Should our bylaws spell out our organization’s purpose and mission? Isn’t it helpful to have a clear statement of purpose as one of the first provisions?
This is a matter of personal preference, and it is not illegal to include a detailed purpose clause or mission statement in an organization’s bylaws. I don’t think it is a good idea, however.
Bylaws set the procedural rules for governance. They are not policy statements. In our basic form of bylaws, we simply say that the purposes of a nonprofit organization are those set out in the articles of incorporation. (See Ready Reference Page: “Bylaws Function as ‘Constitution’ of Nonprofit Corporations”) The provision never has to be changed, even when the articles of incorporation are amended.
The bigger reason, however, is that purposes and mission statements morph over time. It seems a waste of time to have to amend the bylaws every time there is a modification of the mission. But if the work of the organization does shift -- to undertake a new program not previously envisioned in the mission statement, for example -- and if the bylaws are not amended to include the new activity, a disgruntled member or director could sue to stop the new venture as unauthorized. We don’t think most organizations will actually amend their bylaws every time they undertake a new program not contemplated in the last mission statement, and don’t see any reason to create the opportunity for such suits. Prevention is the best defense to litigation.
(Looking for more information on bylaws? Plan on joining our webinar Bylaws: The "Constitution" of Nonprofits - The Art and Science of making them Work.)
Comments from our Readers
I don't agree that mission changes can/should happen without charter or bylaw changes. Particularly if the nonprofit has voting members. Of course some nonprofits don't need members, especially if their activity is limited to fundraising. But the word mission implies more than just fudraising; members are not just cash cows, but need to be able to state opinions and to be informed in order to oversee the way in which the nonprofit functions. M.P. - via e-mail
In California, the problem with putting purposes in the bylaws and then having it evolve is more serious, since the Attorney General here imposes a charitable trust on all assets received by the organization, based on any purposes stated in the governing documents at the time of receipt. You can change purposes going forward, but any existing assets are legally restricted to the prior purposes. R.F. via e-mail
Planned giving sounds complicated, with its CRUTs and CRATs, CLUTs and CLATS, and CGAs. It can be incredibly complicated, but it needn’t be. Keeping it simple may be the best way to start a planned giving program for a charity that hasn’t already put one in place.
This webinar offered a review of major planned giving instruments and a discussion of ones that make the most sense to emphasize in starting a planned giving program. It discussed the advantages of integrating planned giving into an existing development program, targeting the best prospects, getting buy-in from the board that is likely to generate results, and setting a structure to make it all happen.
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