Legal Requirements, Bylaws,
and Board Policies
Section 1 (Items 1-10) of the Annual Checkup: A Board Governance Self-Assessment
1. The IRS provides this Compliance Guide for easy review of the relevant federal regulations. Most state agencies provide clear instructions regarding legal requirements. Link to the Florida Department of State's posted rules here. Independent Sector published a series of summary guides to state laws. Here's the one for Florida. Click here for a state-by-state list of the regulatory agencies and their websites from the National Association of State Charity Regulators.
2. Item #21 of the IRS's Governance Check Sheet (used when performing an audit) asks whether the board reviewed the 990 before it was filed. BoardSource has provided a great checklist for boards to use when looking at their 990.
3. There is a requirement to register your organization prior to soliciting charitable contributions in 41 states, including Florida. Here's the Charitable Solicitation Compliance Guide from the National Council of Nonprofits and Harbor Compliance. NEW! Those who prefer the summary version can click here. Florida requires nonprofit organizations with annual revenue above $25,000 to register with the state. The form for that is here. Organizations with less annual revenue must file for an exemption. That form is here.
4. Bylaws are legal documents but that doesn't mean the language in them has to be arcane and impenetrable. Here's a sample set of bylaws that hits all the provisions The Board Doctor recommends. The Nonprofit Leadership Center of Tampa makes their recently revised Bylaws publicly available. Count on these as a good and modernized guide.
5. NEW! Thank you BoardSource for this great two-pager on the Do's and Don'ts of Bylaws.
6. The Board Doctor believes in term limits in all cases and stands ready to help any group work through any barrier they have to fully implementing them. Boards engaged in the discussion would do well to read this BoardSource article on The Pros and Cons of Term Limits.
7. Updated! In this article on How to Remove a Board Member, BoardSource recommends making sure your bylaws and policies reflect your organization's values.
8. The Friends of Ottawa National Wildlife Refuge adopted a great process for electronic voting on important matters between meetings. Here's the form they developed.
9. Document Retention and Destruction Policy can be boring, but it is an important to think it through. Let the American Institute of Certified Public Accountants help. The folks at BoardEffect published a informational blogpost on this topic. Here's another sample policy, from the Charities Review Council.
10. The IRS requires us to disclose whether we have a conflict of interest policy in place, so why not just take care of that? Here's the sample policy they publish in the appendix to the instructions for form 990. NEW! Some groups might need something more complicated, like this sample from the Charities Review Council, but most only need a simple statement like this one.
- BoardSource published a wonderful infographic about Must-Have board documents. Download it here. NEW! They've also helped us all out with this side-by-side comparison of Bylaws and Articles of Incorporation. Here's their FAQ on Legal Compliance Issues.
- BoardEffect's blogpost on the topic of government regulations is well worth the read. And this one explains the Duties of Care, Loyalty and Obedience.
- For those with questions about potential legal exposures, this 2016 study from The Urban Institute on State Regulation and Enforcement in the Nonprofit Sector is worth the read.
- NEW! Many nonprofits have to determine whether or under what circumstances their state's Sunshine Laws might apply to them. Here's a BoardSource primer.