Omar Bennett
Bylaws and constitutions are both governing documents that outline the rules and procedures of an organization. They are often used interchangeably, but there are some key differences between the two. Constitutions typically cover the fundamental aspects of an organization, such as its name, purpose, structure, and procedures for amendment. On the other hand, bylaws are more focused on the day-to-day operations and policies of an organization, including rules and procedures for conducting business. While some organizations may choose to have separate constitution and bylaw documents, it is now recommended that they be consolidated into a single instrument, simply called bylaws. This consolidated document provides a clear framework for effective governance and eliminates guesswork, ensuring smooth and efficient operations.
| Characteristics | Values |
|---|---|
| Number of documents | Three options: constitution only; bylaws only; or both |
| Purpose | To outline the rules relating to an organization and how it functions |
| Rules | Include name, head office, purpose, size of the board, number of officers, annual meeting requirements, fiscal year, definition of members, etc. |
| Amendments | Previous notice + 2/3 vote or a majority of the entire membership without notice |
| Legal standing | Bylaws are a legal document and the organization could be challenged in court if it violates them |
| Length of validity | Long-term, but should be amended to reflect changing circumstances and realities |
| Who can help? | An attorney or a professional services firm |
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What You'll Learn
Consolidating the constitution and bylaws
The constitution and bylaws are documents that contain the basic rules relating to an organization. While it is not improper for unincorporated societies to have both a constitution and bylaws as separate documents, it is recommended that they be consolidated into a single instrument, usually called the "bylaws". This consolidation reduces duplication and inconsistency and results in a more understandable and workable set of rules.
To consolidate the constitution and bylaws, the first step is to create a new document that combines the rules from both sources. This consolidated document is then referred to as the "bylaws". However, it may still be called the "constitution" or "constitution and bylaws" by some groups, even when it is the only governing document.
It is important to note that the process of adopting the consolidated bylaws may be more complex. Seeking assistance from experts in nonprofit matters, such as attorneys or professional services firms, can be beneficial. These experts can help ensure that the consolidated bylaws are properly structured and aligned with the organisation's needs.
Additionally, it is crucial to involve the board in reviewing and providing input to the consolidated bylaws. All board members should familiarise themselves with the provisions and understand the importance of proper governance. Amendments to the bylaws should be made when necessary to reflect changing times and circumstances, ensuring that the document remains relevant and effective for the organisation's governance.
By consolidating the constitution and bylaws, organisations can streamline their governing documents, improve clarity and consistency, and establish a strong foundation for effective work. It is a process that promotes good governance and helps eliminate guesswork, ensuring that all members are aware of the rules and regulations that guide their operations.
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Amending the constitution and bylaws
The process of amending a constitution and bylaws can vary depending on the specific organisation and its structure. However, there are some general guidelines and best practices to follow when making changes to these important documents.
Firstly, it is essential to understand the difference between a constitution and bylaws. The constitution is a document that outlines the fundamental principles and rules of an organisation, and it is usually more difficult to amend. On the other hand, bylaws are the specific rules and procedures that govern the day-to-day operations of the organisation and are typically easier to change. In some cases, the constitution and bylaws may be combined into a single document, usually referred to as the "bylaws."
When amending the constitution, it is crucial to follow the procedures outlined in the document itself. In the case of the United States Constitution, for example, Article V provides the authority to amend it. Amendments may be proposed by Congress with a two-thirds majority vote in both the House of Representatives and the Senate, or by a constitutional convention called for by two-thirds of the State legislatures. Once an amendment is proposed, it must be ratified by three-fourths of the States (38 out of 50) to become part of the Constitution officially.
Amending the bylaws typically involves following the rules and procedures outlined in the document. It is important to note that each organisation may have its own unique process for making changes to its bylaws. In general, the board or governing body will propose changes, gather input, and then put the amendment to a vote. It is essential to ensure that the language used in the amended bylaws is consistent with the rest of the document and that a record of the changes is kept. Additionally, it is crucial to ensure that any amendments do not conflict with state laws or include practices prohibited by law.
To summarise, amending the constitution and bylaws requires following the appropriate procedures, obtaining the necessary votes or approvals, and ensuring compliance with any relevant laws or regulations. It is a process that requires careful consideration and input from the members of the organisation to ensure that the changes are made in a fair and transparent manner.
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The difference between a constitution and bylaws
A constitution is a governing document that outlines the fundamental rules and principles of an organization, corporation, or society. It serves as a legal framework that governs the operations and activities of the entity it pertains to. In the case of a local league constitution, for instance, it covers items such as membership, election, discipline, finances, and more. It remains in force until it is amended, which may occur due to changes in a higher governing body's constitution, such as a national constitution.
