How to Write Successful Nonprofit Bylaws
If you’re looking to establish nonprofit bylaws or contemplating updating the ones you already have, you’ve come to the right place.
Just as your vehicle comes with an operating manual, your nonprofit deserves to have solid bylaws, which are the skeleton upon which the body of any nonprofit organization is framed.
In this article, we’ll look at what bylaws are and why they are a necessity for any nonprofit, learn insider tips about how to write exceptional bylaws, and get inspired by some of the best bylaws samples around.
Let’s learn more.
What are Nonprofit Bylaws?
Successful nonprofit bylaws codify the basic assumptions of how an organization should operate. They provide an operative and protective shield around your nonprofit’s operations, help prevent mission drift, and indemnify the board of directors from legal harm.
Some states, such as California, require nonprofit bylaws. Be sure to check with your Secretary of State to make sure your organization is adhering to the appropriate legal requirements.
Even if you’re in a state that doesn’t require bylaws, your nonprofit will benefit from having them. Without bylaws, you’ll run the risk of:
- Having rogue board members
- Term–unlimited board members who serve for decades
Nonprofit bylaws not only help keep an organization transparent, but they also help create trust with donors and other constituents.
Good nonprofit bylaws should include:
- Name of the organization
- Purpose of the organization
- Number of and terms of the board
- Description of the executive committee
- Relationship of the board and the executive directors
- Description of the organization’s subsidiaries and their relationship to the parent entity
- Indemnification of board
- How to discipline or remove board members
- Number of board meetings per year
- How board committees are formed and disbanded
- Conflict of interest statement or policy
- How to amend the bylaws if needed
Why Are Nonprofit Bylaws Necessary?
Writing successful nonprofit bylaws are vital to a healthy nonprofit for two main reasons: resolving board disputes and helping to ensure legal compliance.
Resolving Board Disputes
Well-written bylaws can help resolve issues between board members. Without bylaws, you may find your board deadlocked in a dispute. With bylaws, you have an important document you can reference and refer to resolve such disputes. And, if for some reason your nonprofit is in a legal dispute, a judge will abide by what your bylaws have to say.
Bylaws also help your nonprofit to stay in compliance with your state’s laws, federal laws, and the IRS.
If you operate overseas or in multiple states, you may want to opt to hire a registration company or an attorney to write or revise your bylaws. Remember, not all attorneys truly understand the nonprofit world, so proceed with care.
But, if you’re a smaller entity, you can certainly draft the bylaws—or amendments to them—by yourself before presenting them to the board. Remember: if you do amend your bylaws, you’ll have to inform the IRS, as well as your Secretary of State.
Every state has different requirements, so part of your responsibility—and the board’s— should be to stay abreast of those regulations.
How to Write Nonprofit Bylaws
Every set of nonprofit bylaws covers specific topics designed to protect your organization and your board, clear up potential disputes, and fully state the purpose of your organization. Here are some nonprofit bylaw guidelines.
Define Your Organization
Begin your bylaws by including details about your nonprofit–its name, its purpose, and the address where all corporate documents are stored.
Protect Your Board and Nonprofit
To protect your nonprofit, as well as each of your board members, you need to include an indemnification clause in your nonprofit bylaws. This will limit your organization’s liability, as well as the personal liability of the board should a lawsuit occur.
Define the Number of Board Members
We recommend an odd number of board members to ensure that votes are never evenly split. We’ve seen boards as small as two–not a good look, especially when the executive director is one of them.
Most average-sized nonprofits agree that between nine and 15 board members is a good, manageable number. Smaller nonprofits could have five to seven, and very large nonprofits can have more than 15. Be sure that any former members or honorary members of your board aren’t included in this count since they don’t have voting rights.
Determine Board Term Limits
Have you ever seen a nonprofit board with unlimited terms? We have. Do your organization a favor and suggest term limits of about three years—any longer than that and you’ll find formerly active board members burning out or resigning.
Most nonprofits also include the amount of time a board member must wait before reconsideration of their role. It’s reasonable to say one term of three years, and then a year off before re-upping. Stagger the board’s terms so you can build a pipeline of potential candidates for future vacancies.
Define Who Makes Up the Executive Committee and their Duties
The four positions typically making up the Executive Committee are the Board Chair, the Vice-Chair, the Secretary, and the Treasurer. Care should be taken so the executive committee can’t pass a motion without a majority vote of the board. Rather, they can make recommendations for the board to take up during the next meeting.
Determine How Board Members Can be Removed
This is a very important procedure to include in your nonprofit bylaws. It allows the board to shed “dead wood”, as well as members who become too powerful or are stirring up trouble. Very often, nonprofits will opt to place the proposed removal on a written agenda 10 days to two weeks ahead of the board meeting.
Define a Quorum
Robert’s Rules of Order, that cherished document of parliamentary procedures, defines a quorum as the minimum number of voting board members who must be present at a meeting where a matter is up for a vote. Who are the board members you can depend on showing up reliably? That number is a good place to start defining a quorum for your nonprofit.
Note: The size of a quorum may need to be changed if your nonprofit experiences significant growth. Also, many states specify the minimum ratio for a quorum. Check with your state’s Secretary of State.
Include Details About the Executive Director
Strange as it may seem, far too many nonprofit executive directors don’t receive an annual evaluation by the board. It’s important to require that annual evaluation in your bylaws.
Another matter is whether the executive director is a board member. Most nonprofits do allow this but on an ex-officio basis. Any ex-officio board member should not be a voting member. Giving the executive director voting power is a sure recipe for a dysfunctional organization and gives one person too much power. The board’s role is to oversee the executive director, not be a rubber-stamp to her whims and wishes.
