Including Financial Requirements In Bylaws

[pdevline]

While I understand that the handling of such a volatile item as finance is best left for inclusion in Standing Rules, I was wondering if certain basic finacial requirements that never change should be included in Bylaws?

As an example, our state attorney general requires that all NPO funds, whether interest bearing or not, must be federally insured. Since this matter is an absolute, would it be best included in the Bylaws as opposed to the Standing Rules. Leaving the latter to deal with the everyday handling of the funds, e.g., income resources, bill paying, investments, etc.

Thanks in advance.

[Gary c Tesser]

Generally, they would if the organization thinks these financial requirements -- or any other requirements -- are that fundamental. Looking at RONR, 11th Edition, because it's on my lap, open to p. 12 and 13, we see that the bylaws, and/or constitution, are the organization's "documents that contain its own basic rules relating principally to itself as an organization." It (the bylaws) "prescribes how the society functions, and ... includes all rules that the society considers so important that" they are not easily changed and cannot be suspended (I'm paraphrasing). Do these financial requirements fit this description?

But specifically, your example about federally insuring NPO funds seems not to fit. It looks as if if something is the law, leave it as the law; repeating it as your bylaws (or, for that matter, as your standing rules) wouldn't help any. For one thing, when the law changes, you would have to scramble to change your bylaws. For another, you might then need a lawyer any time you wanted to deal with your bylaws. And maybe other legal stuff. Why don't we discuss this after 6 AM?

[Tim Wynn]

While I understand that the handling of such a volatile item as finance is best left for inclusion in Standing Rules, I was wondering if certain basic finacial requirements that never change should be included in Bylaws?

As an example, our state attorney general requires that all NPO funds, whether interest bearing or not, must be federally insured. Since this matter is an absolute, would it be best included in the Bylaws as opposed to the Standing Rules. Leaving the latter to deal with the everyday handling of the funds, e.g., income resources, bill paying, investments, etc.

Thanks in advance.

The bylaws include "all the rules that the society considers so important that they (a) cannot be changed without previous notice to the members and the vote of a specified large majority (such as a two-thirds vote), and (b ) cannot be suspended…" See RONR (11th ed.), p. 13, ll. 2-9.

It sounds like the society might consider such a rule to be that important.

[Robert B Fish]

While not disagreeing with the advice given above, I'm wondering if it's a good idea to try to repeat rules from higher authorities that are already binding upon the organization. Might it be better to require that the treasurer be in a position by training or experience to be thoroughly understanding of applicable regulations governing NPO's within your state?

I could see this going to excess where you would end up repeating a significant part of your state code in your bylaws. This rule today; what tomorrow?

-Bob

[Tim Wynn]

While not disagreeing with the advice given above, I'm wondering if it's a good idea to try to repeat rules from higher authorities that are already binding upon the organization. Might it be better to require that the treasurer be in a position by training or experience to be thoroughly understanding of applicable regulations governing NPO's within your state?

I could see this going to excess where you would end up repeating a significant part of your state code in your bylaws. This rule today; what tomorrow?

-Bob

While Mr. Fish makes an excellent point, from a procedural standpoint, only procedural laws are binding on an organization. There is no rule in parliamentary law or RONR that dictates that an organization cannot decide to break a law. Therefore a group could break a law without violating its own rules… unless the rule was adopted into the organization.

In short, a point of order that a motion is out of order just because it violates a law should not necessarily be ruled well taken; however, a motion that conflicts with the bylaws IS out of order, unless the rule is subject to suspension.

[Gary c Tesser]

Like Mr Fish, I agree with what that has been said here so far (regulars will know why), but it seems to me that the focuses of Parliamentarians Fish and Wynn are on different things. Mr Wynn's conclusion may be admirably short, but it stops too short: the "burden of proof" here should be on the assertion that a violation of the organization's rules has occurred; and in this scenario, with the essence of the law **not** folded into the rules of the organization, there has been no breach. I have made this point in the past using the example of an orchid-fanciers' society, deciding to rob a bank, needing to be principally concerned with getting the meeting notice out on time (upon which Mr Honemann called me a "lost soul" *); more peaceably inclined writers have used the example of socially-conscious groups engaging in illegal civil disobedience.

But this is not what is at issue in O. P. PDevline’s situation. There is no question of his (her?) NPO’s intending -- needing -- to comply with his attorney-general’s requirement. They’re going to. He was asking whether to make a rule in his bylaws or his standing rules, and I (and perhaps Mr Fish) was suggesting neither. Rather, they simply need just to make sure that the organization gets its federal insurance, which the attorney-general tells them to. It’s like having the treasurer pay the electric bill -- you don’t want to bother with having that in the bylaws or in the standing rules.

(Incidentally, this kind of attorney-general’s requirement is not a “statute,” is it? I ask not so as to risk being mistaken as practicing law, which I’m not, so quit licking your chops, Todd, but because sometimes we distinguish between parliamentary law and statute, and maybe we also need to mention attorney-generals’ diktats at the like.)

__________

*Heh heh. But it wasn't cause-and-effect. He also, IIRC, in that thread asked after Dan Seabold and John H, who also had been absent from these pages for some time. Both are still missed here; Dr Seabold has contrived to get his name in print somewhere else. That thread, coming in late December of 2004 or so, was whimsically titled "Lost Souls."

[Guest Edgar]

Incidentally, this kind of attorney-general’s requirement is not a “statute,” is it?

Not only isn't it a statute, I have my doubts as to whether there's an actual statute to back up his ruling (or doubts that his ruling was accurately represented here). But that's for another forum.