Nonprofit bylaws, or articles of incorporation, provide nonprofits with the navigational roadmap needed to perform their best within their board of directors.
Nonprofit bylaws serve as the governing document for organizations, guiding decisions and answering questions like:
- What are the board term limits?
- What if we have to fire someone?
- What’s the quorum for approving a capital project?
- Which situations are deemed a conflict of interest?
Because of their importance, it proves critical for nonprofits to take care and be thorough when drafting bylaws. Learn the key steps to writing nonprofit bylaws.
What Are Nonprofit Bylaws?
Nonprofit bylaws are the operational rules governing the activities and decisions of the board of directors in your nonprofit organization. They put guidelines in place regarding:
- Nonprofit board responsibilities
- Meeting setups
- Guidelines for elections
- Membership structure
- Quorum requirements
- Practices and policies regarding conflict of interest
Bylaws come in the form of internal legal and binding documents. You don’t have to file yours with the state, but you may have to attest that you’ve adopted them. Moreover, the IRS may request you to submit a copy alongside your Form 1023 when applying for or incorporating the 501(c)(3) exemption.
Not only do nonprofit bylaws set out process guidelines and procedures to guide decision-making, they also help resolve disagreements and conflicts. Lastly, these crucial documents aid your organization’s transparency and keep board members accountable for supporting their organization’s mission.
How to Write Nonprofit Bylaws
Follow these steps to draft nonprofit bylaws.
1. Form a Bylaw Committee
Start by forming a bylaw committee, which will be responsible for drafting your organization’s bylaws. The committee drafts the bylaws, submits them to the board for approval, then revises as necessary.
After the organization approves and adopts the bylaws, the committee is responsible for distributing and enforcing the bylaws.
2. Understand Nonprofit Laws in Your State
Next, you’ll need to review all state laws relevant to nonprofits to ensure your bylaws comply. You may ask neighboring nonprofits for examples of their bylaws to see how local laws are reflected.
3. Commit to Thoroughness
The importance of thoroughness in your bylaw creation process cannot be overstated. As your primary guiding principles, the guidelines must be comprehensive enough to define all aspects of your organizational practices and decisions.
4. Review and Amend Bylaws Annually
Creating bylaws isn’t a one-off process; bylaws require annual review and amending to keep up with new legislation and your organization’s changing needs. This practice also helps keep your officers familiar with the bylaws.
OnBoard Drives Nonprofit Board Effectiveness
With a nonprofit board management solution like OnBoard, boards can draft their bylaws and store them digitally and securely. Multiple board members can collaborate on the living document, which can be referenced and revised annually.
OnBoard also supports effective board governance with the following features:
- Drag-and-drop agenda builder
- Meeting analytics
- Secure messenger
- Task management
- Zoom integration
Download a free board meeting agenda template for a small glimpse of what OnBoard’s purpose-built software for nonprofits can do for your organization.
Frequently Asked Questions (FAQs)
What is the Purpose of Nonprofit Bylaws?
Nonprofit bylaws guide board members' actions and decisions. They're crucial in resolving or preventing disagreements and conflicts within the establishment. The guidelines clearly outline the rules around roles, authority levels, expectations, and rights, buffering the organization from potential issues.
Do Nonprofit Bylaws Need to be Filed with The IRS?
Yes, you must file your nonprofit bylaws with the IRS. According to the Internal Revenue Code 501(c)(3)k, any tax-exempt entity must report all adjustments on all governing documents annually via the IRS Form 990.
About The Author
- Gina Guy is an implementation consultant who specializes in working with nonprofit organizations get the most from their board meetings. She loves helping customers ease their workloads through their use of OnBoard. A Purdue University graduate, Gina enjoys refinishing furniture, running, kayaking, and traveling in her spare time. She lives in Monticello, Indiana, with her husband.
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