3 Ways to Grow Your Nonprofit Through Effective Bylaws

Guest post by Foundation Group

The classic nonprofit struggle of raising funds with limited resources can complicate an organization’s ability to meet its fundraising goals. As a nonprofit leader, you know this means you’ll need to leverage every opportunity to grow your nonprofit.

But before you strategize new fundraising campaigns or marketing ploys, go back to the basics: your nonprofit’s bylaws. These internal operating rules provide a strong foundation for your nonprofit’s growth, especially when they:

• Establish clear governance expectations.

• Maintain operational consistency.

• Allow for adaptability and flexibility.

Aside from their vital role in obtaining 501(c)(3) status, your bylaws can also guide your board’s decisions. Let’s take a closer look at how your bylaws can set your organization up for success.

1. Establish clear governance expectations.

At the heart of every nonprofit is a charitable purpose and a plan to meet that need. To accomplish these goals, the organization’s governance must align with its mission. After all, a nonprofit’s governing leaders are the decision-makers that drive action.

To keep your nonprofit on the right path, establish clear guidelines for leadership and decision-making processes, such as:

• Board member rules. Consider how many people will be on your nonprofit’s board. How will board members be selected and appointed, and how long will their terms of service last? According to eCardWidget, nonprofit boards are the driving force behind both big decisions and the delegation of day-to-day tasks. Your bylaws should explicitly include guidelines for how your board will be structured and how it should approach and delegate decisions to maximize efficiency.  

• Voting procedures. When decision-making for your nonprofit, how will votes be handled? Your bylaws should address what types of meetings can be held, the number of people needed for a quorum, and how many votes will be required to pass an initiative. 

• Establishment of committees. Effective leadership delegates wisely to maximize the efficiency of their efforts. Although your nonprofit may have started with a small group to serve as your board of directors, your leadership team will inevitably need to grow and specialize as your nonprofit grows. Include a provision in your bylaws for subcommittees, giving power to the board for their creation and dissolution so that these teams can be assembled on an as-needed basis without having to repeatedly amend the bylaws.

Your bylaws should also include control provisions that take into account the balance of authority. For example, instead of granting reserved powers to one stakeholder, you might require supermajority votes. That way, you can be sure no one authority figure has significant influence over the organization.

2. Maintain operational consistency.

There’s validity in the saying that practice makes perfect. Once you’ve determined a formula for success, you can continue on that path to carry out your nonprofit’s strategic plan. Your bylaws should provide a clear sense of direction for how the organization will operate. That way, you’ll stay on course by following standardized procedures, such as:

• Bookkeeping. Not only is bookkeeping essential to your nonprofit’s existence, but it can greatly impact your ability to grow since it can guide certain financial decisions.  Determine how bookkeeping data and records will be managed, from board meeting minutes to important financial records. Your nonprofit’s accounting responsibilities are a huge undertaking and will grow in complexity as your nonprofit grows. Whether you hire a nonprofit bookkeeping expert or manage your records in-house, you’ll have concrete expectations for orderly and complete books. 

• Managing conflicts of interest. Having to address a conflict of interest can be a hindrance to your nonprofit’s growth, especially if it interrupts your daily operations and important projects. To smooth over these obstacles, follow the conflict-of-interest policy established in your bylaws. This might include details about how to define and identify conflicts of interest, as well as consequences for violating the policy. 

• Practicing transparency. How does your nonprofit practice accountability with the public? Transparency can increase nonprofit support since your community will be more likely to engage with a credible organization. Your bylaws should clearly define what information and documents are open to the public, as well as any materials that should remain confidential. You might also establish a process for sharing this information with interested parties. 

With a consistent process for important operations, your nonprofit can carry out its strategic initiatives in an organized and smooth manner. 

For example, your bylaws might include a section about bookkeeping that states your organization will keep a record of all actions taken by board directors and committees. According to Foundation Group’s guide to Form 990 filing, recording this information throughout the fiscal year can help ensure your Form 990 filing goes smoothly at the end of the year since you won’t be scrambling to put these details together.

3. Allow for adaptability and flexibility.

If you want your nonprofit to grow, you have to give it the room to do so! Include provisions for amending your bylaws in the future so that they remain flexible with the ever-changing needs of your growing organization. Answer the following questions:

• Who has the authority to propose changes to the bylaws?

• Who will be responsible for approving the changes?

• What percentage of a vote is needed to pass an amendment?

Be sure to include that all changes should remain consistent with your Articles of Incorporation. Any amendments made to your bylaws should enhance your nonprofit’s operations, not compromise its eligibility for 501(c)(3) status. Small adjustments can help your nonprofit pursue new opportunities in the future that weren’t foreseeable when the bylaws were originally constructed.

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The most important way to ensure your bylaws support your nonprofit’s growth is to simply know what’s included! These internal guidelines are official, legal documents that your nonprofit is bound to follow. Your familiarity with them can help ensure you follow them closely and give you the insight needed to adjust them as necessary.

The preceding post was provided by a guest author unaffiliated with DonationMatch. The views expressed within do not directly reflect the thoughts or opinions of DonationMatch.

6 Best Practices for Asking Board Members for Contributions

Guest post by Amy Eisenstein, ACFRE, CEO & Co-Founder of the Capital Campaign Toolkit

When someone joins your nonprofit’s board of directors, they may be expected to give annual monetary donations to the organization in addition to fulfilling their governance duties. 

