Writing non-profit bylaws can be one of the more confusing parts about starting a non-profit,
but it doesn't have to be! In this video, let's demystify bylaws and talk through
the steps that you need to take in order to get them drafted and approved. [Music]
Welcome or welcome back to my channel! My name is Amber Melanie Smith and I'm a non-profit founder
and executive director who also makes videos on YouTube helping people who want to get started
on their social impact Journey whether that's starting a non-profit or a socially conscious
business or some other way of doing good in the community. As always I hope that you find this
video is useful and helpful don't forget to give it a like and a thumbs up to let YouTube know that
you want to see more videos like this also if you're in the process of starting a non-profit
or developing a sustainable fundraising plan be sure to check out my website FounderToFullTime.com
where I have a couple of online courses that walk you through those two topics so when you're first
starting a non-profit bylaws are one of those things that you've just gotta do to get things
up and running and get your official non-profit status approved by your government but if you're
not familiar bylaws are officially defined as the in internal rules and regulations that guide how
a non-profit operates including its structure decision-making processes and procedures so
basically it's a document that outlines how your board is going to vote and when they're going to
vote on major decisions for the organization among other things so if you're starting a non-profit
and you're at this very beginning stage of forming the organization the bylaws are typically written
by the organization's founder or founders with the help of their board of directors so it's the
board's job to ultimately review and approve and vote on adopting those bylaws and shaping what
goes into those bylaws a lot of times I'll get questions from people from some of you in fact
asking things like what a non-profit's leadership is allowed to do so things like can aboard fire a
Founder can you pay someone to do something for the organization so well there's certainly rules
and laws around some of these things ultimately what a non-profit does is up to its own bylaws so
you can write them to govern yourself and your organization as you need to within of course
legal parameters so the fact of the matter is not all nonprofits have the same bylaws they're
not all operating by this same governing rules because they're each customizing their bylaws
for themselves when they get started now the thing is though once you write the bylaws and your board
votes and the bylaws are adopted you do need to follow them pretty strictly because deviation
or not following your own bylaws is something that the IRS at least in the United States can penalize
you for so make sure that you're only including in your bylaws stuff that you know you can reasonably
follow like don't say you're going to have a board meeting every single week if you think that the
availability of your board might only be once a month just put like the minimum that you can that
you know for sure you can follow in there so let's talk through some of the steps that you need to
take in order to write your bylaws I do recommend finding one of the numerous free non-profit bylaw
templates online as a foundation just to kind of get you started with structure so so that
you don't have to start from scratch alright so step number one is that you need to make sure your
bylaws comply with legal requirements I mentioned before that your bylaws are your own governing
document that you customize but that you do have to follow your Regional and federal government's
laws so every region every country is going to have different rules on what needs to possibly
be included in a non-profits bylaws or what nonprofits are allowed to do so just make sure
you're taking some time to familiarize yourself with those so that what you put in your bylaws
matches the legal requirements as well and for those of you in the United States a great place to
start is the IRS webpage I'll leave a helpful link below in the description of this video that kind
of outlines some things that you're going to need to include in your bylaws okay the second thing
that you include in your bylaws is a definition of your organization's purpose and Mission this
should be your mission statement and also just a really high level overview of your basic goals as
an organization this will set the foundation for the work that you're organization is going to do
now if you were to ever change or expand your mission you would probably need to update that
mission statement in your bylaws and re-vote to re-adopt your bylaws and then resubmit your
bylaws to your governing bodies number three is establishing the organization structure
so this is where you outline the basic roles and responsibilities of your board your board
officers any committees that you want to have you don't have to get into an extreme level of detail
here but just enough so that they know how to govern themselves this will also include a clearly
outlined process for electing new board members or removing board members and the terms of office
so how many years would a board member serve and can they be re-elected after that and then how
frequently are your board meetings going to be are they going to be at least quarterly are they going
to be once a month once again keeping in mind that you can always choose to meet more often
than that but what you put in your bylaws is the bare minimum number of times that you will meet as
a board and if you don't you will be in violation of your bylaws so you don't want to do that number
four is you want to outline some basic decision making processes so what is the process by which
