Nonprofit bylaws and a conflict-of-interest policy, with free templates

Bylaws of [Organization Name]
A [State] nonprofit corporation. Adopted [date].

Article 1. Name and office

1.1 The name of this corporation is [Organization Name] (the "Organization").

1.2 Its principal office is at [address]. The board may move it.

Article 2. Purpose

2.1 The Organization is organized exclusively for charitable purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code, as set out in its Articles of Incorporation. Its mission is [one sentence].

2.2 These bylaws do not change the purposes or limits in the Articles of Incorporation. If the two ever conflict, the Articles control.

Article 3. Members

3.1 The Organization has no members. Any action that state law would otherwise require members to approve needs only the approval of the board. [If you want voting members, delete this article and have an attorney write one.]

Article 4. Board of directors

4.1 Powers. The board of directors manages the affairs of the Organization.

4.2 Number. The board has at least [3] and no more than [9] directors. [Check your state's minimum.]

4.3 Terms. Directors serve terms of [two] years and may serve up to [three] terms in a row. Terms are staggered so that about half end each year.

4.4 Election. The board elects directors at its annual meeting by a majority of the directors present.

4.5 Vacancies. The board may fill a vacancy for the rest of the term.

4.6 Resignation and removal. A director may resign in writing. The board may remove a director by a vote of two-thirds of the directors in office.

4.7 No pay. Directors serve without pay. The Organization may repay reasonable expenses the board has approved.

4.8 Independence. A majority of directors will be people who are not paid by the Organization and are not related to anyone who is. [Optional, and recommended.]

Article 5. Board meetings

5.1 Regular meetings. The board meets at least [four] times a year. The meeting in [month] is the annual meeting, where the board elects directors and officers and approves the budget.

5.2 Special meetings. The chair or any [two] directors may call a special meeting.

5.3 Notice. Directors get at least [seven] days' notice of a regular meeting and [48 hours'] notice of a special meeting, by email or any other method state law allows. Notice of a special meeting states its purpose.

5.4 Quorum. A majority of the directors in office is a quorum.

5.5 Voting. Each director has one vote. A vote of a majority of the directors present at a meeting with a quorum is an act of the board, unless these bylaws or the law require more. Directors may not vote by proxy.

5.6 Meeting by phone or video. Directors may take part by phone or video if everyone can hear each other at the same time, where state law allows.

5.7 Action without a meeting. The board may act without a meeting if every director consents in writing, including by email, where state law allows.

Article 6. Officers

6.1 Officers. The officers are a chair (or president), a secretary and a treasurer. The board may create others. The same person may not be both chair and secretary.

6.2 Election and term. The board elects officers at the annual meeting for one-year terms.

6.3 Chair. Leads board meetings and sets their agendas.

6.4 Secretary. Keeps the minutes and records and sends notice of meetings.

6.5 Treasurer. Oversees the finances, reports to the board at each regular meeting, and makes sure the books are kept and the required filings are made, including the annual IRS Form 990.

6.6 Removal. The board may remove an officer by a vote of a majority of the directors in office.

Article 7. Committees

7.1 The board may create committees of at least [two] directors. A committee acts only with the authority the board gives it in writing, and only as far as state law allows.

Article 8. Money and records

8.1 Fiscal year. The fiscal year runs from [January 1 to December 31].

8.2 Signing. The board decides who may sign checks and contracts. Any payment over $[amount] needs the approval of two officers.

8.3 Records. The Organization keeps accurate financial records, board minutes, and copies of these bylaws and its Articles of Incorporation. It makes its application for tax exemption and its three most recent annual returns available for public inspection, as federal law requires.

8.4 Annual review. The board reviews the budget and the financial statements at least once a year.

Article 9. Conflicts of interest

9.1 The board adopts and follows a conflict-of-interest policy. Each director and officer signs a statement each year saying they have read it and will follow it.

Article 10. Indemnification

10.1 To the extent state law allows, the Organization will cover the reasonable legal costs of directors and officers who are sued because of their good-faith service to it, except for willful misconduct. The board may buy directors and officers insurance. [Have an attorney check this article against your state's law.]

Article 11. Amendments

11.1 The board may amend these bylaws by a vote of two-thirds of the directors in office, after at least [seven] days' written notice of the proposed change. No amendment may conflict with the Articles of Incorporation or with the Organization's 501(c)(3) status.