Securing those gifts can be a source of stress for nonprofit teams, especially because potential strategies can vary widely. Here are a few examples: 

• Including the ask in onboarding agreements when they first join

• Having a “give-get” policy that asks every board member to be responsible for a specific amount of money, whether they give it themselves or get it from other sources

• Asking board members to give a gift of an amount that is personally significant to them 

• Asking for personal gifts of an unspecified amount 

• Discussing board giving in person with each board member

• Tucking a pledge form in the board packet at the appropriate time of year and encouraging members to return them by a certain date

With so many approaches, you might feel like having a specific strategy doesn’t make much difference. However, through our work on many capital campaigns, we have learned that how you approach your board about their annual gifts makes a vast difference in how much board members give and how they feel about their giving.

Let’s explore six best practices for refining your own approach to board member annual giving. 

1. Create a small ad hoc committee on board giving.

The board giving process shouldn’t be driven by staff. That’s a bit awkward for your board members. And unless you have an enlightened board chair who really understands fundraising and how to do it effectively, you shouldn’t just turn the responsibility over to them. 

Instead, your executive director or development director should ask three or four board members to serve on an ad hoc committee to develop and implement a board giving plan. 

The ad hoc group should meet three times over one or two months. The meetings might be organized as follows: 

• Meeting 1: Discuss and agree on board giving goals and the process for presenting the giving process to the board. 

• Meeting 2: Review progress toward the goal and follow up with board members about their gifts. 

• Meeting 3: Review the results of the solicitation process and develop a plan for thanking board members and conducting ongoing stewardship. 

2. Determine a collective board giving goal.

Having a dollar goal for board giving helps board members make informed decisions about what their gifts might be. But because most board members have little or no idea of the capacity of their fellow board members, you must be clear and intentional about the process of determining that goal.

We recommend having your ad hoc committee review the list of board members and, using available information about each person’s giving history and other indicators of giving ability, determine a possible high and low for each member. 

Add those numbers up and you will have a collective giving range for your board. Present those results to the board and invite a discussion to determine a board giving goal.

3. Discuss board giving at a board meeting.

Designate a portion of your next board meeting to discuss board giving to the campaign. Topics to be discussed should include: 

• Relationship of the campaign goal and board giving to annual giving and larger strategic priorities

• Collective board giving goal

• Rate of board participation, with 100% being the ideal

• The process of soliciting gifts

• Deadline for when all gifts should be in

Your goal with these discussions is to get your board thinking about giving collectively. This helps your board members create a sense of accountability among the group and sets everyone up to motivate and encourage one another to meet the collective goal. 

4. Solicit each board member in person.

Following the meeting, members of your ad hoc committee should meet with each board member to make a case for annual giving and discuss the board member’s gift. Each person should be asked to consider a specific amount or a range that is personally meaningful to them. Remember: 100% participation in board giving is ultimately the most important part of the board campaign, even if you have to adjust your goal along the way. 

If it is indeed your policy that each board member has a responsibility to give to (or get for) your organization, be sure to have a plan of action for board members who do not participate in any way. Ideally, this expectation would be set before they join so it is not a surprise.

5. Report on progress toward the board giving goal.

The board chair or chair of the ad hoc committee should track the board giving process and gently nudge everyone to make their contributions before the scheduled deadline. 

They should also send progress updates to the board and push for a timely conclusion to the giving process. Frequent updates will keep the giving goal top of mind and reinforce the important responsibility each board member has to contribute a gift.

6. Celebrate reaching the board giving goal.

Once the board has reached its collective goal and has 100% participation, take the opportunity to celebrate your success! 

For some organizations, that means popping a couple of bottles of champagne after the next board meeting. For others, it might mean something more official. 

You should also recognize the people who served on the ad hoc committee and worked on the board giving process. For example, consider creating special recognition strategies for various roles people played during the board campaign.

Setting the Stage for Success

The way you solicit your board members can set your campaign up for success. If you take it seriously and leverage effective fundraising best practices like the ones above, you can lay the foundation for success for your annual campaign and future fundraising endeavors. 

For instance, when your board feels that giving is important, and when they are solicited in a way that respects them and their generosity, they will feel less anxious about reaching out to your supporters during other campaigns. This will make success with future fundraising initiatives much more feasible. 

If you’re on the board of an organization that is considering a capital campaign, there are a few things you should know. Get Capital Campaign Pro’s free guide for board members!

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Board Member’s Guide to Capital Campaign Fundraising

If you’re on the board of an organization that’s considering a capital campaign, there are things you need to know. This guide will help you understand your own role, and that of the entire board, during a campaign. Download this free guide today!

Amy Eisenstein, ACFRE, and Andrea Kihlstedt are co-founders of the Capital Campaign Toolkit, a virtual support system for nonprofit leaders running successful campaigns. The Toolkit provides all the tools, templates, and guidance you need — without breaking the bank.

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About the Author:

Amy Eisenstein | CEO & CO-FOUNDER

Amy Eisenstein, ACFRE, is CEO & Co-Founder of the Capital Campaign Toolkit. She is a veteran fundraising consultant. With over 20 years of experience in the nonprofit sector, she’s published a number of books, including Major Gift Fundraising for Small Shops. Amy is also an in-demand keynote speaker and an engaging board retreat trainer and facilitator.