a new policy will be approved by the board how are decisions going to be made for example
um you know what constitutes a quorum um a quorum is the minimum number of people that you need to
have in order to even launch a vote at all let alone how many people need to vote for it says
how many people have to be there in order for you to reasonably call for a vote on something
so for example um how many people on the board have to vote in order to pass a new policy or
changing the bylaws is it a majority of just 51 is it two-thirds is it three-quarters of the
vote so just be thinking about the logistics of how um your board should vote in in a way
that's both reasonable and meets the needs of your organization number five is in your bylaws
you want to include some information about addressing Financial or operational matters
so for example what is the process for your board to vote on and approve your annual budget what is
your fiscal year going to be as an organization um and that is the same year that you uh flesh out in
your budget so a fiscal year is a period of time um that you're tracking your expenses and and your
um your income so it's a year so your fiscal year could be just like January 1st through December
31st it could follow the annual calendar it could also if you wanted it to be be July through June
it can be any 12-month period that you want it to be and it's totally up to you A lot of times
an organization will choose what their fiscal year is going to be based on major influxes of
Revenue or expenses so let's say you know you have a major fundraiser in May maybe you want to make
your fiscal year start in June or July that way you'll have all the money in to start fresh with
the new year and um you will be reporting your taxes on the fiscal year prior to that and then
another part of this is what is your process going to be for any Financial audits that you would
um launch internally to assess your financial situation or if the IRS calls you and says
we're going to audit you what is your process for dealing with that number six is you want
to include some conflict resolution mechanisms so what is your process for resolving a dispute
between board members or board and your staff or you know handling a conflict of interest so one
thing you might consider including including here what are the steps your board would take to assess
and handle a potential conflict of interest part seven is you want to put in rules about how do
you update and amend the bylaws themselves does it take three quarters of your board voting yes
to make a change to your bylaws is it two-thirds so what does that look like how is that handled
um also what happens if your organization needs to dissolve what happens to all of its assets as
a non-profit in the United States at least you do have to give all of your assets to another 501c3
organization they cannot just be distributed to people or businesses so those are all the steps
to draft your bylaws but what do you do after that well step number eight would be if you
can if you have the capacity to do so review your bylaws with a legal counsel just to make sure you
haven't missed anything that everything that you have in your bylaws is like I said before
compliant with your Regional and federal laws step number nine is the big board vote so your
board needs to thoroughly review the bylaws just do a double check that nothing is in violation of
Mission Vision Values or the law as we've talked about and then your board should vote to approve
the bylaws and adopt the bylaws as the official governing document for the organization step 10
is filing your bylaws so obviously you want to keep an official copy for your organization to
refer back to at any time but most jurisdictions also require you to file them with your state or
federal government because they want to hold you accountable as a non-profit for how you
plan to govern yourself so this could be your secretary of state or the IRS final thing step
number 11 is every once in a while your board really should be looking at your bylaws and
just asking themselves are these bylaws still meeting our needs are they up with the times and
matching our modern operations and if not what tweaks should we make in order to better match
what our our current operations and Mission and structure looks like so at that point you would
look at whatever amendments you all need to take and the board would vote to make changes to your
bylaws in accordance with how you have written in your bylaws the board is allowed to do that
okay so while perhaps the bylaws situation is not the most interesting or exciting step
of starting a non-profit as you can see they're really important in creating the structure that
your board needs to operate effectively and of course they are required by law so it's really
important to do them and to do them well I'd love to hear from you what is your journey in
the bylaws process have you already written some for your organization uh is there a particular
thing that you're struggling with leave that in the comments below as I mentioned before if
you're in the process of starting a non-profit or developing a sustainable fundraising plan
check out my website foundertofulltime.com for some educational online resources about
those topics I also have a newsletter for change makers and non-profit leaders where I share tips
and strategies and sometimes funding opportunities that I come across and you can subscribe to that
at the link below this video as well finally I have a Facebook group called Change the World
or Bust! We've got 4,000 people in there from around the world all sharing how they're making
an impact and I hope you can come over and join us there too I hope that you found this
video helpful and useful once again I'm Amber Melanie Smith and I'll see you next time, bye!