Your California Nonprofit's Board of Directors & BylawsOptimally Structure Your Organization
Your California nonprofit organization is governed by a board of directors in accordance with the law and your governing documents–including your bylaws: the governance rules that spell out procedures and policies for how the board operates.
New founders often make two common but preventable mistakes:
- Choosing the Wrong Board Members
- Using Template Bylaws
Tuple Legal provides experienced legal counsel for new founders who want to position their nonprofit for success, as well as ongoing counsel to established nonprofits who need help staying legally compliant while growing their operations.
Keep reading for an overview of how to avoid common organizational governance issues as you form your organization and grow.
Organizational Governance for New Nonprofits
New founders have a lot of decisions to make. All of them 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.
Together, you and Tuple can lay the foundation for your nonprofit’s future success, taking a thoughtful, comprehensive approach to appointing your founding board members and drafting your governing documents.
Choosing Your Initial Board of Directors
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 can help you understand 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
Why You Need Custom 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.
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, and bylaws with no customization offer only the most basic procedures for how the organization should conduct its business.
Conversely, it can be problematic to draft bylaws that are too specific. Ideally, you want to establish guidelines and procedures for the board, officers, and staff. But you want to preserve room for the officers and staff to establish some policies without requiring a meeting of the board and a change to the organization’s bylaws.
Risks of Using Templated Bylaws
Even more worrisome than operational questions, cookie-cutter bylaws may affect your organization’s ability to function the way you envision. Depending on how drafted, bylaws could seriously jeopardize your ability to lead the organization in the event of future disagreements that emerge between you and other stakeholders.
Online document filing and compliance services do not have the legal expertise nor ability to advise you on these issues; they usually use templated bylaws.
Questions Every Nonprofit Founder Must Answer
Here are some of the topics on which Tuple provides legal advice as you plan your nonprofit’s future:
- 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?
- How are future board members nominated, vetted, and approved?
- How long is each board member’s term?
- What is the maximum and minimum size of the board?
- Will board members receive reasonable compensation for their duties?
- 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 how much notice is required?
- How much of the board must vote to remove a board member?
Tuple will also help you with logistical and fiscal questions such as:
- Will your nonprofit observe a fiscal or a calendar year?
- How will these bylaws be amended as you grow?
- When voting on business transactions, how many members must be present to constitute the necessary quorum?
- What is your conflict of interest policy?
- Do you need a special policy governing receipt of gifts?
- What are the dissolution procedures if the board votes to dissolve the nonprofit?
Send Tuple a Note
Please do not include any confidential or sensitive information in your note. Sending a note to Tuple does not establish an attorney-client relationship.
After Forming: How to Keep Your Nonprofit Compliant
Tuple works with new and established nonprofits on an ongoing basis to help them stay compliant with state and federal law and help update their governing documents.
Bylaw amendments are nearly inevitable as your nonprofit grows and changes. Tuple can draft new bylaws, amend your current bylaws, and clarify the pros and cons of proposed changes for your board and members to consider.
Board members will come and go, whether due to resignation, elections, or termination. Tuple will help guide your nonprofit through these growing pains.
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. The more your group grows, the more guidance you will need.
Meeting Minutes and Agendas
All meeting minutes are memorialized. Tuple can prepare agendas and memorialize meetings for your group.
Tuple can help minimize risk as you start utilizing volunteers by drafting your volunteer policies, procedures, waivers, and applications.
Filing nonprofit tax returns–the dreaded IRS Form 990–is a complex process full of legal nuances. Tuple can save you the headache and let you focus on your organization's work.
Retaining Tuple for New and Established Nonprofits
Whether you are a new founder preparing to structure your nonprofit organization, or an established nonprofit voting on your tenth round of bylaws revisions, Tuple can help keep your organization on track. With legal counsel just a call or e-mail away, your entire board will be free to focus on what’s truly important: your mission and cause.