Article 12. Dissolution

12.1 If the Organization dissolves, its remaining assets, after its debts are paid, go to one or more organizations exempt under Section 501(c)(3), as its Articles of Incorporation provide.

Certificate of adoption

I certify that the board of directors of [Organization Name] adopted these bylaws on [date].

Secretary: ______________________ Date: ____________

Conflict of Interest Policy of [Organization Name]
Adopted by the board of directors on [date].

Article I. Purpose

This policy protects the Organization's interests when it considers a transaction or arrangement that might benefit the private interest of a director, officer or key employee. It adds to, and does not replace, any state or federal law on conflicts of interest that applies to nonprofit and charitable organizations.

Article II. Definitions

1. Interested person. Any director, officer, key employee, or member of a committee with board-delegated powers who has a direct or indirect financial interest, as defined below.

2. Financial interest. A person has a financial interest if they have, directly or indirectly, through business, investment or family:

1. an ownership or investment interest in any business the Organization has a transaction or arrangement with;
2. a compensation arrangement with the Organization, or with any business or person the Organization has a transaction or arrangement with; or
3. a potential ownership or investment interest in, or compensation arrangement with, any business or person the Organization is negotiating a transaction or arrangement with.

Compensation includes direct and indirect pay, and gifts or favors that are not insubstantial. A financial interest is not necessarily a conflict of interest. Under Article III, the board decides whether a conflict exists.

Article III. Procedures

1. Duty to disclose. An interested person must disclose the financial interest, and all the material facts, to the board or committee considering the transaction or arrangement.

2. Deciding whether a conflict exists. After the disclosure and any discussion with the interested person, the interested person leaves the meeting while the remaining directors or committee members discuss and vote on whether a conflict of interest exists.

3. Handling a conflict.

1. The interested person may make a presentation at the meeting, but must then leave before the discussion of, and the vote on, the transaction or arrangement.
2. The chair may appoint a disinterested person or committee to look into alternatives.
3. After due diligence, the board or committee decides whether the Organization could get an equally good transaction or arrangement, with reasonable effort, from a person or business that would not give rise to a conflict.
4. If not, the board or committee decides by a majority vote of the disinterested directors present whether the transaction or arrangement is in the Organization's best interest, for its own benefit, and fair and reasonable. It then decides whether to enter into it.

4. Violations. If the board or committee has reason to believe someone failed to disclose an actual or possible conflict, it tells them so and gives them a chance to explain. If, after hearing the response and investigating as needed, it decides they failed to disclose, it takes appropriate disciplinary and corrective action.

Article IV. Records of proceedings

The minutes of the board and of any committee record: the names of the people who disclosed or were found to have a financial interest, the nature of the interest, any action taken to decide whether a conflict existed, and the board's or committee's decision; and the names of the people present for the discussion and votes on the transaction or arrangement, what was discussed including any alternatives, and a record of the vote.

Article V. Compensation

A voting member of the board, or of a committee whose jurisdiction includes compensation, who receives pay from the Organization directly or indirectly, may not vote on matters about that pay. They may provide information to the board or committee about it.

Article VI. Annual statements

Each director, officer and member of a committee with board-delegated powers signs a statement each year that they have received a copy of this policy, have read and understood it, have agreed to comply with it, and understand that the Organization is charitable and, to keep its federal tax exemption, must engage primarily in activities that accomplish one or more of its tax-exempt purposes.

Article VII. Periodic reviews

To make sure the Organization operates in a way consistent with its charitable purposes and does not put its tax exemption at risk, it reviews from time to time: whether its compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm's-length bargaining; and whether any partnerships, joint ventures and arrangements with management organizations follow its written policies, are properly recorded, reflect reasonable payments for goods and services, further its charitable purposes, and do not result in private benefit or inurement.

Article VIII. Use of outside experts

The Organization may use outside advisors for these reviews. If it does, the board is still responsible for making sure the reviews are done.

Annual statement

I have received, read and understood the Conflict of Interest Policy of [Organization Name], and I agree to comply with it. I understand that the Organization is charitable and, to keep its federal tax exemption, must engage primarily in activities that accomplish its tax-exempt purposes.

Financial interests to disclose (write "none" if none): ______________________

Name: ______________________ Role: ______________ Signature: ______________________ Date: ____________