14 Secrets To NOT Leave Out Of Your Bylaws
Download MP3Welcome to the Grant Writing and Funding Podcast where it's all about, you guessed it, grant writing and funding made easy so you can increase capacity, grow funding, and advance your nonprofit or freelance mission. Now let's hand it over to your host, grants expert and author Holly Rustic, so you can increase your funding and drive impact.
Speaker 2:Hi, change makers. It's Holly Rustic here, podcast host of grant writing and funding. Alright, guys. So I am here to help you grow capacity, increase funding, and drive impact, and that is for your nonprofits or for your freelance grant writing company. Alright, guys.
Speaker 2:So we're gonna get into it today. It's all about the bylaws. Alright. So what we're going to look at is, you know, really what to the main things to include in your bylaws, And we are moving along in our entire series of how to launch a five zero one(three) nonprofit organization, and we have finally reached the bylaws! So far we have covered what type of nonprofit to open, how to conduct market research to see if there is even a need for your nonprofit, how to select board of directors, and how to write awesome articles of incorporation.
Speaker 2:So last week, we went over that, and we also have a downloadable for the articles of incorporation. Today, I'm going to cover the b word. Yes, the bylaws. Now this might be the thing that sounds the most familiar to you. Bylaws are mentioned quite often, and they're used in nonprofits and for profits.
Speaker 2:But instead of outlining them line by line as I did the articles of incorporation, I am going to give you my top 14 secondrets to not leave out from your bylaws. These will cover the main points that I often see left out of bylaws, but really they really should be included. They're really kind of like, okay. You should have these, and when I do a nonprofit wellness audit, I really have these questions here. Are these all included?
Speaker 2:So you can definitely get a downloadable of the checklist by visiting grantwritingandfunding.com/bylaws. Just how are bylaws different from articles of incorporation? Because you're like, okay, pretty much sound the same, they both cover a lot of stuff that you need for your nonprofit, right? Well, as stated last week, articles of incorporation are like your constitution. Right?
Speaker 2:They're the constitution for your nonprofit, they're like the structure, and the bylaws are like individual laws and they're a little more detailed, and that's another reason we're not gonna go over them line by line, would be here all day. But, if you are listening to this podcast while you're working out, driving, or cooking, then definitely come back to this when you can take some time to take notes, to get the 14 top things, or for your convenience you can definitely jump over to the blog at grantwritingandfunding.com/bylaws to get a free downloadable checklist. And if you really want a full template and step by step instructions on bylaws, then be sure to join the online membership to get the or to or the entire course. So I'm coming out with this entire course soon too. So if you wanna have all the templates and everything in ones in one place, then definitely check that out.
Speaker 2:And, I'll let you know when that's coming out. But we before we get into the nitty gritty, I also want to let you know about a podcast and YouTube video coming out next week with Sarah Olivieri of Pivot Ground. She's amazing and she will be talking about creating a blueprint impact statement for your nonprofit or freelance grant writing company. So just what the heck is an impact statement? It's like it's like a mini organized, focused, strategic plan that she can get done with you in six weeks.
Speaker 2:Like, it's absolutely amazing. I love it. She talks about it at length in the podcast, so you can definitely listen to that, or you can watch it on YouTube. So we have migrated a lot of our our YouTube videos into our new YouTube channel, which is grant writing funding, so it all makes sense. So that's definitely there.
Speaker 2:So please subscribe if you are more of a watcher. You know, like, if you like to watch videos, then definitely check that out as well. But, yeah, she's awesome. It was super cool to meet her online today, and she went into detail about how to prioritize your time and analyze the capacity of your nonprofit as well. I mean, it was such a great conversation, and I know you will get a lot out of it.
Speaker 2:It was just super informative, yet she's funny, and she just, you know, really could explain things very well. Yeah. So anyways and oh, yeah. It's just also giving away a free time management downloadable. So it's very, very cool.
Speaker 2:So please watch out for that next week. And I also wanna I'm you know, if if you noticed the last few podcasts, I've been jumping in some testimonials because I really wanna I'm feeling the love, you guys, and I wanna share that. So I do wanna, share a quick testimony from one of our founding beta members in the online membership, and that's Joyce Bailey. And she says, the beautiful thing is I can listen learn review while I'm working so thank you for all you're putting out. So I just want to give a big shout out to one of my founding beta members, and that is Joyce Bailey.
