In this episode, we’re going to talk about why it’s important for clubs to update their bylaws. As a nonprofit organization, your bylaws serve as the fundamental document that outlines how your organization should run. I will give some tips on how to avoid some common pitfalls and challenges. Remember, the bylaws are your main governing document, not just suggestions. Don’t ditch the legal advice.
TRANSCRIPT
00:00:03 Introduction
This is the Your Sports Resource Podcast, where each week, you’ll learn actionable strategies that you can implement so the operations of your club support your coaching staff and the direction of your organization. We are committed to excellence in youth sports leadership.
00:00:21
Let’s get started.
00:00:24
Hello everyone, and welcome to today’s episode of the Your Sports Resource Podcast.
00:00:29
My name is Renata Porter, and today we’re going to talk about why it’s important for clubs to update their bylaws and the process they should follow to do so.
00:00:40
And at the end, I’m going to give a few tips on how to avoid some common pitfalls and challenges that you might face through the process.
00:00:49
As you already know, as a nonprofit organization, your bylaws serve as the fundamental document that outlines how your organization should run.
00:00:59
They are the set of rules and regulations that govern the internal operations of your club, including how the organization is structured, how major decisions are made, and how board members are elected.
00:01:15
Basically, they are to ensure you stay compliant within the requirements of a nonprofit.
00:01:21
So, think of it as a clear framework that removes ambiguity or opportunity for manipulation on how to run the club as a business.
00:01:34
While at the time of writing, the bylaws will keep you on the straight and narrow when you have a board that is going to rotate every few years, but over time the club evolves and changes, it grows, it expands it, it adds programs, it increases staff, and even the purpose of the board itself may shift.
00:01:57
Unfortunately, a lot of clubs start to operate to suit their current needs due to these changes.
00:02:04
But they don’t change their bylaws, so operationally, you feel like you are doing the right things, but you’re actually working outside of your bylaws, and that puts the organization at great risk.
00:02:18
So, I recommend that at least every couple of years, you do a thorough review of your bylaws. Those should be conducted to ensure that you know you’re operating in a way and that your bylaws are relevant and effective.
00:02:37
So, let’s talk about why you should consider updating your bylaws on a regular basis. The first reason is, you know, pretty straightforward, and that is to keep up with any changes in the law.
00:02:50
A big portion of a board’s responsibilities is to stay compliant within local, state, and federal laws. The way you are able to stay in good charitable standing basically, so some things to consider that might have changed in the areas of board governance are conflict of interest policies, whistleblower protections, and, you know, just your overall how the state expects you to govern your nonprofit.
00:03:20
Updating your bylaws can ensure that your club is complying with the latest legal requirements. Now, the next reason to update your bylaws is to reflect the changes you have or are going to make.
00:03:33
For example, if your club has grown in programs, you may want to ensure those leads are at board meetings so their interests are heard, supported, and protected.
00:03:44
For example, most clubs have introduced, you know, incredibly profitable swim lesson programs, and many competitive programs are only able to do what they can for their members due to the money that the swim lessons bring in.
00:03:58
So, it would make sense to ensure to have that swim lessons director be a part of the board meetings, just like the head coach.
00:04:07
Now that’s a minor example, but don’t wait until your club has grown and shifted by leaps and bounds to change your bylaws to accommodate those changes, or you risk putting every decision you have made in jeopardy based on a technicality, really, it doesn’t matter if it was good for the business if it was out of bounds of what the bylaws tells you you can do.
00:04:31
The last reason for updating your bylaws is that it will improve your governance and decision-making.
00:04:38
Changes will allow you to improve your governance, such as board structure, voting rights and procedures, financial management, and policies to protect the organization.
00:04:51
As an example, if you have a really old set of bylaws, chances are you have it to where your elections of officers aren’t done by odd and even number years.
00:05:03
This causes you to have a completely new board every election cycle. That’s really not in the best interest of the club. So, you should have certain roles up for election and odd years and certain roles open for election up in, in even years.
00:05:20
So, you get to have that continuity on the board.
00:05:24
Alright, now that we’ve gone over the why, let’s talk about how to update your bylaws. Obviously, the first step is to review them.
00:05:33
My recommendation is that every board member should review and make comments and suggestions.
00:05:39
It’s important to collaborate on this process and not do it in isolation, as, say, you know, the board president. You just take it on and do it yourself.
00:05:49
Everyone that you involved in the collaboration will spot things from their own perspective.
