Bylaws for Nonprofits -- Best Practices

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Rules matter.  For nonprofits, bylaws contain their internal governing rules.  Viewing a nonprofit as a legal "person," the bylaws effectively function as its "skeleton" -- internally determining how the nonprofit should "move" in its governance and key aspects of its operations.

For example, the bylaws should explain how a nonprofit's directors and officers are selected and removed, the scope of their authority, and whether others may participate in any governance or other activities (e.g., advisory councils and other committees).  Other key bylaw provisions include meeting procedures, financial and signatory authority, conflict of interest procedures, and indemnification allowances for potential personal liability.   Perhaps most importantly, the bylaws should set forth the organization's current corporate purpose statement, so that its entire mission is accurately oriented.

Just as a skeleton fits a specific person's body, so should bylaws be tailored for each nonprofit.  Good bylaws thus are fit an organization's particular goals for governance, smooth operations, and clarity.  A church's membership bylaws thus may look far different, for example, than a social service provider's bylaws.  For continued success, wise nonprofit leaders will periodically review their organization's bylaws, updating and upgrading them to ensure a continued great fit.