Speaker 2:So I really look forward to our convert our phone consultation next week as well. And if you would like to be a founding beta changemaker member to the grant writing and funding online membership, I have extended the beta price of $27 per month, so you'll be locked in for life until May 15. And you will also get a bunch of bonuses, including the free one on one, consultation with me, just like I'm having with Joyce next week, and a couple other secret things. Alright. So you can just visit grantwritingandfunding.com and click on membership and put in your coupon code beta b e t a to get that discount.
Speaker 2:So yeah make sure you can take advantage of that and get in with a price is only $27 a month. Alright. So let's get into the bylaws. Alright. So you know your bylaws are like individual laws now, right, since we just talked about that, but what do these laws do?
Speaker 2:Your bylaws can help organize meetings, establish policies for holding elections, and establish other procedures for your nonprofit. We discussed this somewhat in the articles, but in this section you want to break it down more. Imagine you're a board member and you've just been elected to a board. You can literally just look at the bylaws, open them up, and you should know all about your role and your expectations about being on the board. Alright.
Speaker 2:So you wanna have these. Right? So let's go ahead and get into it. So let's look at the first thing. My first secret to not leave out of your bylaws.
Speaker 2:Number one, include the number of board members. The number of board members is recommended to be an odd in case of a vote, right? So and we talked about this in your articles too, but having no less than three members and no more than 15 is typical, but do check your state requirements. Number two: offices and roles. Describe each office seat, chairman, vice chairman, secretary, treasurer, and so forth, and their specific roles.
Speaker 2:Who's taking the minutes of the meeting? Usually that's the secretary, so you want to include that under that. Who's overseeing the financials? That's usually the treasurer, so you want to point out what they're responsible for. This means every time you have a new person come into one of these office seats, they will know exactly what they are responsible for.
Speaker 2:Does it sound simple? Yes. Do I see this left out often? Yes. Number three: general responsibilities of the board.
Speaker 2:Alright, so you do want to include in here for all board members, not just the office seats, but for all board members, what their general responsibilities are and they to they have the duty to hire, fire, appoint officers, agents, or employees of the organization. Right, so they do have that responsibility and that duty. Number four: Duration of elected seat. Here is where you're going to put in the length of serving on the board, and I recommend at the very least to have staggered elections. This is great if you have at least two year terms, So virtually every year you're holding elections, but half of the members stay on and half are new members that come in the door.
Speaker 2:In this way there is consistency. But there is nothing wrong if you hold the duration of board longer than two years either. I mean, I've heard some people argue even, like, a board member could be on for life. As long as you have a removal policy, I don't see anything wrong with that. Because if you have a super passionate, committed person that is willing to invest their time and really lead your nonprofit, then you don't really wanna just like, oh, it's been two years.
Speaker 2:Get out of here. It's been a year. You know? So there's definitely ways that people can stay on longer. It doesn't have to be only two years or only one year.
Speaker 2:But definitely, I I do recommend don't do just one year elections, do at least two year so then you can have staggered time. Five. Including a non compensation policy for your nonprofit board of directors is advised. However, you can include a reimbursable clause for something like gas money to meetings, lunch for meetings, or other board related activities. So definitely include I mean, some people do pay their board members, but that's usually more for profit, and nonprofits are usually not recommended to pay their board.
Speaker 2:Right? So definitely but you like I said, you can have a reimbursable clot as well. So it is nice to, like, feed your board members when they're meeting for their lunch meetings, you know, that sort of thing. Sorry if you hear rustling in the background. My daughter's she's getting chocolate.
Speaker 2:So she, like, came over and, like, hold hold up the Godiva chocolate bag. Bag so she is getting that out right now. Alright so number six, conflict of interest. So you want to have a non conflict of interest policy and having this is basically a clause that board members will recuse themselves rescue they will recuse themselves from voting on any potential conflicts of interest. This is vital.
Speaker 2:Alright so why is this vital and what are these conflicts? So you may be the chair of the nonprofit and your husband maybe he's the executive director of the nonprofit, so it's highly recommended that you do not vote on his salary increase, right? In some cases bylaws even restrict blood relatives from serving on the board when they have blood relations or spouses serving on the executive team of the nonprofit. Right? Because there is definitely a conflict.
Speaker 2:Other but at the same time well, let me go into that in just a second. Other conflict of interest include not having, blood or marriage relationships sit on two or more seats of the board as they may have over representation. So husband and wife both on the board, and then there's, like, one other person that's not related, then they might get overpowered. So like metaphorically but anyways another item could be that board members have businesses and submit a bid for a contract to the nonprofit so it is really important to have this conflict of interest policy then state that any board member with a conflict be transparent and if they are directly involved recuse themselves from voting and not being in the room during that vote. Does that seem drastic or unrealistic?
