Nonprofit bylaws: What they are, why they matter, & how to write them

Having difficult conversations early on is one of the smartest moves you can make when starting a nonprofit organization. One day, you may need to call an emergency meeting, remove a board member, or debate a potential conflict of interest. 

To set your organization up for success, you need to agree on how you will handle these situations before they happen. That's where nonprofit bylaws come in. Below, we explain what nonprofit bylaws are, what they should include, and how to write them. 

Please note: This article is meant for informational purposes only, and should not be taken as legal advice. 

Key takeaways

• Protective measures ⛑️ Nonprofit bylaws provide solutions for future conflicts 
• An IRS must-have ✅ Bylaws are required for nonprofits applying for tax-exempt status
• Roles and responsibilities ✍️ Set up your board structure, elections, and even meeting formats well ahead of time
• Conflict will happen 💥 But you can be ready with clear guidelines and policies in place

What are nonprofit bylaws, and why do they matter? 

Nonprofit bylaws are a legally binding written document that determines how your nonprofit is run. Put simply, they act as the main governing document for your organization. 

Within your bylaws, you grapple with important issues, including:

• The rights and responsibilities of your board members
• How conflicts are resolved
• The rules for voting procedures
• What qualifies as a conflict of interest

Bylaws help resolve internal disputes, elect (or even terminate) new board members, and provide direction on how an annual meeting of the board of directors should be conducted.

With that said, bylaws aren't just a "nice to have" document for a scaling nonprofit—they're actually a legal requirement to file for tax-exempt status. When you file for 501(c)(3) status as a charitable organization, the IRS will ask you to include a copy of your organization's bylaws as part of your articles of incorporation. 

Note: Since your bylaws are a legal document, the IRS offers sample language that should be included within your tax-exemption application. Therefore, when developing your bylaws, it's always best practice to partner with an attorney or accountant. 

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What should you include in your nonprofit bylaws? 

Every nonprofit organization is different, and therefore, your bylaws will vary depending on your sector, organization size, state laws, and specific needs. However, there are a few items that should be included within the bylaws of nearly every tax-exempt organization, including the following six sections. 

1. General information 📌

To start off, you'll need to provide a broad overview of your organization. This includes: 

• Name and location: Write the name of the corporation, and your physical address.
• Statement of purpose: Describe the purpose of your organization (e.g., literary, scientific, charitable, etc.), as described on your IRS form.
• Mission: Write the mission of your organization. (Note: Do not include your annual goals, as they will change each year and will thereby require an amendment to your bylaws.)

2. Leadership roles, terms, and elections 💁

Even if you're a tight-knit, scrappy operation now, your nonprofit will likely grow over time. As you grow, you will add new board members and officer positions to your org chart.

To help determine the roles and responsibilities of all board members, as well as how these new roles are assigned, be sure to cover the following: 

• Voting procedures: How will you elect new board members or executive roles? Be sure to include language for requirements for an election to take place (e.g., 50% of your voting members must be present for an election to take place), what qualifies as a majority vote, what you do in the case of a tie, or how you will call for a special election in the case of a position vacancy. 
• Term limits: Determine whether you will have term limits for elected positions. In addition, determine how long each position will be served (e.g., Two-year terms for board members).
• Responsibilities: Prepare every board member by outlining their roles, responsibilities, and annual commitments for their position.
• Indemnification: Help protect your board members from risks. It's a statement that limits board members' personal liability if your organization comes under legal scrutiny. 

3. Conflict of interest policy 🙅

Every organization should include a conflict of interest section within its bylaws. To develop this section, review the language provided by the IRS.

According to the Internal Revenue Code, a registered 501(c)(3) organization cannot benefit the interests of one private shareholder—whether it be the vice president of your nonprofit, a member of your nonprofit board, or a recurring donor.

To prevent a conflict of interest from taking place, be sure to include the following: 

• Examples of conflict of interest: Provide a list of examples that would qualify as a conflict of interest, and how these would be addressed.
• Disclosing personal interests: Outline how staff or board members should inform leadership about a personal conflict of interest. In addition, provide language on how a board member could give up their voting rights on certain matters where they might have a vested interest.

4. Board meeting guidelines 📃

Each year, your board will conduct regular meetings. These annual meetings will discuss fundraising initiatives, annual goals, and strategic planning for the year ahead.

Your bylaws should outline how these meetings should be conducted, including: 

• Frequency: How often will you schedule regular meetings? In addition, provide language on how, when, and why a special meeting could be called by an executive committee member.
• Quorum: Your quorum is the minimum number of directors that must be present in order for a meeting to take place.

5. Bylaw amendments ✍

As with any legally binding document, your bylaws will evolve at some point. To help ease these transitions, include language that shows under what circumstances a bylaw amendment should take place, such as: 

• Majority vote: Record what percentage of votes is required in order to pass an amendment. 
• Meeting requirements: Determine whether a bylaw amendment vote can take place at a regular board meeting or if a special meeting is required. 

6. Dissolution of the organization 📝

Unfortunately, not all nonprofits last. Therefore, most nonprofit corporations are required by law to include a dissolution clause in their bylaws. This statement outlines how assets will be distributed if your organization ceases to exist. This statement should include: 

• Distribution of assets: This IRS requires your assets to be distributed for a charitable purpose if you dissolve your organization. Therefore, think of what types of organizations you might want to donate any existing assets to.
• Distribution of assets to the government: If you do not distribute assets to a tax-exempt organization, your assets will be distributed to the state, local, or federal government—not a private individual. 

Set your nonprofit up for long-term success with Givebutter 

Your nonprofit bylaws are a legally binding document that helps determine how your nonprofit operates. Not only will this help resolve conflicts, elect new board members, and schedule board meetings, but it's required under federal law for tax-exempt purposes.

Givebutter is the all-in-one platform that helps scaling nonprofits get off the ground. With your fundraising, donor management, and engagement tools under one roof, you pay $0 when optional donor tips are enabled—backed by the Givebutter Guarantee. 

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Frequently asked questions

How often should our nonprofit review or update its bylaws?

It’s best practice to conduct a formal review every two to three years. As your organization grows, your initial startup bylaws may no longer fit your operational reality. Regular reviews ensure your governance rules align with current state laws and that your board is actually following the procedures you've committed to on paper.

What happens if we violate a rule in our own bylaws?

Violating bylaws can lead to "voidable" actions, meaning decisions made (like electing an Executive Director or approving a contract) could be legally challenged and overturned. 

Persistent disregard for bylaws could potentially jeopardize your D&O (Directors and Officers) insurance coverage and, in extreme cases, threaten your tax-exempt status if the violations lead to misuse of funds or lack of oversight.

Do we need to file our bylaws with the IRS or the state?

You typically submit your initial bylaws to the IRS when applying for 501(c)(3) status. While you don't usually need to file every small amendment with the IRS immediately, you are required to report significant changes on your annual Form 990. At the state level, requirements vary, but most states do not require you to file updates unless they change your fundamental corporate purpose.