Nonprofit Bylaws: What They Are, How They Work & Why You Need Them

A lot can and has changed in the past few years, especially after the pandemic. Now, many organizations are wondering how to create or update their nonprofit bylaws to reflect their current needs.

In this episode of the Strategic Nonprofit Podcast, join host Trista as she meets with the CEO of AMC NPO Solutions, Tom Abbott, to discuss everything organizations need to know about developing effective Nonprofit Bylaws. That’s why below, we’ll be exploring what nonprofit bylaws are, how they work and why you need them for growing a successful organization.

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What are Nonprofit Bylaws?

Nonprofit Bylaws are lengthy documents that outline your organization’s general operational rules. Overall their purpose is to guide board members, staff and volunteers on how to conduct themselves daily in the association.

For example, bylaws can be about:

  • Categories of membership
  • Rules for member meetings (including the Annual General Meeting (AGM)
  • Rules for board meetings
  • General duties of Directors

Why is it important to review Nonprofit Bylaws?

Chances are, your bylaws are outdated, especially after the COVID-19 pandemic. Much has changed, and you probably haven’t had a chance to review them for years.

Unfortunately, this means they may reference out-of-date technology like fax machines, neglect to structure virtual board meetings, use the word ‘he’ throughout generally don’t reflect the latest provincial and federal requirements.

That’s why it’s necessary to review and update your bylaws regularly.

When to update your Nonprofit Bylaws

Most boards haven’t actually reviewed their nonprofit bylaws since incorporation. That’s why we suggest organizations ideally should take a good look and review nonprofit bylaws every two to three years. However, if you’re still not sure if it’s the right time to review your bylaws, here are clear indicators it’s time to update your bylaws:

  • Can’t tell if your bylaws comply with provincial and federal requirements
  • Don’t know when your bylaws were last updated
  • You know your nonprofit bylaws still reference outdated technology or terminology
  • Instead of being a helpful tool, they are getting in the way or holding your back

Overall, although there is no official standard for reviewing your bylaws, every two years is the recommended benchmark for ensuring they accurately reflect the organization’s inner workings. As a result, you’ll ensure your nonprofit bylaws remain relevant to what you’re trying to achieve.

Consequences of ineffective Nonprofit Bylaws

Organizations that neglect to update or create effective nonprofit bylaws risk harming the foundation of how their entire organization functions. Doing so puts the board, individual members and the organization at great legal risk. Something that insurance likely won’t cover.

Ultimately, this approach encourages a breakdown in the organizational hierarchy. Creating an environment where any member of the nonprofit is essentially free “to do as they please.” As a result, organizations risk looking like they’re “rigged” or unethical and quickly lose constituents and local community support.

The 3-Step Bylaw Review Process

To get the best results from a nonprofit bylaw review, we recommend our three-step bylaw review process, starting with a detailed consultation to understand the needs and current situation of the organization. Then proceeding to receive our recommendations based on modern best practices and the latest compliance with provincial and federal regulations. Let’s explore how this works in more detail:

1. Intake Consultation

First, we conduct an initial consultation that allows us to understand the needs and advancements in your organization. That way we can help update the bylaws to reflect your nonprofit’s current and most pressing needs. 

2. Bylaw Audit

Next, the bylaw audit process is where we analyze your bylaws including the nominations process, nomenclature, terms of office and more. Overall, we look for items that need to be updated or included. 

3. Final Report

Lastly, we deliver a final report with recommendations for updating bylaws for modernization and compliance. We present this in an easy-to-follow format that allows board members to see and approve the changes we recommend.

Why choose AMC to review your Bylaws?

Organizations engage AMC for Nonprofit Bylaw Reviews because we’re nonprofit specialists, having worked with over 450 organizations across Canada since 1987.

We update the bylaws of multiple nonprofits every year, so you can be sure that we’re up to date on the latest requirements, regulations and evolutions when it comes to bylaws.

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