The Lewis County Historical Museum is in big trouble, and the secretary proposes to change a bylaw. Is this the right way to go?
Jurassic Parliament is always glad when boards think about their bylaws. Too often, bylaws are regarded as boilerplate, verbiage that has to exist but is not interesting. We believe that bylaws are fascinating and we know that they are vital to your work on a nonprofit board of directors.
Bylaws are the foundation on which any serious nonprofit organization conducts its work. They set out the terms and conditions under which the good purposes of your group can be pursued. They need to be carefully written and frequently referred to. Bylaws moldering in a file folder do nobody any good at all.
In the case of the Lewis County museum, over the last four years the endowment has shrunk from about half a million dollars to a couple of grand left in the checking account. Three employees have been laid off indefinitely, the police locked the building up tight in order to get the financial records, and the board has been meeting in emergency session. The board secretary proposed to change the bylaws to require that any future activity with any future endowment money must be signed off on by all members of the board of directors.
In our view, this would be a clumsy way to ensure probity in a nonprofit’s financial dealings. Any responsible board must undertake a series of steps regarding its finances, some of which we outline in our article “Who’s Responsible for the Money?” For example, one of the laid-off employees was the bookkeeper, who was also serving as treasurer – it is not a good idea to have a single person fulfill both roles.
When you are elected or appointed to a nonprofit board of directors, take the time to read the bylaws and to review the financial arrangements. Don’t allow the pleasure of joining a worthy endeavor to keep you from examining how things are done, and asking questions to become informed. Whether you serve as treasurer, chair, or “just” an ordinary director, you are responsible for using that money wisely. Best to think about the bylaws before the crisis, rather than after.
Ann G. Macfarlane, PRP
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