5 Rules For Revising Nonprofit Bylaws

I have some bad news: Your bylaws probably suck.

For most small nonprofits, the bylaws is a document that’s been sitting in a drawer gathering dust for 10 years. Or they’ve been revised 100 times to rearrange the same exact wording over and over again without making any important, substantial change.

So many times, revising your bylaws means toiling away for six months or more in repeated committee meetings. Your volunteers are debating over tiny details like wording or grammar, slowly losing their will to live.

So many nonprofit executive directors, board members, and volunteers that this is just the way it goes with bylaws. But, wait! It doesn’t need to be that way! Here are my essential tips for your next set of bylaws:

1. Understand your state’s nonprofit corporation law – or find someone who does.

No matter what's in the bylaws, it's super important that someone keeps an eye on the statute. If there are things the bylaws don't cover, it's expected that you'll follow the state law. Plus, nonprofits need to be sure that their bylaws don't allow things that contradict the statute. If the bylaws do contradict the law, those provisions in the bylaws will have no force or effect, and anything the board or staff does based on those provisions is null and void. These statutes vary from state to state, so it's important that someone looks at your state's statute. Looking up a random sample of bylaws on the internet or using another org's bylaws as a starting point isn't enough to know whether everything in there is legal.

Bylaws are important – take the time to draft your own with your state law in mind.

2. Make sure your bylaws are consistent.

This sounds simple, but there are a lot of ways to draft an inconsistent document that doesn’t help you in the long-term. The bylaws should be consistent with external sources – like your state law (see #1), IRS regulations, nonprofit best practices, and other rules you might have to follow.

The bylaws should also be consistent internally – meaning that they are consistent with your other governing documents, like your Articles of Incorporation. If your articles and bylaws have two separate purpose statements, are you really going to know which one is most accurate? Guessing not. Plus, it goes beyond contradictions in documents. You also need to make sure that the bylaws accurately reflect how you run the organization. There's no sense in having a document full of rules and guidelines that don't relate to the org in the real world.

3. Try to address all the possible situations.

Bylaws with a bunch of holes in them aren't helpful. Here's an example: say your bylaws have a provision about removing a board member, but then they don't have any provision about how to fill that vacancy. If (and when) the time comes that a board member has to be removed, you'll be flying blind. It's crucial that you take the time to walk through all of the “what-if” scenarios so that the bylaws are actually helpful if and when that time comes.

4. Keep your bylaws flexible.

How the organization functions today may not be exactly the same as it will need to function in the future. Try to build flexibility into the bylaws, like allowing for a range for the number of board members or allowing the board to designate additional officers not named in the bylaws. The bylaws should provide an outline of the governance structure, but they also should allow some flexibility if and when changes are needed in the future.

With that, don't make it super difficult to make future changes to the bylaws. Sometimes bylaws will require two-thirds vote of the membership or have other difficult requirements to approve changes. You'll definitely want some sort of approval process, but don't make it unnecessarily difficult to follow.

5. Reserve the details for policies, not bylaws.

It can be tempting to put all the details in the bylaws – but sometimes that's not the way to go. Some details are more appropriately placed in board-approved policies rather than in bylaws. Bylaws should be a relatively concise and easy-to-navigate document, and too much detail will do nothing but clutter an already long document. Plus, you don't want to be constantly amending them. Things that are likely to change over the coming years, like member dues or criteria, belong in board-approved policies, which are much easier to change if needed.

The Bottom Line: Don’t Be Afraid to Start Fresh

The bylaws are the backbone of nonprofit governance. Even if it's not a document most directors or nonprofit staff touch on a daily basis, the bylaws are critical. And frankly – the process to updating an existing (not great) draft is…difficult. Most nonprofit directors and professionals aren’t professional bylaws-drafters, which makes it even more difficult.

As a nonprofit lawyer, nothing makes my heart sink faster than hearing from a potential client who has spent months and months on a bylaws revision. They’ve burned 9 months on a new draft, and they reach out to see if I can take a “quick look” to make sure everything is “all good.” Usually, I have to break it to them that it’s time to start fresh.

So, if it’s time for a governance update – make sure you get the help you need. No budget to hire an attorney? No problem! Check out my low-cost Do-It-Yourself Bylaws tool at www.missionguardian.com/diy-bylaws

Jess Birken is the owner of Birken Law Office, a firm designed to help nonprofits. Ideal Client Engagements are nonprofits looking for a strategic partner who will give pragmatic advice and keep business operations on track so the mission work stays a priority.

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