Bylaws define the rules of non-profit entities and understanding them is essential to success for advancement professionals who serve as alumni association or foundation executive directors or as members of other non-profit boards.
Simply put, bylaws are a set of rules established by an organization to regulate itself. They define the group’s purpose, who its members are, who can be an officer, how often meetings must be held, who is eligible to serve on its executive committee, whether or not there are standing committees, what parliamentary authority will govern proceedings, and how the bylaws can be amended. Not knowing what they say, or having an up-to-date document, can short-circuit plans and in the worst-case scenario, get you in legal trouble, especially when fund-raising and the distribution of funds are involved.
Oftentimes, bylaws rest out-of-sight in a dark drawer until a problem arises. In actuality, they are a living document and the first place attorneys look when something goes wrong. For an executive director, bylaws can be a powerful ally. Bylaws should be updated every five years or so, especially in light of rapidly changing technology. Building good bylaws can be a fraught experience and attempting to make changes is probably not the best first action for a new executive director. Eventually, however, you will likely be in a situation that requires updating or creating them.
Twenty years ago, as a rookie alumni association executive director, I got my baptism in the ramifications of living with bylaws when I inherited a somewhat rogue board. Since then, I have had many non-profit roles, both for universities and charitable organizations, and while I am not an attorney and this post is not about telling you how to write bylaws, here are my opinions on useful concepts to include.
Define the relationshipof the executive director to the board and specify whether or not he or she has voting privileges. State that the executive director is an ex officio member of all committees.
Keep the board small.Large membership means difficulty in getting things done and higher costs to host meetings, especially if your association pays member travel expenses. Choose an odd number that is divisible by the length of years that constitute a board term. Therefore, if terms are three years, the board might have 21 people which means seven members would rotate off and seven new people would arrive each year.
Make terms short.Three years is about the length of time most people can sustain interest and be truly effective. Short terms will keep your board fresh, provide opportunities for more people to participate, and ensure that its composition reflects your membership both in age and diversity. The first year is for learning, the second is for peak productivity, and the third is for productivity, leadership, and mentoring newcomers.
Don’t allow a progressionfor officers that stipulates people automatically progress through officer roles until they finally retire or become president by default. The person who was brilliant as the first vice president for finance may not have the skill set to be the next president but you’ll be stuck with her if that’s the sequence the bylaws stipulate. Flexibility in filling officer positions allows you to recruit the best people for jobs.
Use a nominating committeeto vet potential board members and officer candidates. The committee then brings a slate to the full board for an up or down vote. This cuts down on politics and voting for personalities as opposed to selecting the right people for jobs. Bylaws should define the structure of the nominating committee. It is a good idea to include both current and former board members. Including past board presidents in this role is an effective way to keep them meaningfully involved and take advantage of their insights and experience. Rotate members each year.
Define a period of timeduring which retiring board members are ineligible to be reelected. One year works pretty well. This way, board members can’t simply renew themselves. This will help prevent your board from getting stale and becoming a clique.
Require board membersand prospects to be current donors and involved in your organization’s activities. It is important for leaders to have skin in the game. Board membership should never be the first exposure to an organization, no matter how prominent a person may be.
Don’t allow family membersto serve simultaneously. In the case of alumni associations, I also don’t recommend allowing school employees who happen to be graduates (or their alumni spouses), to serve as board members. In all of these situations there is too much chance for conflicts of interest. Besides, you’ve got many qualified people among your alumni body who would love to be part of your board. There is no need to fall back on using two members of the same family or alumni who are connected by employment.
Specify what constitutes causefor removalfrom the board and how this process would work.
Include a statement about your commitment to diversity.
Add the authority to conduct business via technology.This might include voting, signing documents, and transferring funds.
Include the requirementthat the group provide directors and officers insurance to protect board members in the event of a lawsuit.
Define what constitutes a quorumfor conducting business.
Specify your parliamentary authority.This means the board is bound by a set of procedures for conducting business, casting votes, and resolving disputes. The classic reference, Robert’s Rules of Order is the U.S. standard. Editions are updated regularly and the book also includes sample bylaws.
Consult an attorney before accepting bylawsto ensure that they are strong enough to withstand legal challenges and written in accordance with the laws of your state.