Written by Julie Morris, Guest Author
There are over 1.5 million nonprofit organizations, each with its own unique mission and structure — the latter of which is typically outlined in the organization’s bylaws. Bylaws are rules that govern an organization, and for nonprofits, they are essential to establishing accountability. If you’re exploring the idea of establishing a nonprofit organization, you might not know exactly what to include in yours. Read below to find out what six essential components your bylaws need.
Creating a Structure for Your Organization
1. Identify the governmental structure. There are many structural options for establishing a nonprofit organization, and finding the right one is essential to ensuring its success. Indeed, the Internal Revenue Service identifies 27 different types that you may choose from, and a distinct set of rules governs each. Some nonprofits you may consider include a foundation, a fraternal society, or a religious association. Electing nonprofit status will make it possible to apply for public funding and grants.
2. Articulate the main purpose of the organization. The bylaws should also include a general overview of your organization’s mission. If you’re not sure, you need to consider the cause you’re serving and identify exactly how you further that cause. You should choose a cause that you are truly connected to — and perhaps one that other charities have overlooked.
3. Create a daily management protocol. Yet another important aspect of your bylaws summarizes how your organization functions daily. For smaller organizations, these details may be minimal, but if you plan on employing people and scaling your charity, you need to have a simple plan in place to enable the effective management of staff and logistics.
Establishing Financial Accountability
4. Set up clear financial channels. As a nonprofit organization, both donors and the IRS will scrutinize your finances. You must maintain accountability by setting up clear financial channels to accept donations, manage outgoing funds, and pay staff members. These channels should never mix with any other financial accounts, such as personal checking accounts. It should explicate information on financial dealings in your bylaws.
5. Delegate administrative responsibilities. Besides detailing your handling of finances, your bylaws should delegate administrative duties, such as voting and board meetings. These tasks are an important part of a charity organization’s management, so you should delegate them to a specific staff member or identify yourself as the responsible party.
6. Manage marketing and recruiting. In order to keep your organization up and running, you will need to recruit volunteers and invest in marketing. These tasks often go hand in hand, and one of the best ways to accomplish both is to create an attractive logo that will make your organization memorable. You can use an online logo maker, like Canva, to simplify the process, and you brand your bylaw documents with it when you’re done.
Bylaws Can Set Your Organization Up for Success
An organization’s bylaws are its roadmap. Establishing bylaws is the best way to create an obvious structure for your organization and identify your plans for funding.
Read more here about forming a nonprofit.