The bylaws of a nonprofit organization are a legally binding document that dictates how board members or directors must operate the organization. Therefore, failing to follow the bylaws can adversely affect the organization and the board. As a result, you should be extremely cautious about the provisions that your nonprofit organization’s bylaws contain and ensure that your board has voted to approve any changes.
If your nonprofit needs assistance drafting or reviewing your bylaws, you should contact an experienced nonprofit organization lawyer today. Call the offices of the Church Law Center at (949) 892-1221 or contact us online for more information today.
While some provisions are crucial components of effective bylaws for nonprofit organizations, others should not be included as bylaws. Here are some examples of provisions that nonprofit organizations should avoid including in their bylaws.
Organizational Policies and Procedures
Your bylaws are not an employee handbook or policy manual designed to run the day-to-day operations of your nonprofit organization. For example, employee absences, vacation policies, and no-smoking policies have no place in an organization’s bylaws. Those issues are better suited for personnel manuals for use by human resource professionals rather than board members.
Specifically Targeted Policies that Adversely Affect Future Boards
You may enact certain policies or procedures because it benefits your current board or is appropriate at the time, under the circumstances. However, before you do so, you should think about the potential consequences of that policy or procedure on future boards. For instance, suppose that you enact a bylaw that requires a super-majority of the board to make even the smallest change in the bylaws. Will the policy allow the organization to make appropriate changes and developments as needed in the future, or will it tie the board’s hands and keep the organization unable to make necessary changes at the behest of a single board member?
Provisions that Violate State Laws
Your bylaws should not contradict or violate state laws. For instance, Cal. Corp. Code §5211 states that each director has one vote, and no director may vote by proxy. Therefore, your organization’s bylaws may not state that each or any director has more than one vote or that any or all directors may vote by proxy. These bylaws would directly violate state law and thus are invalid.
Inconsistencies with the Articles of Incorporation
The Articles of Incorporation of a nonprofit organization are controlling over the bylaws. Therefore, the two documents must be consistent. Most importantly, the purpose of the organization stated in the bylaws should be the same as stated in the Articles of Incorporation if it is included in the bylaws. Maintaining this consistency of purpose is also critical to maintaining a nonprofit organization’s 501(c)(3) tax-exempt status.
Making Bylaws Too Inflexible
While some bylaw provisions must be specific, other provisions should be open-ended enough to remain flexible to meet the needs of the board and the organization. For instance, a bylaw stating that a board meeting should be held on the third Wednesday of every month at 6:00 p.m. is likely too specific and inflexible. Instead, it is likely sufficient for the bylaws to state that a board meeting should be held at least once per month, quarterly, or annually. This type of bylaw allows the board members to determine the frequency, date, and time of their meetings, subject to any notice requirements.
Incorporating Robert’s Rules of Order
Many nonprofit corporations that follow a template or “borrow” another organization’s bylaws will incorporate Robert’s Rules of Order, Newly Revised, to determine how to operate their board meetings. The fact is that Robert’s Rules consist of over 600 pages of rules. By incorporating them by reference into your bylaws, you expect your directors to know, understand, and implement those rules, which is overly burdensome and likely highly unnecessary. Plus, if you fail to follow every detail of Robert’s Rules during your meetings, you open yourself up to legal challenges if a dispute arises over board actions.
Call Church Law Center Today
Don’t hesitate to contact an experienced nonprofit attorney at Church Law Center when you need assistance with legal issues related to your California church, religious organization, or nonprofit organization. You can reach our offices by calling (949) 892-1221 or contacting us online to learn more about how we can help. We offer a wealth of experience handling the unique legal issues that nonprofit and religious organizations routinely face.