Your California Nonprofit’s Board of Directors & Bylaws
Optimally Structure Your Organization
Nonprofit founders often make two very preventable mistakes.
New founders have a lot of decisions to make. Among them: who will be on the board? And what bylaws will guide the organization?
All of these decisions are best made with an experienced nonprofit law attorney who can help you craft a path forward and understand the risks and benefits of your options.
Your California nonprofit organization is governed by a board of directors, in accordance with the law and your governing documents. This includes your bylaws: the governance rules that spell out procedures and policies for how the board operates. These are not mere formalities; they’re vital to your success.
Keep reading for an overview of how to avoid common organizational governance issues as you form your organization and grow.
Mistake #1: Choosing the Wrong Board Members or Structure
Nonprofits must have at least three board members when they form. Many boards have more than the minimum three.
Tuple can’t tell you who should be on your board, but we can help you prevent and navigate important issues, such as:
- Board members’ legal duties to the organization
- Potential conflicts of interest
- Strategic considerations for board structure, helping ensure you are better able to guide the organization in its mission
- Potential downsides to having an inactive board
Mistake #2: Using Template or “Cookie-Cutter” Bylaws
Nonprofit founders should resist the urge to establish organizational bylaws with a one-size-fits-all bylaws template. (Online document filing services often provide cookie-cutter bylaws, which are not custom-tailored to your organization.)
Cookie-cutter bylaws may affect your organization’s ability to function the way you envision.
Depending on how they’re drafted, bad bylaws could seriously jeopardize your ability to lead the organization in the nearly inevitable event of future disagreements between you and other stakeholders.
Our Approach
Tuple Legal provides experienced legal counsel for new founders who want to position their nonprofit for success.
After formation, we provide ongoing counsel to help both new and established nonprofits stay compliant while growing their operations and impact.
Online document filing and compliance services do not have the legal expertise nor ability to advise you on common issues. They also lack practical experience with even the most common nonprofit scenarios:
- Board member disputes & removals
- Conflict of interest policies
- Compensation
- Bylaw amendments
- Dissolution procedures
Together, you and Tuple can lay the foundation for your nonprofit’s future success. We take a thoughtful, comprehensive approach to helping you learn and grow.
Why Do You Need Custom Bylaws?
Planning for a successful future means rejecting cookie-cutter bylaws. Here are some considerations to keep in mind as you draft your bylaws during formation. If you’re a more established nonprofit, Tuple can also help amend and modernize your bylaws.
Bylaws Should Fit
Your organization’s bylaws should be like a good suit – they should fit.
Specifically, they should fit your mission, business plan, and fundraising goals.
Bylaws are the first document your board, officers, and staff will turn to when faced with questions about how the organization should operate. They should serve as a guide for your organization.
Plan for Future Board Members
Few nonprofits keep the same board for their entire lifetime.
Bylaws should specify how future board members are nominated, vetted, approved, and – if needed – removed.
They should also outline your board members’ legal duties to the organization, term limits, and the maximum and minimum size of the board.
Member-Driven or Board-Driven?
Will your nonprofit be member-driven or board-driven?
Is your nonprofit’s leadership determined by a body of members, or by the leaders on the board itself?
What other voting rights should your members have?
We can walk you through the pros & cons to each structure.
Balance Formality & Flexibility
Conversely, it can be problematic to draft bylaws that are too specific.
We can help you preserve room to establish future policies without necessarily requiring a meeting of the board and a change to the organization’s bylaws.
Your bylaws should help you grow, not hold you back.
Conflict of Interest Management
Avoiding and managing conflicts of interest is essential to maintaining compliance with the IRS – and a positive reputation with potential donors.
We can help you implement conflict of interest & gift policies for your board & staff.
Board Meeting Procedures
How often will the board meet? How much notice should be required for board meetings, and how should it be delivered? Who can call a special meeting?
And, of course: how many members must be present to constitute a quorum?