All nonprofit corporations should have bylaws in place. Even non profit organizations that are not corporations should choose to have them for several reasons, but especially because they establish guidance and clarity for the decision-makers. Bylaws contain rules that govern how the board of directors operates; they cover the relationships of directors, officers and members of an organization; and they establish who has the power to make certain decisions. In the end, bylaws can dictate how disputes are resolved.
Understanding Bylaws for Nonprofits
According to the General Not for Profit Corporation Act of 1986, the term “bylaws” refers to “the code or codes of rules adopted for the regulation or management of the affairs of the corporation irrespective of the name or names by which such rules are designated.”
Basically, a nonprofit’s bylaws form an overarching set of rules that dictate how the entity should resolve disputes. The General Not for Profit Corporation Act of 1986 contains any regulations not addressed by the bylaws and, conversely, bylaws can override any defaults put forth by the Act.
Examples of bylaws can be found in countless books and online, but each organization will have different needs based on their size, mission, etc., and these factors should be considered when drafting or revising the documents. It is advised to consult an experienced nonprofit lawyer when creating or revising bylaws, as their input could be invaluable to the future of your organization.
What to Consider When Revising Bylaws
When drafting new or renewed bylaws, there will be lots of ground to cover, but three main things will need to be thoroughly addressed, including 1) directors & board members, 2) meetings or board meetings, and 3) officers.
- Illinois requires a minimum of three board members, but the range of possible board members cannot be five more than the smallest number of members (so, 5-10 directors, not 5-15 directors). Also, bylaws should include election processes for board members and term limits for each board member. Furthermore, most nonprofits should include restrictions on who can be a director and how a director can be removed from an organization.
- Organizations should consider how often (and when) the directors should meet, the requirements for special meetings, the organization’s quorum and how many days of advanced notice will be required prior to a special meeting.
- Bylaws should include regulations and information about officers within the organization, including who elects the officers, the officers’ term limits and how an officer can be removed from his/her position.
When these three categories are addressed in detail, they can override the defaults set forth by Illinois state law and provide your nonprofit with a viable list of rules and regulations. Failure to thoroughly address these three main categories – during the first draft and during revisions – could cause several issues within the organization.
Other miscellaneous things should be addressed in your bylaws, too. Organizations should express when their fiscal year runs and consider regulations for members, including how they become/remain members and how valuable their authority is within the organization.
Getting Help When Revising Bylaws
Bylaws will be different for every organization, but there are plenty of recommendations that are universal. At James C. Provenza & Associates, we boast over 20 years of experience helping major nonprofits in and around the Chicago area with bylaws and other important documentation.
Our team understands the critical importance of drafting and revising any organization’s bylaws and, with comprehensive knowledge of Illinois nonprofit law as well as best practices for growing nonprofits, Attorney James C. Provenza will eliminate oversight and ensure effective and functional bylaws. Contact our office at (847) 729-3939 today. We look forward to helping ensure that your organization is a successful one.