Nonprofit Bylaws are the rules that established by a nonprofit organization in order to regulate itself. Nonprofit bylaws are written by the founders of the nonprofit organization and have to cover the roles and duties of its members and directors, procedures of electing its higher officers, the process of money distribution, rules and procedures for holding meetings and etc.
Bylaws and Articles of Organization, are the main official documents for an organization, no matter if it is profit or nonprofit. The particular requirements for nonprofit bylaws are set and regulated by the state in which the organization operates. The nonprofit organization usually does not legally exist until its bylaws have not been approved by the Board of Directors. However, anyone can choose to apply different rules in his or her nonprofit organization bylaws, as long as the rules do not violate the person's state law. On the other hand, if he or she decided to follow the state law regarding bylaws of nonprofit organizations, he or she can be sure that all the operating rules of the organization will be according to the law.
Bylaws are not considered the public documents. However, if a nonprofit organization founder makes them easily and openly available, it increases the organization accountability. It encourages the Board of Directors to pay closer attention to bylaws, as well.
When nonprofits bylaws are being drafted for the organization, it is highly advisable to tailor bylaws to meet the organization’s mission and build flexibility into bylaws. In this case, the Board of Directors can always propose and make changes once the organization evolves. It is also important to uphold the organization’s bylaws during any dispute. If the Board of Directors fails to follow the bylaws, it can be held liable for breaching their duty to the nonprofit organization.
Some exempt nonprofit organizations are required to file an annual return and report its name, address, and structural and operational changes on it. Moreover, even if the nonprofit organization is not required to file an annual return, it is allowed to report these changes to the EO Determinations Office. Additionally, some states may require the nonprofit organization to file its bylaws and report any changes made to it.
It is very important to establish the bylaws for the nonprofit organization and properly follow the rules covered there in order to have the effective governance of the organization.