Most organizational founders of nonprofit organizations find that setting up a nonprofit organization is a bit daunting, at least in the beginning. One of the necessary tasks is writing the organization’s bylaws. The bylaws serve as a guidebook for the board of directors on all the “how-tos” like holding elections, fulfilling quorum requirements, organizing meetings and keeping the meetings orderly.
Writing bylaws is time-consuming, but not difficult. Samples of bylaws are readily available on the internet and at the library. The IRS doesn’t require that you use specific language, but it’s a good idea to include references in the bylaws that refer to the organizational structure and purpose of the nonprofit.
In writing your bylaws, it’s important to differentiate between the words “shall” and “may.” Use the word “shall” when it’s something board members are required to do. Use “may” when the task is optional.
The Secretary of State is the legal authority over nonprofit organizations in most states, so the first step you should take is to contact them and make sure the new nonprofit is abiding by all legal requirements.
Your bylaws will vary from those of other organizations and should suit your organization’s needs. Bylaws should take a form similar to this set of bylaws for a fictitious nonprofit:
ARTICLE I. NAME OF ORGANIZATION
The name of the organization is Feed the Homeless.
ARTICLE II. CORPORATE PURPOSE
Section 1. Nonprofit Purpose
This corporation is organized exclusively for charitable, religious, educational and scientific purposes, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under section 501(c)(3) of the Internal Revenue Code, or the corresponding section of any future federal tax code. (This is an example of language that’s not necessary, but good and appropriate to include.)
Section 2. Specific Purpose
Feed the Homeless provides food at shelters at various locations in the ABC Community. The purpose of our organization is to provide for some of the most basic human needs so that homeless persons have the strength and confidence to fully provide for their own needs.
ARTICLE III. MEMBERSHIP
Membership of Feed the Homeless is limited to the members of the Board of Directors.
(If you have members, you would list criteria for membership eligibility, dues, rights of members, voting rights and termination of membership.)
ARTICLE IV. MEETINGS OF MEMBERS
(For meetings with members, you would write sections that include when meetings will be held and when the annual meeting should be held. There might be a section on how to handle special meetings, notices of meetings, what constitutes a quorum and how to determine the outcome of voting. Since this nonprofit doesn’t have members, this section would be omitted.)
If the organization had members, write the statements in sections, such as:
Section 1. Regular meetings. Regular meetings will be held at least quarterly at a time and place determined by the chair.
Add sections for handling special meetings, quorum requirements, etc.
ARTICLE V. BOARD OF DIRECTORS
(This is typically one of the longest sections because board directors have many responsibilities. Each section should be followed by a description.)
Section 1. General Powers
Section 2. List the number of directors, term limits and requirements.
Section 3. Regular and Annual Meetings
Section 4. Special Meetings
Section 5. Notice
Section 6. Quorum
Section 7. Forfeiture
Section 8. Vacancies
Section 9. Compensation
Section 10. Informal Action by Directors
Section 11. Confidentiality
Section 12. Advisory Council
Section 13. Parliamentary Procedure
Section 14. Removal
ARTICLE VI. OFFICERS
The officers of this Board shall be the President, Vice-President, Secretary and Treasurer. All officers must have an active membership in the organization.
Section 1. President
The President shall preside at all meetings of the membership. The President shall have the following duties: (list them)
Section 2. Vice-President
The Vice-President shall perform all the duties of the President during the absence of the latter. The Vice-President’s duties are:
Section 3. Secretary
The Secretary shall attend all meetings of the Advisory Board and of the Executive Committee, and all meetings of members, and assisted by a staff member, will act as a clerk thereof. The Secretary’s duties shall consist of:
Section 4. Treasurer
The Treasurer’s duties shall be:
Section 5. Election of Officers
Section 6. Removal of Officers
Section 7. Vacancies
(Most states have laws requiring certain officer positions for boards of directors.)
ARTICLE VII. COMMITTEES
Section 1. Committee Formation
The board may create standing or ad hoc committees as needed, such as fundraising, finance, etc.
Section 2. Executive Committee
(Usually the officers serve as members of the Executive Committee, and that would be stated here, along with the powers they have.)
ARTICLE VIII. CORPORATE STAFF
(Feed the Homeless probably wouldn’t have paid staff, but depending on their finances, they might have an Executive Director. Outline the Executive Director’s duties and responsibilities here and add sections for other corporate staff if they apply.)
Section 1: Executive Director
ARTICLE IX. CONFLICT OF INTEREST AND COMPENSATION
(The IRS asks many questions about conflict of interest, and having strong policies around conflict of interest in the bylaws supports the organization’s stance on it.)
Section 1. Purpose
Section 2. Definitions
Section 3. Procedures
Section 4. Records of Proceedings
Section 5. Compensation
Section 6. Annual Statements
Section 7. Periodic Reviews
Section 8. Use of Outside Experts
ARTICLE X. INDEMNIFICATION
(Indemnification refers to one party covering losses for harm to another. Most nonprofits have Director & Officers insurance policies to protect them from undue liability. The indemnification section in the bylaws is designed to protect board members and employees from lawsuits connected with their duties relating to the nonprofit.)
Section 1. General
Section 2. Expenses
Section 3. Insurance
ARTICLE XI. BOOKS AND RECORDS
The corporation shall keep complete books and records of account and minutes of the proceedings of the Board of Directors. (This is pretty standard wording.)
ARTICLE XII. AMENDMENTS
(This section outlines the ways that Articles of Incorporation and bylaws can be amended. Both typically require giving a certain number of days’ notice.)
Section 1. Articles of Incorporation (usually requires absolute majority vote)
Section 2. Bylaws (usually requires a majority vote)
Formalizing the Bylaws
The final step is for the board to review the bylaws. Finding them acceptable, the board votes and approves them. The board president should sign the bylaws and have the secretary attest to the signature. It’s also acceptable to have all board members sign the bylaws. The wording should be along the following lines:
We, the undersigned, are all the initial directors or incorporators of this corporation, and we consent to, and hereby do, adopt the foregoing Bylaws, consisting of the ___ preceding pages, as the Bylaws of this corporation.
ADOPTED AND APPROVED by the Board of Directors on this ____ day of _________, 20__.
John Doe, President – Feed the Homeless
ATTEST: Joan Dixon, Secretary – Feed the Homeless