Creating an Amendment to Nonprofit Bylaws
Good governance practices demand that nonprofit boards review and make amendments to their bylaws annually to ensure sound leadership.
Operating a nonprofit organization is similar to running a for-profit corporation in many ways. According to John Hopkins University, if we classified all the nonprofits in the world, they’d have the 5th largest economy. As a major player in society and the economy, nonprofit boards need to be diligent about reviewing and maintaining their organization’s bylaws to ensure they remain relevant to the mission.
Your bylaws are a legal document that outlines the rules and procedures for your nonprofit. As times change, boards may need to change their protocols. When the rules outlined in the bylaws need to change, the board needs to make and approve an amendment to the bylaws.
Amending the bylaws doesn’t have to be a daunting task. We’ll outline the types of things that commonly require amendments, describe the bylaws amendment process, and provide tips for tools to make the job easier.
Common Areas of the Bylaws to Review for Amendments
In addition to reviewing the bylaws annually, nonprofit boards should also review them anytime there’s a major change in the nonprofit. For example, if the nonprofit moved to another state or merged with another organization, the board is responsible for making necessary changes to the bylaws.
The following list highlights some of the common reasons for initiating a bylaws amendment:
- Increasing the number of directors as your nonprofit grows
- Changing the terms and limits for your board directors (shorter or longer)
- Adding a board director officer position
- Changing your quorum requirements or making them more specific
- Amending the rules for required notice of meetings
- Adding rules for virtual meetings and hybrid meetings
- Changing the rules for member dues and qualifications (for membership nonprofits)
- Removing overly specific language
- Creating an executive board, advisory board, or emeritus board
- Changing the board’s voting rules
This is by no means an exhaustive list. It’s the board’s responsibility to know how to make an amendment to the bylaws and keep them updated continually.
How to Write an Amendment to Change Bylaws for a Nonprofit Organization
If your board is making its first amendment to the bylaws, you may want to allow a board member with experience changing bylaws to take the lead. Alternatively, you might enlist the help of an experienced board member from outside the organization.
The following amendment to the bylaws format outlines the steps your board needs to take when amending your bylaws.
- Check with your state nonprofit agency for the requirements for nonprofits to amend your bylaws. Depending on the type of amendment you’re making, you may also need to notify the IRS of a new amendment. Your state may require you to use an official bylaws amendment form.
- Think through all scenarios carefully. Will the new amendment affect any other rules or procedures? Will the amendment require another process or rule? For example, if you have a rule describing the process for removing a board member, you may also need to create a process for replacing the board member.
- Review your current bylaws and discuss whether the amendment could be challenged in court for any reason.
- Draft an amendment proposal for board discussion.
- Enlist the help of a lawyer to review your amendment.
- Arrange for a presentation by the amendment’s drafters to explain the amendment and detail why your nonprofit needs it so board members can make an informed vote.
- Give the board adequate notice as to when the vote on the amendment will take place.
- Review the voting rules to determine how many votes are needed to pass the amendment.
- Formalize the amendment by writing it into the bylaws and changing all necessary documents.
- Notify the IRS and the state agency of the amendment if required by law.
How to Formalize an Amendment to the Bylaws
A couple of tools that will aid your board in formalizing an amendment to your bylaws are an amendment to the bylaws template and a bylaws amendment sample. A bylaws amendment template makes easy work of writing up the final copy of an amendment. All you have to do is fill in the blanks.
Here is an amendment to the bylaws sample for your review:
Certificate of Amendment of the Articles of Incorporation for the ABC Nonprofit
The undersigned certify that:
- We are the president and the secretary, respectively, of the ABC Nonprofit, a Tennessee corporation with the Entity Number of XXXXXXXXX.
- Article X of the Articles of Incorporation of this nonprofit is amended to read as follows:
(insert the provision as amended)
- The board has duly approved the foregoing amendment of the Articles of Incorporation of directors.
- The foregoing amendment of the articles of incorporation has been duly approached by the required vote of the members. (Or you could specify that the nonprofit has no members if that’s the case.)
We further declare under penalty of perjury under the laws of Tennessee that the matters outlined in the certificate are true and correct according to our knowledge.
Below these statements, be sure to add the date. Add a line at the bottom for the typed names and signatures of the board president and secretary.
As you can see, an amendment of the bylaws template will reduce the amount of research you need to do to properly formalize your bylaws amendment and streamline the process in general.
As a word of caution, while reviewing and evaluating the language in the bylaws from other nonprofits is helpful, be careful not to over-rely on it. Every nonprofit is unique, and every state has different laws for nonprofits. Customize the wording for your bylaws and amendments and be sure they meet state and federal compliance.
BoardEffect’s board management system provides a secure platform for storing your bylaws and other necessary compliance documents. The platform is an efficient tool for preparing for board meetings, managing your board calendar, and collaborating on the vital work you do every day.