Budget Approval/Large Expenditure To Be Spent

[Guest Deborah]

Good Morning,

I am a member of a 501©5 organization. The annual membership fees generates approximately $4000 per year. This is a small nonprofit club with meager funds. In May of this year the board of this organization voted on a huge expenditure ($15,000 to be paid to a financially troubled organization over a period of 5 years). Members did not find out about this expenditure until August 2010 in the newsletter which contained the May minutes. Many members are upset because they had no say in the matter. What are the members' options?

Thank-you for your help.

Deborah

[Tim Wynn]

Good Morning,

I am a member of a 501©5 organization. The annual membership fees generates approximately $4000 per year. This is a small nonprofit club with meager funds. In May of this year the board of this organization voted on a huge expenditure ($15,000 to be paid to a financially troubled organization over a period of 5 years). Members did not find out about this expenditure until August 2010 in the newsletter which contained the May minutes. Many members are upset because they had no say in the matter. What are the members' options?

Thank-you for your help.

Deborah

See Official Interpretation #13.

[Trina]

Good Morning,

I am a member of a 501©5 organization. The annual membership fees generates approximately $4000 per year. This is a small nonprofit club with meager funds. In May of this year the board of this organization voted on a huge expenditure ($15,000 to be paid to a financially troubled organization over a period of 5 years). Members did not find out about this expenditure until August 2010 in the newsletter which contained the May minutes. Many members are upset because they had no say in the matter. What are the members' options?

Thank-you for your help.

Deborah

If a contract or legal commitment has been entered into as a result of the board's action, you may need to consult an attorney as well.

Also, if the board has grossly overstepped the authority given to it by your bylaws, see FAQ#20:

http://www.robertsrules.com/faq.html#20

And possibly RONR Chapter XX (Disciplinary Procedures), if it comes to that.

Note that, according to RONR, a board does not start with any automatic authority to do things -- such authority must be specifically granted by the organization's bylaws.

[Trina]

Why does your subject line say 'budget approval' -- was a formal budget approval process involved somehow?

[Tim Wynn]

Why does your subject line say 'budget approval' -- was a formal budget approval process involved somehow?

I'm guessing that she was hoping the expenditure would have to be approved.

[Guest Deborah]

I'm guessing that she was hoping the expenditure would have to be approved.

There are 2 membership meetings per year..Fall and Spring. In November, 23 members attended the Fall meeting out of I am guessing at most 190 members. The Board, in May 2010 approved $15,000 to be given to a 501c(3) organization, which is basically bankrupt at this point. The $15,000 is to go to the 501c(3) at $3000 per year for the next 5 years. There was no signed contract, just a pledge. Members were not aware that this was approved as they did not know until August when it was in a newsletter under May Minutes. One member at the meeting made a motion that no further monies were to be given unless the board had membership approval. The motion was seconded by another and it passed.

Another member asked a Board member what happens if the 501c(3) doesn't finish what was promised to our small organization to which the Board member replied; "I don't care what they do with the money, they can plant trees for all I care." I was told the meeting room went silent.

As for "Budget" in the subject line, the Board stated that membership doesn't approve their budget. Our bylaws state;"The Board of Directors shall consist of the President, Vice-President, Secretary, Treasurer and Directors and shall meet periodically as necessary to govern the affairs of the Club. The Vice-President, Secretary, Treasurer and all four Directors shall each have one vote during Board of Director meetings.

Speaking for myself, this bylaw does not specifically give the Board automatic authority over the treasury.

Thank-you for any help you may give.

Deborah

[Guest gerry]

There are 2 membership meetings per year..Fall and Spring. In November, 23 members attended the Fall meeting out of I am guessing at most 190 members. The Board, in May 2010 approved $15,000 to be given to a 501c(3) organization, which is basically bankrupt at this point. The $15,000 is to go to the 501c(3) at $3000 per year for the next 5 years. There was no signed contract, just a pledge. Members were not aware that this was approved as they did not know until August when it was in a newsletter under May Minutes. One member at the meeting made a motion that no further monies were to be given unless the board had membership approval. The motion was seconded by another and it passed.

Another member asked a Board member what happens if the 501c(3) doesn't finish what was promised to our small organization to which the Board member replied; "I don't care what they do with the money, they can plant trees for all I care." I was told the meeting room went silent.

As for "Budget" in the subject line, the Board stated that membership doesn't approve their budget. Our bylaws state;"The Board of Directors shall consist of the President, Vice-President, Secretary, Treasurer and Directors and shall meet periodically as necessary to govern the affairs of the Club. The Vice-President, Secretary, Treasurer and all four Directors shall each have one vote during Board of Director meetings.

Speaking for myself, this bylaw does not specifically give the Board automatic authority over the treasury.

Thank-you for any help you may give.

Deborah

Only a whole reading of your organization's bylaws, govening documents, and relevalt law and regulations can provide an answer to the issue of the powers of the board vs. thepowers of the membership.