00:05:55
And yes, there’ll be overlap on some items, but why collaboration is important is you know that one outlier. That you didn’t catch by doing it in isolation that someone else may.
00:06:08
My thoughts are, you know, put it in a Google Doc. Have everyone comment and offer suggestions. What you’re looking for in the review should be really structured in two ways.
00:06:21
OK, so, first look at the areas where things are out of date, out of compliance, or even inconsistent between articles. I see this a lot when I do bylaw reviews myself.
00:06:34
Often there’s articles in different sections of the bylaws that contradict each other and create confusion.
00:06:43
The next area to focus on in your review is you know where those improvements can be made, and these are where you know your organization is moving or has moved on and things need to be updated.
00:06:55
Once you have the proposed changes, then it’s time to hand your bylaws over to a lawyer to have them reviewed.
00:07:02
This is an important step because the lawyer will be up to date on any state laws or, you know, governing charities, and they can give you the appropriate wording and tell you what the new standards of practice are.
00:07:17
I know it costs money, but this isn’t an area where you want to skimp on money, you must engage your lawyer for a couple of hours just to keep your organization safe.
00:07:28
Then, once it’s reviewed by the lawyer, then you can go through the process of approving your bylaws.
00:07:34
Now the approval process is spelled out in the old version, and you must follow that old version of approval approvals until the new updated version is actually approved.
00:07:47
So be aware that if you need membership approval, you will need to start that process.
00:07:53
Now I’d like to get into some common pitfalls and challenges that you may encounter while working on revising your bylaws.
00:08:03
The first thing is to not rush the process. It’s important to take the time to carefully review and revise your bylaws. Rushing that process can lead to oversights and even more errors.
00:08:16
Which creates a whole new set of bylaws that are just as ineffective as the last ones, or, you know, it can create just more time, effort, and expense for you, the board, and with the lawyer.
00:08:31
Next, it’s to avoid the temptation to do this process in isolation.
00:08:36
I know you, as the board president or someone else on the board, might feel it’s just easier to do it by yourself, but in the long run, you risk the same outcomes by not taking your time to do these correctly, right?
00:08:49
You’ll find mistakes, and there’ll be things that will be overlooked.
00:08:52
So, engage your board, even your head coach and swim school director and give everyone enough time to make appropriate considerations to provide valuable input.
00:09:03
Next, once you’re done collecting the proposed changes, it’s important to do a bit of, you know, operational impact analysis.
00:09:11
That sounds fancier than I intend. But what I’m really trying to say is if you make a change, does it impact your processes, roles or positions? Or do your current tools even keep up?
00:09:25
So, while the change might make sense, you need to consider what operational changes will happen and ensure you are in a position to support those changes.
00:09:35
So, if the impact is simply an adjustment in a policy or process, well then, you know, make sure that that action is assigned to the right person and that the review of that policy or process is taken on board and put back in front of the board.
00:09:51
Then there is how you communicate the changes often, and I really wish this wasn’t true, but when boards can control the changes to the bylaws without a membership vote.
00:10:02
They just move ahead and make the changes with the membership none the wiser. Transparency can transform your clubs’ culture, and by that, I mean it can do a lot to help it or ruin it.
00:10:15
If you feel the changes are warranted and are in the best interest of the organization, then there should be no problem presenting those changes to the membership for their understanding.
00:10:28
Lastly, and I can’t believe I have to say this, but please don’t ditch the legal advice.
00:10:33
I know it’s tempting because you may feel the changes are minor, but including the consultation with your lawyer, who specializes in nonprofit law, will give you the expertise you need to ensure your updated bylaws are effective, legally compliant, and well-crafted. So, the main takeaway today is that you are most likely sitting on bylaws that haven’t been reviewed in a very long time.
00:11:00
They are likely not to have kept pace with your organization. And while people don’t tend to make it a priority to ensure a club is working within their legal requirement.
00:11:12
You don’t want to be caught out by a member or stakeholder or the government itself. Even if you feel they still work, it’s beneficial to put them through the review process.
00:11:25
Remember, the bylaws are your main governing document, not just suggestions. They hold legal weight. They aren’t just opinions, so give them the focus they need. So, you, as a board, can fulfill your duties effectively and efficiently.
00:11:41
All right. Well, that’s it for today.
00:11:43
Thank you for listening, and please subscribe, rate, and review this podcast so we can reach more people. And make sure you visit us at yoursportsresource.com. Thanks for spending time with me.
