent organization, if applicable.
- Reach a consensus. Following the church’s governing rules, the board or other leadership group should discuss why changes need to be made and proposals for new language. An attorney’s help is often necessary to ensure that proposed changes won’t create other problems.
- Document approvals. Regardless of how a church is organized it’s important that the leadership group’s approval of changes to its governing documents be memorialized in writing, either with meeting minutes or, if permitted, by a written consent. Certain types of documents, like corporate charters, may need to be submitted to the state before they will take effect.
- Notify applicable parties. If the church has relationships with outside organizations that rely on its governing documents, they will need to be provided with the updated versions. Banks are a common example of organizations that routinely refer to client governing documents to verify that formalities are satisfied.
The Church Law Center of California counsels churches and secular nonprofits on matters of governance and organization. We can help your church update its governing documents to meet its current and future operating needs. Call us today at (949) 689-0437 or through our contact page.