It is not unusual for organizations with a board of directors that the board , and not the members, have the power to spend funds and make financial commitments. If this is the case, motions passed at a membership meeting would not be relevant.

[Guest Guest]

Only a whole reading of your organization's bylaws, govening documents, and relevalt law and regulations can provide an answer to the issue of the powers of the board vs. thepowers of the membership.

It is not unusual for organizations with a board of directors that the board , and not the members, have the power to spend funds and make financial commitments. If this is the case, motions passed at a membership meeting would not be relevant.

[Guest Deborah]

ARTICLE I. NAME

(Updated 2009)

The name of this organization shall be: *************.

ARTICLE II. PURPOSE

1. To preserve the genetic purity and the original type that have been achieved through inbreeding and line breeding the *.

2. To improve, promote and perpetuate the * strain of *.

3. To cooperate with the AMHA Inc. in promoting the ***.

4. To provide a united voice and effort in support of the **.

5. To promote good fellowship and sportsmanship among *** Club members.

ARTICLE III. MEMBERSHIP

(Updated 2003, 2004, 2009, 2010)

1. Membership shall be open to anyone interested in the purposes of the **** Club.

2. There shall be five types of membership:

* Senior: Members 18 and over as of January 1of the current year are limited to one vote.

* Junior: Members under 18 as of January 1 of the current year have no vote.

* Family: Membership includes two Senior members as defined in par B.1 who reside in the same household. Family Memberships are limited to two votes.

* Lifetime: Members require approval of Board of Directors.

* Honorary Lifetime. As may be approved by majority vote of the Club members present at Club meeting.

3. Dues: Annual dues shall be determined by the Board of Directors and are payable on or before December 31 of each year. Lifetime membership dues shall be established at 20 times the current senior membership dues.

4. Annual dues and other monies due to the club shall be paid in full to qualify as a member in good standing.

ARTICLE IV. OFFICERS & DUTIES

(Updated 2004)

1. President, shall be elected for a term of one year, and shall preside at all meetings of the Club and the Board of Directors. The President does not vote during these meetings unless his/her vote would change the outcome, that is to make or break a tie.

2. Vice-President, whose term of office shall be one year, shall exercise any power or duty of the President in his or her absence.

3. Secretary, shall be elected for a term of two years, post all notices to members, carry on Club correspondence and keep accurate minutes of all meetings. To effect an Annual Election, the Secretary shall be elected for a term of one year at the 2004 election.

4. Treasurer, shall be elected for a term of two years, receive all funds, pay all bills of the Club and keep full and accurate account of all receipts and disbursements. The Treasurer shall deposit all money and other valuable effects in the name of the Club in such depositories as may be designated by the Board of Directors and maintain membership records.

5. Directors:

* The immediate Past President shall be a Director

* Three additional Directors shall be elected for a term of three years. However, to effect an Annual Election, one of the three Directors shall be elected for a term of one year and a second Director shall be elected for a term of two years at the first election.

6. The Board of Directors shall consist of the President, Vice-President, Secretary, Treasurer and Directors and shall meet periodically as necessary to govern the affairs of the Club. The Vice-President, Secretary, Treasurer and all four Directors shall each have one vote during Board of Director meetings. It shall be the duty of the Board of Directors to fill any vacancy created by an unexpired term of office and to designate an auditor annually.

ARTICLE V. COMMITTEES

(Updated 1999, 2004, 2009)

1. Nominating Committee shall consist of three members appointed by the Board of Directors to nominate a slate of Officers and Directors.

2. Screening Committee shall consist of two or more members appointed by the Board of Directors annually at its first meeting for the purpose of approving horses eligible to participate in ***** Club functions and to answer outside inquiries about **** bloodlines. Any member aggrieved by a decision of the Screening Committee may appeal in writing to the Board of Directors for review.

ARTICLE VI. ELECTIONS

(Updated 1999, 2003, 2009, 2010)

1. Elections shall be held at the Annual Meeting.

2. The Nominating Committee will nominate a Slate of Candidates at least 90 days prior to the Annual Meeting. This slate will be postmarked and mailed to the membership 60 days prior to the Annual Meeting. After the Slate has been mailed, the Nominating Committee shall also place on the ballot the name of any member received in writing at least 45 days prior to the Annual Meeting. The Nominating Committee will ascertain eligibility and availability of the nominees. Certification shall consist of the Secretary verifying that the candidate is a member in good standing. The ballot will be postmarked at least 30 days prior to the Annual Meeting and will be included with the notice of Annual Meeting as described in Article VII.

3. Nominations shall be accepted from the floor following the report of the Nominating Committee.

4. Candidates and Voting members shall be senior members in good standing with the Lippitt Club as stated in Article III. Membership. Candidates for office must have been a member for at least 12 consecutive months immediately prior to the Annual Meeting.

