NonProfit Bylaws are established to offer the structure and guidelines by which you will manage your NonProfit Organization.
NonProfit Bylaws are developed to expand on the typically limited guidance provisions included in your initial NonProfit Articles of Organization (for most Organizations these are your NonProfit Articles of Incorporation).
Your NonProfit Bylaws are a living document and are likely to evolve through provisions to amend them as your Organization grows and changes. NonProfit Bylaws are not required by the I.R.S. to recognize an Organization as Tax Exempt, but for most NonProfits they are an excellent way to provide seamless transfer during changes to your Board of Directors and if developed well and followed precisely they will also provide protection against losing your Tax Exempt Recognition due to violations of the I.R.S. rules for NonProfit Tax Exempt Organizations.
A basic set of NonProfit Bylaws, put in place and adopted by your initial Board of Directors, should offer a roadmap for the following:
- The specific details of how you will nominate and select Officers and Board Members; what the voting rights for each of them are, and the length of their terms. The responsibilities of each Officer or Board Member may be spelled out in detail.
- The measures necessary to remove an Officer or Board Member.
- Your membership requirements; whether membership to the Nonprofit Organization is open, and if so how an interested party would become a member, or a declaration that the Organization is closed and has no members or with members being limited to Officers/Board Members.
- The guidelines for meetings- frequency of regular meetings; attendance requirements, and provisions for holding special or emergency meetings.
- A description of what steps and voting percentage are necessary to amend your NonProfit Bylaws.
- A Conflicts of Interest Provision is a prudent addition to your NonProfit Bylaws, with very specific descriptions of what your Organization considers a “Financial Interest”, and what steps are required to insure that your Officers and Board Members do not participate in voting on any expenditure in which they might be construed to have a Financial Interest. These types of transactions should include compensation/salary and any expenditure of the NonProfit Organization in which an Officer or Board Member has a relationship of some type with an entity with which the NonProfit Organization is planning to conduct business. Click here for a Sample Conflict of Interest Policy recommended by the I.R.S.
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