The By-Laws: The Rules of the Game for the Work of the Non-Profit Organization
Over the past few months I have discussed various aspects of the workings of the board of directors and committees of non-profit organizations. There has been an exploration of specific functions and guidelines have been offered for the prescribed workings of the professional staff and the volunteer lay leaders who do the work of the organization. More often than not, questions are raised about how to structure the work of the non-profit organization. In other words, who does what and how do they know what they should be doing?
Actually the answer is simpler than one would think. The non-profit organization’s structure is determined by the rules of the game, otherwise know as the “By-Laws”. The “By-Laws” of an organization should be as brief as possible and at the same time should encompass the ways decisions are made and who takes responsibility for what decisions. Yes, it is a legal document and no, it does not have to be written in professional “legalese”. It should be something that is broad but focused and deals with governance and the decision-making process and not with policy.
By-Laws are usually composed when the organization is founded and of course, there are times when the By-Laws are rewritten or amended. This usually follows a planning process and is a result of structural changes that are made as an organization decides to change its direction or expand its functions. Although a non-profit usually does not change the By-Laws every month there is no reason that amendments cannot be made as the organization grows and matures to meet new challenges and different needs in the community.
The major items included in the By-Laws are: The Name of the Organization; Purposes; Definition of Membership; Required Meetings; Rules for Voting; Defining the Board of Directors; Listing of Officers and Their Responsibilities; Defining Permanent Committees and provision for Ad Hoc Committees; Dues (if appropriate); and the process of adopting amendments. These are general categories and every organization adapts the document to meet their individual needs. The most important aspect of the By-Laws is its ability to enhance the governance process of the organization and to enable the non-profit to make decisions in an effective and efficient way.
If the By-Laws do not enhance the organization then it is time to review them and possibly amend them. If they are not making life easier for the professional staff and the members of the board of directors and the committees then it is a signal to establish a By-Laws committee to examine them and to determine whether they continue to be relevant or whether they should be amended or rewritten. This process, in and of itself, has the potential to renew and strengthen the board of directors.
In general raising questions about the role of the organization’s officers and the committee structure enables the leadership to confirm or perhaps, redefine how the governance process is implemented. Often this form of voluntary self-study works to re-engage the leadership in their commitment to the organization and their involvement in the board of directors. It provides the opportunity to examine what the functions of the committees of the board are and how they are fulfilling their responsibility in line with the needs of the non-profit organization.
The By-Laws provide the framework for the engagement of volunteer leadership and the framework for making important policy decisions. The By-Laws do not deal with the policies of the organization yet they set the stage for how the policies will be determined through engaging the board members and committee members in studying and discussion issues that lead them to determine the policy that govern the services provided by the non-profit organization. For example, the board of Community Beit Midrash might have a scholarship committee and the By-Laws would define the committee’s purpose, membership and frequency of meetings. It would then be the responsibility of the scholarship committee to decide on the policy regarding the awarding of scholarships to students. The By-Laws would not state the specific policies guiding the awarding of scholarships.
Although there is a tendency to see the By-Laws as something that “lawyers handle” it is really a tool for the staff and the lay leadership of a non-profit to strength the functioning of an organization. If there is a sense among the staff and volunteers that the By-Laws are not performing this function then it is time to take them out of the file and rework them so they work more effectively in facilitating the governance process of the organization.
Stephen G. Donshik, D.S.W., is a lecturer at Hebrew University’s International Leadership and Philanthropy Program and has a consulting firm focused on strengthening non-profit organizations and their leadership for tomorrow. Stephen is a regular contributor to eJewish Philanthropy.