5. Elections shall be by Secret Ballot, from voting members present or absent The presiding officer shall appoint at least three club members, who are neither running for office nor are a current member of the Board of Directors, as tellers to count the ballots.

ARTICLE VII. MEETINGS

(Updated 1999, 2003, 2006, 2009)

1. The Board of Directors and working committee meetings may be convened by telephone conference call provided that notice of the meeting has been conveyed to each member of the Board or committee. To convene such meetings, a quorum of the Board or committee members must participate in the meeting.

2. The Annual Meeting shall be held during the first week of November on a date specified by the Board of Directors.

3. Notice to all members shall be postmarked at least 30 days prior to the Annual Meeting and shall include a ballot.

4. Special Meetings may be called, provided at least 15 days notice is posted to the membership and a quorum, as specified in Article VII. Meetings F. is present including at least one Board member available in person or via phone. Approval by the Board of Directors of the Agenda and Chairperson is required before these meetings may be held. No decisions affecting the entire membership or Club policy may be made at these meetings. Special Meetings may be held within or outside of the State of Vermont.

5. The Order of Business at meetings shall be:

* Reading of minutes of last meeting.

* Report of the Treasurer.

* Committee Reports.

* Unfinished Business.

* New Business

6. For any membership meetings, a quorum shall consist of fifteen (15) members

7. The Annual Meeting may be held within or outside of the State of Vermont

8. For any Board of Directors or working committee meetings, a quorum shall consist of a simple majority.

ARTICLE VIII. PARLIMENTARY AUTHORITY

(Added 2006)

Meetings shall be conducted in accordance with the most recent edition of Roberts Rules of Order Newly Revised.

ARTICLE IX. AMENDMENTS

(Updated 1997, 2010)

1. Amendments to Bylaws shall be by a two-thirds majority of all votes cast. Ballots may be counted concurrent with the election of officers

2. Notification of a vote to amend a Bylaw shall be mailed at least 60 days in advance to all members, and the ballot shall be postmarked at least 30 days prior to the deadline for the Bylaw amendment vote.

ARTICLE X. FISCAL YEAR

(Updated 2006)

The Fiscal Year shall run from January 1st to December 31st.

ARTICLE XI. DISSOLUTION

In case of dissolution, The *** Club's assets shall be transferred to a non-profit organization with purposes similar to those of The *** Club, as designated by the Board of Directors.

Deborah

[Gary c Tesser]

(Deborah: Good morning to you too.)

Gerry, you hadda ask?

Gerry, you bloody hadda ask?

BFA, Gerry, you bloody hadda ask?

O Deborah. Now that you have gone to the trouble of posting apparently your entire bylaws here (bloody Thank You, Gerry) we are still not able to interpret them here over the Internet, even here on the world's premier Internet parliamentary forum.

"What are the members' options?" Well, Robert's Rules says that the membership is supreme. But your bylaws jump and say that the board shall "govern the affairs of the Club."

What this apparent possible conflict means is up to your club to determine. You -- your organization itself -- and not the world's premier Internet parliamentary forum, must decide. ... a few days from now?

(Oh, and for the record: it really doesn't help to post the complete bylaws here on the website. Even if, as is probably so, it helps illuminate the situation. If you need a parliamentarian, and it looks as if you might, you better get a parliamentarian.)

[Trina]

...

O Deborah. Now that you have gone to the trouble of posting apparently your entire bylaws here (bloody Thank You, Gerry) we are still not able to interpret them here over the Internet, even here on the world's premier Internet parliamentary forum.

...

I also feel bad for Deborah, as some time was clearly taken to edit the posted bylaws for attempted anonymity. Gerry's general comment about having to read the bylaws in their entirety is accurate; unfortunately, he/she did not add the necessary caveat that we are not supposed to be interpreting bylaws on this forum.

Since the bylaws are, nevertheless, sitting here in front of us...

Has your annual meeting indeed come and gone, as specified in the bylaws ('first week of November')? OK, I see from your earlier post:

In November, 23 members attended the Fall meeting...

Since action can only be taken at a meeting, that possible opportunity for action by the membership is gone. There is a vague provision for special meetings in the bylaws, but it doesn't say how they are to be called, and also seems to place severe (impossible?) constraints on what a special meeting is allowed to do.

In the same earlier post you say:

There are 2 membership meetings per year..Fall and Spring.

I have to ask, where does that Spring meeting come from? I don't see any reference to it in the bylaws.

[Guest Deborah]

Gary and Gerry...(Deb's chuckling)

I came to the same conclusion on the bylaws.

There has always been a membership meeting in the Spring. Since the Board cannot spend any more money for this project this year, perhaps at the Spring Meeting there will be an opportunity for membership to give it a proper burial. Then there is the possibility that the project will die do to the lack of funds by the 501c(3) organization as there is definitely one lean and possibly 2 against them.

Anyway, thank-you both for your comments.

I must say, I really enjoy perusing this forum as it is truly educational, being that there are so many circumstances presented.

Deborah