All nonprofit organizations need regulations that determine how they are governed. Bylaws are the legally binding rules that outline how the board of a nonprofit will operate. While they are unique to each organization, nonprofit bylaws generally have a similar structure and use.
How Are Bylaws Used?
Bylaws are a framework that guide the board’s actions and decisions. They clearly outline rules regarding authority, rights, and processes.
How Are Nonprofit Bylaws Created and Amended?
The board creates bylaws when the organization is established. States have different statutes that apply to bylaws — some dictate specific provisions, while others give more general guidelines. Consult the state regulations from your Secretary of State’s office or your state Attorney General’s office. If your organization operates in more than one state, follow the laws in the state where the organization is incorporated. Once created, an attorney can review them to ensure they meet the legal requirements of the state.
Bylaws, like other policies, should be reviewed on a regularly scheduled basis in order to reflect how the organization works and remain relevant. Keeping bylaws simple in language and content can help ease this process. Some organizations appoint a task force to review and make suggestions for revision, reporting findings to the whole board. If the board votes to amend the bylaws, record the date that they were amended on the policy itself. Report any major structural or authority changes in your next Form 990, as appropriate.
What Should Your Bylaws Include?
Bylaws are individual to an organization, yet they should include specific issues and processes:
- Name and location of organization
- Statement of purpose, as aligned with IRS exempt purposes
- Role definition
- Terms and term limits of office
- Board members
- Terms and term limits, if terms are limited
- Board member removal
- Size of board
- Membership (categories, responsibilities)
- Frequency of meetings
- Quorum requirements
- Standing committees, if any
- Authority of executive committee
- process to create task force or new committees
- If board committee members need to be board members
- Standing committees, if any
- Chief Executive
- Voting privileges, if any
- Board member compensation
- Indemnification of board members
- Amendment of bylaws
- Dissolution of the organization
Hierarchy of Laws
While bylaws are a detailed and immediate source of regulations, they must follow federal and state laws and comply with your organization’s articles of incorporation. If there is a contradiction between the bylaws and these other regulations, that part of the bylaws is invalid. For bylaws to be concise, the board also should create comprehensive policies.
Organizations thrive when they have the right policies and structures in place to support their success, and the guidance of nonprofit bylaws are an integral part of this. Whether you are learning to build bylaws for the first time or reviewing what you have instated, your board can best protect your organization and create greater cohesion within your nonprofit by prioritizing, updating, and adhering to your bylaws.
101 Resource | Last updated: October 30, 2023
Other Resources: Better Bylaws: Creating Effective Rules for Your Nonprofit Board, Bylaws: Dos & Don’ts, Bylaws: Effective Rules for Your Board (PowerPoint), The Essential Ingredients for Good Bylaws – Charter Boards