Invariably, an executive director may resign, retire, be terminated, or even pass away unexpectedly. Make sure to include a transition clause defining the immediate next steps in such a scenario.
Define Board Meeting Parameters
Some boards meet quarterly, others meet monthly. This detail should be included in your nonprofit bylaws. Does the board have an annual meeting required for everyone? If so, this should be outlined in your bylaws too.
You should also codify emergency and special meetings. The procedure about how an emergency board meeting, as well as any special board meeting, is called should be spelled out in your bylaws.
Don’t forget to include details for online meetings and conference calls either. Whether your team uses Zoom, Google Meet, or Microsoft Teams, do include some parameters for these meetings. Can members vote remotely? Can they vote by conference call? Email? If you have existing bylaws, it may be time to revisit this topic.
Define Board Committee Formation and Disbandment
You should spell out how a committee is created and how it can be disbanded. For instance, during a capital campaign, it’s typical to create a campaign committee or campaign cabinet to provide leadership (and lead gifts.) Or, a committee might be formed to assist the fundraising function of the organization. Or, a search committee could be formed if the executive director resigns or retires.
Best practice is not to state the various committees in the bylaws, but rather state that the board can create and dissolve committees as they see fit.
Define Conflicts of Interest
If you have an existing conflict of interest policy, it can be included in your nonprofit bylaws. Or you could simply refer to the policy in your bylaws. Example: XYZ organization requires all staff and board members to sign our conflict of interest statement. Conflicts of interest policies should be in place for both board members, as well as staff.
Describe How to Revise Bylaws
It’s important to codify how your nonprofit’s bylaws can be changed. For instance, a simple way to create this bylaw is to call for a majority vote or lay out a minimum of two-thirds of the board at a regular board meeting.
Don’t Tie Your Future Board’s Hands
If you’re writing new bylaws for a nonprofit, we suggest that you take a broad approach rather than go into infinite detail. For instance, defining the length of the notice of meeting period could tie the hands of your board if an emergency meeting needs to be called.
Successful Nonprofit Bylaw Examples
You can go to a do-it-yourself legal website and pay for a nonprofit bylaw template. But to have strong and successful nonprofit bylaws that are customized to your nonprofit, you should consider writing the first draft yourself, or with a small team.
To help you on your journey to creating new or updated bylaws, we’ve found some examples of well-written and comprehensive nonprofit bylaw examples.
Each of these are different, reflecting the nature of the organization and its culture. When we catch an error or questionable policy, we’ll mention that, too.
This faith-based nonprofit has some straightforward bylaws that have been in force since its founding in 2007. CMF does mission trips, and teams have traveled to Haiti, the Dominican Republic, and other island nations building churches, repairing orphanages, and other charitable work.
We like this example because it’s short and to-the-point. One questionable point, however, is that the Fellowship’s President also serves as the chairman of the board. That means he is a voting member, and that’s often not a good idea because it allows that person to have too much power.
Written by lawyers for lawyers, the ACLU’s bylaws are a textbook example of successful nonprofit bylaws. This example is interesting because it mentions two types of voting members—the board, and affiliate voting members (a representative from each of the organization’s affiliate offices.) Also of interest—each affiliate has its own bylaws.
Take note of the wording in Section 7: Suspension; Removal. It is more specific than the prior example, but also gives enough wiggle room for case-by-case interpretation.
This is a unique example of nonprofit bylaws since the organization partners with the National Parks Service and is one of 55 national heritage areas in the nation. Congress designated the area in 2009.
The MDNHA is managed by The Delta Center for Culture and Learning at Delta State University. The Partnership receives federal funding, and also re-grants money to nonprofits in the heritage area. In 2012, the National Trust for Historic Preservation designated the Mississippi Delta National Heritage Area a National Treasure.
The composition of the board is especially unusual, requiring the participation of several universities, local and state governments, and nonprofit organizations.
Take note of the carefully worded section dealing with conflicts of interest.
Originally known as CANPO, the Colorado Nonprofit Association’s bylaws are clearly set forth. As a membership organization, they do a lot of different things, which is why the “purpose” section is so long.
Note their carefully crafted section about the board of directors, including the provision that missing three meetings in a row is considered a resignation.
The Portland-based Gray Family Foundation is a leading funder of environmental education and activities for children. This family foundation is administered by the Oregon Community Foundation, which has the right to appoint three of its constituents to the family foundation’s board.
Take note of Section 3 in this example. Article 3.15 sets forth very good language for dealing with virtual board meetings.
Transition House, in Norman, OK, offers supportive transitional living services, as well as a community outreach program to adults with serious mental illness and/or substance abuse issues. This successful nonprofit bylaw sample includes a breakdown of Transition House’s standing committees, states of the beginning and end of the fiscal year, and board terms.
Of note, Transition House limits each officer’s term to one year, or two consecutive years if the officer is again approved to stay in that position.
Wrapping Up: How to Write Successful Nonprofit Bylaws
We hope you’ve learned why nonprofit bylaws are so vital to your organization’s health and well-being. We also hope the examples provided here are useful as you begin writing your nonprofit bylaws or amending them.
- Write your bylaws broadly—don’t give in to the temptation to be exact.
- State your organization’s purpose.
- Indemnify your board members.
- Set forth firm term limits.
- Create a bylaw dealing with the removal of a board member.
- Include a transition clause in case your executive director is terminated, retires, resigns, or passes away suddenly.
- Include a clause about virtual meetings and/or conference calls.
- Never allow ex-officio members of the board to vote.
- If needed, get the advice of your organization’s legal counsel.
- Always run spell check!
If you follow some of these successful nonprofit bylaws guidelines, the product will be a document that can be referred to for years to come.