Bylaws vs. Policies and Procedures
Starting and running a nonprofit requires meticulous attention to both governance and day-to-day operations. Two critical components that guide these aspects are bylaws and policies. While they may seem similar at first glance, bylaws and policies serve distinct purposes within a nonprofit organization and understanding the difference between these two documents is essential for setting up your organization the right way from the start and then ensuring effective governance, maintaining compliance, and fostering a healthy organizational culture as it grows.
What Are Bylaws?
Bylaws are the internal rules that govern the overall management and operation of a nonprofit organization. They provide a framework for how the organization is structured and how it functions. Bylaws are typically adopted by the board of directors during the initial stages of forming the nonprofit and can be amended as needed.
Key Elements of Bylaws
- Board Structure: Defines the size, composition, and roles of the board of directors.
- Meetings: Specifies the frequency, notice requirements, and procedures for board meetings and member meetings.
- Officers: Outlines the titles, duties, and terms of the nonprofit’s officers, such as the president, treasurer, and secretary.
- Committees: Details the creation, function, and authority of any committees within the organization.
- Membership: If applicable, describes membership classes, rights, and responsibilities.
- Voting Procedures: Establishes how votes are conducted, including quorum requirements and proxy voting.
- Amendments: Provides the process for making changes to the bylaws.
What Are Policies?
Policies are specific guidelines and procedures that address various operational and administrative aspects of the nonprofit. Unlike bylaws, which provide a broad framework, policies are more detailed and focus on particular areas of the organization’s activities. Policies are typically developed by the board of directors (in the absence of an Executive Director) or staff and can be updated as needed to reflect changes in the organization or its environment.
Key Elements of Policies
- Operational Procedures: Detailed instructions on how specific tasks should be carried out, such as financial management, fundraising, and volunteer coordination.
- Code of Conduct: Guidelines for behavior and ethics for board members, staff, and volunteers.
- Conflict of Interest: Procedures for identifying and managing conflicts of interest within the organization.
- Employment Policies: Rules regarding hiring, termination, employee benefits, and workplace conduct.
- Financial Policies: Procedures for budgeting, financial reporting, internal controls, and auditing.
- Safety and Security: Protocols for ensuring the safety of staff, volunteers, and clients, including emergency response procedures.
- Privacy and Data Protection: Guidelines for handling personal information and ensuring data security.
Key Differences Between Bylaws and Policies
- Scope and Purpose: Bylaws provide a broad framework for governance and organizational structure, while policies offer detailed guidelines for specific operational areas.
- Permanence: Bylaws are foundational and typically change infrequently, whereas policies can be updated more regularly to adapt to new circumstances or best practices.
- Adoption and Amendment: Bylaws require formal adoption and amendment procedures, often involving a vote by the board of directors or some percentage of membership. Policies can be adopted and amended by the board or designated staff members, depending on the organization’s governance structure.
- Legal Standing: Bylaws have a legal standing and are often required by state law when incorporating a nonprofit. Policies, while important for internal governance, do not have the same legal weight but help ensure compliance with laws and regulations.
Another Way to Visualize the Difference Between the Two
When writing bylaws for a new nonprofit organization, it seems logical to put all the operational details in the bylaws but because bylaws are intended to be a guide and not an everyday operations document, adding details in the bylaws is not appropriate.
Think of the bylaws as the shell of a house. The rooms are structured for their specific use – kitchen, bathroom, garage, etc. – and can’t be altered without some purposeful effort. Editing your bylaws should require some planning and thought, just like remodeling a house.
Your policies and procedures are the furnishings of the house. You can repaint the walls, move furniture about, replace kitchen appliances, etc. with relative ease. Just like the items in your house, policies and procedures should be flexible and adaptable to the needs of the organization as they change.