Nonprofit bylaws outline an organization’s name, purpose, membership, board of directors, officers, committees, voting, and amendments. They may also include sections for conflict of interest policy, prohibited activities, and tax policies. The bylaws should guide the board of directors without being overly restrictive and are not a list of all policies and practices. The last articles include financial matters, general policies, and the procedure for amending the bylaws. The not-for-profit charter is filed with the local or regional authority and must be available for inspection by members, officers, directors, and the public.
The nonprofit charter begins with the organization’s name heading and includes sections for name and purpose, membership, annual meeting, board of directors, officers, committees, voting, and amendments. The bylaws may also include sections for conflict of interest policy, prohibited activities, and tax policies such as administration of gifts and distributions and disbursements. The non-profit bylaws are the rules for operating the organization and, as such, should be written in a way that guides the board of directors in managing the organization without being overly restrictive. They present the basic structure and are not a list of all the organization’s policies and practices.
Sections of the nonprofit bylaws are indicated by article number and paragraph number. The first article of the non-profit charter must indicate the name and location of the organization’s principal office. Article 2 should indicate the general and specific purposes for the formation of the organization or entity. For example, a general purpose of a non-profit organization created to provide help to families who have had a child diagnosed with cancer might be “the stewardship of funds donated for charitable purposes”. A specific objective in this case might be “to enrich the lives of children with cancer and their families through education, support and therapeutic activities”.
In the membership section of the nonprofit charter, the definition and qualifications for membership are outlined. Rules for termination or resignation, any dues, regular or special meetings, notice and responsibilities of members are explained. The following is an article about directors, their power and responsibility. This article includes the number of directors, qualifications for office and process for electing directors, as well as term, resignation or removal from office and filling vacancies. Also described are the voting requirements and number of directors that constitute a quorum – a quorum is the designated number of directors required for actions to be lawfully taken by the board.
The next article of the nonprofit charter sets out the number and title of directors and their selection, responsibilities, and whether there will be salaries assigned to directors. After this section, the bylaws will define any tax policy, such as how donations will be managed and how distributions will be made. A subparagraph explaining the investment guidelines may be included in this section. In addition to this article, the board would include a section on committee formation and the formation and responsibilities of committees.
While there are specific laws that govern nonprofit organizations at the local and national levels in the United States, the board of directors may choose to include an article on what constitutes prohibited activities. This is generally a recommended addition, as nonprofits that violate the law may have their nonprofit status discontinued. A section on conflict of interest policy is also generally recommended.
Generally, the last articles of the non-profit bylaws include other financial matters or general policies to be followed, as well as an article describing the procedure for amending the bylaws. The completion of the bylaws would indicate the date and location of the corporation’s records and bylaws and would be signed by an authorized member of the board or director of the organization. The not-for-profit charter is then filed with the local or regional authority and must be available for inspection by members, officers, directors and the public during reasonable business hours.
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