Speaker 2:This actually happens quite often. Notice that many nonprofits start up with a small circle of people who have similar passions, and this is where I was getting to earlier. These are often family members. Right? You guys you guys both might be really passionate about starting this this nonprofit.
Speaker 2:Right? Because you have another family situation maybe. Right? Like, I have a really good friend who has she's starting up a type one diabetes nonprofit because her daughter has type one. So, of course, her husband's super involved in it as well.
Speaker 2:Right? And this is very, very common. Like, it starts up with family members. But the thing is is really, you know, if you you wanna kinda look at this long term. Right?
Speaker 2:So maybe in the beginning, maybe your founders were related, but as you move on, you wanna have some kind of clause that, you know, has some kind of transparency. And even if that does happen, because this this is the reason why it's here. Right? There are going to be conflicts. You can't be free of conflicts entirely.
Speaker 2:That's not really realistic. So you wanna have something in there that you're like, well, we're transparent. And when it does come up, this is what we're going to do. So, basically, they're saying, okay. If if something does come up and and there is a conflict, then you recuse yourself.
Speaker 2:You lease leave the room when there's a vote. And why would you leave the room while there's a vote? Well, it would be kind of awkward if you're in the room and people are trying to vote on something. So and I see this a lot. Even at one of the boards that I'm on, we have this where currently there's a lot of people that are also on the board but they're bidding for a job under the nonprofit so they're not in any of those talks.
Speaker 2:They're not at the meetings when there's a vote. You know, they're they recuse themselves and they're very transparent that they're the ones who are bidding. So it's it is one of those things that people either say, no. We're not gonna allow people, like, board members to bid on anything. That's just not gonna be what we do because we don't wanna have any kind of even, you know, we don't want it to look even shady at all, or they just say, we're going to lay it out very clearly that if this does come up, then this is what needs to happen.
Speaker 2:Recuse and leave the room. So there those are definitely some things, but you need to have this. And this is the main thing, this is why I'm going on and on about this one, this is the biggest one and this is the one funding sources and grant funders are going to be looking at saying, do you have a conflict of interest policy? And when you say, yep, and it's in our bylaws, and you can grab this snippet, does it need to even be long, just a couple of paragraphs at the most really, and then you can give it to them and they will be super happy because they they know that they that you're prepared basically. Right?
Speaker 2:Okay. So moving on. Number seven. Number of meetings. All board members are required to attend meetings.
Speaker 2:But how many? Do they have to be in person? A simple way to address this in your bylaws is to include the percentage of meetings that your board members are required to attend and also that electronic presence is accepted if you accept it. Right? In this way, a board member and I say go ahead and just use it in our day and age, like, include it.
Speaker 2:Right? I mean, maybe you you're gonna require physical presence, but I just think the way that everything is right now that just to include electronic presence is very important because a board member who is traveling may be able to attend the meeting via Skype or Zoom, right, or through some other means. Or maybe you could have a board member from another city or state or even country and they can attend electronically. So it just kind of opens up that flexibility and so you can have quorum and that sort of thing, so to move your your nonprofit forward. And the percentage of meetings required to attend is super important, otherwise, is no accountability.
Speaker 2:So how many meetings do they even need to attend? And I see typically this is 75% of the time. Right? They say, okay, need to at least attend 75% of the meetings that we're going to be holding throughout the year, that sort of thing. Okay.
Speaker 2:Number eight, types of meetings. And I'm going to talk about a couple different types, but we're first going to talk about regular meetings. Do you have regular meetings? And I recommend quarterly at the bare minimum, but ideal is monthly. So just imagine if you only have quarterly meetings and someone misses one of those meetings, right, they only have to attend 75% so they could miss one.
Speaker 2:Well, they're essentially missing six months. Right? So, I mean, it's definitely like if you only have one, you know, every quarter and they miss one, it's like they've been gone for a long time. So and then they've only attended three throughout the year, so how much work can you really get done with three meetings, right? So you really want to look at that.
Speaker 2:Another type of meeting number nine, annual meetings. An annual meeting is generally when boards have their elections for the board of director offices, report on activities of the organization, and get prepared to outline strategies, goals, and projects for the upcoming year. I recommend to keep this on a specific day rather than a specific date. What do I mean by this? Something like have your annual meeting the Tuesday at four p.
Speaker 2:M. After Thanksgiving. Right, so dates change every year but days stay solid. So if you said every year we're gonna have it November 24, well, that's gonna be a different day. Right?
