Nonprofit Bylaws: Can Your Board Answer the “Why” Question?

Nonprofit wizards say this all the time: Update your bylaws.

That’s good advice.

They describe the nonprofit’s bylaws as its “roadmap” or its “playbook.”

Also true.

Here’s what I have to add.

The bylaws are not the bottom line. The determinative bottom line will always be the statutes that govern the organization. Because…they are the law. (For example: in New York, the Not-for-Profit Corporation Law; in Wisconsin, the chapter entitled Nonstock Corporations; in Maine, the Nonprofit Corporation Act.)

Those statutes are the default. They are where one begins when seeking to draft a playbook, a roadmap, or an organizational path.

Some of those statutes can be modified by “provisions in the bylaws.” Some cannot. Most contain default rules that need not be repeated in the organization’s bylaws.

All that in mind, the nonprofit’s Board should ask and be able to articulate its answer to this question: “Why is this provision in our bylaws?” Not once, but for every single provision in the organization’s bylaws.

• Is the provision duplicative of what the statutes already provide? If so, why are we including it?
• Does the provision unintentionally (or intentionally) modify or override something in the statutes? If so, why are we choosing to do this?

Drafting and revising bylaws is more complicated than just sketching out what the Board would like to permit or prohibit. It’s legal work, and the Board has a fiduciary duty to have it done thoroughly by qualified counsel.

BLOG CONTENT NOT LEGAL ADVICE