Bylaws, on the other hand, are the governing regulations that detail the internal affairs and day-to-day operations of an organization, corporation, or society. They are created to manage and operate specific programs or departments within the larger entity. Bylaws cover the operational rules and policies necessary for the routine functioning of the organization. For example, bylaws for a local league may include the tournament team selection method, local rules, and age structure.
While a constitution provides a broad framework, bylaws go into the specifics of how an organization will be run. Constitutions are more permanent and are only amended when necessary, whereas bylaws are typically reviewed and approved annually or every five to ten years to ensure they remain current and relevant.
The relationship between a constitution and bylaws can be understood through the example of dues or membership fees. The bylaws may state that unit dues will always be a certain amount more than the national dues. However, if the exact amount of unit dues is specified, it would be included in the Standing Rules, which are more specific and process-focused than the bylaws. Standing Rules can be adopted, changed, or suspended by a majority vote, providing flexibility in the governance of the organization.
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The importance of bylaws for nonprofits
Bylaws are also crucial for risk management and consistency within the organisation. They outline the operating rules and procedures, including the election process for board members, board meeting guidelines, compensation disclosures, indemnity clauses, and more. It is important to note that bylaws are legally binding and are a requirement for incorporation. Failure to follow the bylaws could result in legal consequences for the organisation and its board members.
Additionally, bylaws raise the level of accountability, transparency, and effectiveness of the nonprofit organisation. They should be relevant and reflect the changing times and circumstances of the organisation. While they do not have to be publicly accessible, many organisations choose to share them to increase transparency and trust with donors, constituents, and supporters.
When drafting or amending bylaws, it is recommended to seek assistance from a qualified professional experienced in nonprofit matters, such as an attorney or a professional services firm. However, it is ultimately the board's responsibility to provide input and vote to adopt the final product. It is also important to note that bylaws should not be too specific, as they need to allow for flexibility in day-to-day operations and accommodate the unique needs of the nonprofit.
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Reviewing and updating bylaws
Bylaws are a legally mandated instrument that functions as a high-level rulebook for governance, helping to ensure adherence to an organisation's mission and proper stewardship of its assets and resources. They are a formal set of rules that govern an organisation, outlining topics like the group's purpose, membership requirements, and guidelines for conducting meetings and voting.
As an organisation grows or changes, its bylaws should be updated to reflect its current circumstances. Bylaws should be reviewed periodically, at least every three to four years, and updated as necessary to ensure compliance with federal and state laws. Outdated bylaws that are not revised for a long time may be violated as they are not adapted to current law requirements.
The process of reviewing and updating bylaws typically involves the following steps:
- Research requirements: Understand what your state requires in terms of bylaw content and any instructions for updating bylaws.
- Assemble a committee: Form a committee, typically consisting of two to three board members, to review the current bylaws.
- Compare with industry standards and laws: Compare the current bylaws with industry models, templates, and governing standards of similar entities. Ensure compliance with local, state, and federal law requirements.
- Identify member prerogatives: Determine which member rights are outlined in the existing bylaws and which are required by law, long-standing custom, or culture to be retained.
- Draft amendments: Work with a working group, which may include a general manager, board members, and legal counsel, to draft amendments, rules, and policy changes.
- Review for consistency: Present the draft amendments to the governing board for evaluation of consistency with custom, traditions, and marketability.
- Seek member input: Obtain feedback from focus groups of members and make changes as necessary to accommodate their input and enhance the likelihood of passage of the amendments.
- Formal member approval: Notify members of the proposed changes and provide a clear and convenient way to cast their votes. Ensure that any established timelines and voting procedures are followed.
- Notify relevant agencies: Once the amendments are approved, notify the IRS, update state registrations, and file an amendment to the articles of incorporation.
- Archive and store: Archive the original bylaws to avoid confusion and store the updated bylaws in cloud storage and as a paper copy with other important documents. Send a copy to any required state or government agencies.
It is important to note that the process of reviewing and updating bylaws may vary depending on the organisation and applicable laws. Seeking legal counsel throughout the process can help ensure compliance and avoid potential complications.
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Frequently asked questions
A constitution is a governing document that outlines the basic rules of an organization, including the name, head office, purpose, size of the board, number of officers, and annual meeting requirements. Bylaws are a set of rules and policies that govern the day-to-day operations and management of an organization, and they must be approved annually.
Some organizations have one or the other, or both. It is recommended that these rules be combined into a single instrument called the "bylaws," although some groups may still refer to it as the "constitution" or "constitution and bylaws."
All board members should review the bylaws at least annually to prevent costly errors and ensure effective governance. New board members should be provided with a copy immediately.
