How to make the bylaws for your nonprofit meaningful? Party on!

September 20, 2016

 

 

Clients always laugh when I tell them that I love bylaws. I love bylaws so much that I’m thinking about printing a bumper sticker with that message.

 

I love bylaws because if they are written well, they undergird the whole governance structure and culture of a nonprofit organization.

 

Nonprofit bylaws are successful when they are carefully crafted to answer questions such as*:

 

  1. What size board do we need to successfully steward and advance our work?

  2. What kind of term limits make sense?

  3. How should our board members be selected and removed?

  4. Should we have voting members?

  5. Do we want the chief staff person to be a voting or non-voting member of the board?  

 

Unfortunately, many bylaws do a bad job of answering these questions because the people involved with the nonprofit haven’t put enough thought into how the organization should function. To add insult to injury, many bylaws have been written in a way that no one understands them.   

 

And they include provisions that make no sense. 

 

I read a set of bylaws for a national nonprofit that said the board could be composed of 3 people with a quorum constituting a third of the group. In plain English that means that one person could call a meeting and make all of the decisions. Wow!

 

 

I read another set recently that said that board members were only required to attend one meeting a year. How can they govern?

 

The reason nonprofit bylaws can be less than ideal is that most are written by hired help when the founders are focused on mission not mechanics. Then they rarely get looked at or thought about except for an occasional glance a few months before the annual meeting to figure out the process for electing board members.

 

And even that quick annual glance can lead to a bad case of “intimidation paralysis” because the legalese seems incomprehensible. 

 

Now I’m not a lawyer but I know this much: If your nonprofit’s bylaws don’t make sense to you, they probably don’t make sense to anyone else.

 

So what’s a good nonprofit leader to do? I say, host a bylaw review party! 

 

Bring out the margaritas and toast to good governance as you think about how to create a document that really works for your nonprofit.

 

Here are things to think about as you pass around the guacamole and chips. Ask yourselves:

 

What size board do we need to successfully steward and advance our work?

 

We all know that size matters. 

 

But before you can talk about size, you need to begin the conversation with some soul searching about the kind of work you want the board to do in addition to or as part of their legal responsibilities.  

 

Let’s say, for example, that your group decides that the board should be focused on finance, fundraising, marketing, program evaluation and strategy.

 

The next question you’ll need to ask is, what does that mean?

 

What, exactly, do we want the board to accomplish and how?

 

Should we establish committees that will alternatively monitor and advance the work of our organization? If so, what will we expect of these committees?

 

What decisions should they be allowed to make on their own or with staff and which should they bring to the board as a whole? 

 

That framework for your governance structure (which you can change over time), ironically and probably won’t be part of the bylaws (usually only the executive committee and audit committee are described), but it will give you a good idea of how often the board will need to meet as a body (which will be included in the bylaws).

 

In other words, if you decide that you need working committees, and that those committees need to meet regularly to accomplish their tasks, then the board as a whole might want to meet less often in order to give the committees enough breathing room to get things done.

 

Settling on a structure will also enable your group to select a numeric range to insert into the bylaws (say, between 11 and 15) that represents the number of board members you believe can effectively do the work that needs to be done.

 

That isn’t to say that you can’t have a large governing board – you can!  You just need to make sure that the board is in fact, engaged and governing.

 

If you want your board to be large for fundraising purposes, you might consider establishing an honorary board and, this is critical, clearly define the role of that group. This will eliminate the need to have people stuck in governing roles who really have no interest in governing.

 

The moral of the story is this: bylaw party games are fun but picking a random number out of a hat to determine how many people you want to have on your board, isn’t!

 

Read on to my next blog post to party on with four more insights about bylaws.


*Please note: This is a blog, not a comprehensive list of everything that you’ll need to consider when reviewing your bylaws. I hope the information I’ve provided is helpful but keep in mind that what I’ve written does not constitute legal advice.

 

Pat Libby Consulting is a San Diego firm that offers nonprofit consulting and philanthropy consulting services.

 

Contact me for information about how I can help get your organization's bylaws and governance structure on track. 

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