Speaker 2:It's gonna move throughout the year on what day that is. And you already know the best day and time that a majority of your board members can meet, so keep at a consistent time where you know the most board members can show up and a day that is relatively easy to remember. One of the boards that I am on likes to hold our annual meeting on a minor holiday where we know that everyone will be off work, but it's not like a huge family holiday. So that's what we do is like okay that Friday and we always know it's going to be on a Friday because that's when they have the holidays on a Friday we're able to meet. So something like that where you can like okay we're gonna remember this is some a time when we can all get together.
Speaker 2:Alright number 10, special meetings. So you have your regular meetings and then you have your annual meeting and now you have a special meeting and these you just want to have it in your bylaws that point out that you can include that a special meeting may be called from time to time and who is able to call the meeting. So often this is the chair or the executive committee that sort of thing. Just including this so if you want to hold a special meeting if something comes up or all of a sudden you want all your board involved because there's a big event coming up then you just want to make sure that you have the ability to do this. Number 11, so now we've talked about all of these meetings, the notice of meetings, how are people going to find out and remember when all these meetings are?
Speaker 2:So it is vital that all your board members are reminded of meetings just include in your bylaws how much in advance you will give notice, who will give notice, and in what forms I. E. Email, electronic, etc. The secretary notifying members two weeks in advance is typical and this way it is clear who needs to remind everyone and that there is a notice sent out. So I've seen more and more of this switch to WhatsApp groups and that's absolutely fine as long as your bylaws say that it's okay.
Speaker 2:And this also gives the secretary that oh okay I know that I have to remind, you know, everybody two weeks before the meeting. Okay. Number 12, quorum. Having quorum means that there are enough members present at your meetings to make decisions. This is typically at least 51%, but can also be dictated by your state requirements.
Speaker 2:So you do wanna check your state. But basically you don't want to have only two members of a 12 member board show up and make a decision on hiring the executive director or something like that. Right? Like it also encourages what I like about quorum too is it also encourages members to show up because it is a bit annoying for the people who do take the time out of their day to go to the meeting and then not to be able to have an official meeting and move forward on mission. So you want to make sure that, okay, now that we know so many people have to show up to meetings.
Speaker 2:Right? This is a little bit different, so don't be confused on that. So maybe if everybody came, you know, ever let's say everybody except for two members missed one meeting, but they still attended all the rest of their meetings. Right? So they still got their 75% or whatever more that they've attended the meetings, they all missed the same day.
Speaker 2:So all of a sudden you don't have quorum on that day, so really you don't even have a board meeting, an official board meeting. So you wouldn't want those two members to be able to make all the board decisions because there's not enough board members to have that authority. So that's how it's different. Alright. Number 13.
Speaker 2:We're almost there guys we're almost up to 14. Number 13, fiscal. Make sure you include the fiscal year of the board. Does your board follow a calendar year, I. E.
Speaker 2:January to December, or maybe you follow the government, the federal government's fiscal year October to September. I've seen both ways work entirely fine for nonprofits, but you need to know when you're in close out the books and reopen. So state this in your bylaws, otherwise no one's gonna know when are we supposed to start and stop our fiscal year. Okay? That's really important.
Speaker 2:And number 14, finally, this is very simple, amendments. Include a clause that these bylaws can be amended if desired and what the process is. Be sure to include what the quorum vote of the Board of Directors is required to amend the bylaws and if there is any further process like we need at least two thirds of our members to agree on this and there to be quorum. Right? So that's basically it, very very simple.
Speaker 2:Of course these are not the exhaustive list of bylaws step by step everything that you need for bylaws but these are my top recommendations to include. So if you want a checklist of these items, please visit, www.grantwritingandfunding.com/bylaws to get your free downloadable for the checklist. Alright, guys. So I will see you next week when we listen to Sarah Olivieri discuss the impact statement and talk about, like, time management and all this really cool stuff. Anyways, you guys are gonna love her.
Speaker 2:And by the way, we are getting back on schedule next week, so please check your podcast earlier in the week. I will be getting that out. Alright, guys. So I hope you enjoyed your week, and you have a fabulous weekend. Alright, guys.
Speaker 2:I will talk to you soon. Bye bye. Do you wanna join the changemaker tribe and get courses, downloadable checklist, samples of awarded grants, grants, behind the scenes live Q and A with myself and the tribe, and discounts on grant services. Be sure to join the Changemaker membership at www.grantwritingandfunding.com/membership.
Speaker 1:Thank you for listening to this Grant Writing and Funding podcast. I hope you've enjoyed your time. For more questions, email Holly at hollygrantwritingandfunding dot com or visit www.grantwritingandfunding.com.
