Give your staff the legal power to make organizational decisions
When The Appeal relaunched as a worker-led nonprofit newsroom in 2021, two of the first questions we had to answer were: Can we legally do this? And, if so, how?
We knew there were collaboratively run nonprofits out there, so we figured there had to be a way. But we also knew that we had to comply with state and federal governance regulations, which meant we needed bylaws.
Bylaws define the internal rules that govern how your organization runs, makes decisions, and chooses leaders. While they might seem like (and, let’s be honest, are) boring legal documents, your bylaws are actually one of your strongest tools for legitimizing new and innovative organizational structures.
In this piece, we’ll walk you through the steps to drafting new bylaws. But, before we do so, some words of overall advice: build your organization first, then write bylaws that reflect the structures and processes you’ve established.
We had to incorporate The Appeal quickly—well before we figured out how our organization was going to run. So we started out with boilerplate bylaws. A year later, we took the time to draft the bylaws version we have now. And now, we’re pretty proud of them. Here’s what we’ve learned.
1. Get a template — and a lawyer
Luckily, the Sustainable Economies Law Center (SELC) has plenty of resources for worker self-directed nonprofits, including a bylaws template. These materials helped us wrap our heads around what we were trying to do.
For example, their Guide to Drafting Bylaws has a great description of what your bylaws should include (in California), such as:
- Your board’s functions
- How the board makes decisions
- The number of board members
- The board-member selection method
- Term lengths
- Which board roles to include (you’ll need, at minimum, a chairperson, secretary, and treasurer)
- Board meeting schedules
- A Purpose Clause
- A Dissolution Clause
- A conflict of interest policy
- A whistleblower policy
- A document retention and destruction policy
- How compensation is determined
While the SELC’s resources were the perfect starting point, we knew we would have to adapt their template to fit the unique needs of The Appeal. We opted to keep some things—like our conflict of interest, whistleblower, and retention policies—separate so we can amend these without having to amend our entire bylaws.
We also thought it was important to add a few key sections not included in SELC’s template:
- Management Principles: These spell out the spirit of our worker-led model and define how it works.
- Membership Structure: In order for The Appeal staff to retain as much power as possible, we restructured The Appeal as a membership organization. We’ll get into this a little bit more, below.
Don’t feel like you need to do all this on your own. In fact, we highly recommend you don’t even try. It’s easy to make mistakes that could have serious consequences down the road, so it’s worth finding a lawyer who aligns with your values and is willing to be creative.
We were very lucky to have Karl Mill and the Mill Law Center in our corner. Karl never made us feel stupid for asking questions, no matter how basic or outlandish they were. He was also invested in finding ways to make our ideas work, rather than fixating on what wouldn’t.
2. Figure out your non-negotiables
Like all things at The Appeal, drafting new bylaws started with our team. We conducted surveys and led group discussions about which decisions should sit with the board and which staff should have a say in. You can read more about how we did that here. During these discussions, our team members made it clear they wanted to retain as much control as possible.
Conversations about our bylaws inevitably led to conversations about the role our board would play in our organization. Our team decided it was important for the board to provide insight, guidance, and accountability without holding exclusive power to control the organization or make unilateral decisions, unless absolutely necessary. In the end, here’s how we allocated power:
Our team decides:
- The annual budget
- Policies and processes
- Changes to our mission statement
- Staff hiring and firing
- Who represents our team on the board
- Amendments to the bylaws
Some of these decisions require board approval or allow for a board veto, but all of these choices start with the team. For example, the board is legally required to sign off on our budget, but the expectation is that the board will approve the budget staff puts forward unless doing so would amount to financial mismanagement.
Our team and board decide:
- If we close or merge with another nonprofit
- To add or remove board members
- To hire or fire leadership
- Leadership compensation
- Large purchases
These decisions can originate with the team or the board and require each entity to vote to approve.
Lastly, our board oversees:
- Legal compliance
- Malfeasance and mismanagement
- Board positions
- Leadership expenses
The board is legally required to retain control over these decisions to prevent corruption. Plus, this process is important for accountability. We’ve also charged our board with ensuring that we are living our values of real equity and diversity.
3. Make the rules easy to use
All this information is technically helpful, but if it’s buried in a 20-page document, how useful will it actually be? Typically, no one ever reads bylaws because doing so is usually akin to chewing on gravel.
We can’t underscore enough how important it is to make important information easily accessible. One of the things we borrowed from SELC is their Board Decision Matrix. Having a visual representation of the decision-making power structures in our organization makes our bylaws actually useful.
Here’s what our Board Decision Matrix looks like and a template to create your own:
|Staff Collective Only||Staff Collective w/ Board Notice||Board and Staff Collective Vote||Exclusive Board Authority|
|Fundraising strategy||Annual budget (Board can veto)||Change of operating status||Legal compliance|
|New policies and processes||Changes to mission statement (Board can veto)||Adding or removing Directors||Ensuring real equity and diversity|
|Hiring and firing of non-leadership staff||Staff decisions made after considering a conflict of interest||Hiring & firing leadership||Appointing Chair, Secretary, and Treasurer|
|Conflicts of interest among staff||Appointment of staff board seat||Approving leadership compensation||Address malfeasance or mismanagement|
|Asset purchases >$50,000||Approving leadership expenses|
4. Be Flexible and Creative
As we mentioned above, The Appeal is structured as a membership organization with two classes of members: the Staff Collective and the Board of Directors. We did this to give our staff members the legal authority to make/participate in big decisions that impact their lives and their work. But we didn’t start out here.
When we completed the first draft of our bylaws, we—well, mostly Molly since she’s our lawyer—left a lot of comments for Karl that just asked, “Is this legal?” We made it through several drafts before we realized that it was usually “maybe, maybe not, but probably no.” This was because staff at a typical nonprofit do not have the legal power to make decisions for the organization.
However, you can grant your team added authority through your bylaws (and some incorporation documents your lawyer can help you with). So, that’s what we did. By establishing the staff as a member class of the organization, we were able to ensure that the decision-making power we worked so hard to structure actually remained with the staff. But this also meant we had to define each class and figure out how they work together to make decisions.
At The Appeal, when a decision requires a full organizational vote (a vote by the Staff Collective and Board classes), each holds a separate vote and a decision requires support from two-thirds of each quorum to pass.
This method serves two purposes:
- It means that if more board members than staff collective members are present at a vote (and vice-versa) one voting body can’t overpower another.
- It is logistically easier to hold staff and board votes separately than it is to get everyone in one place at the same time. Even if that place is Zoom.
Was it fun to think we were almost done and then have to go back and restructure our entire organization? Not really. But was it important? Absolutely.
Now, The Appeal has bylaws that ensure the structure of our organization will live on past the people who built it. And staff in the future will have a say in whether that structure changes.
5. Enact them!
Once our new bylaws were ready, we followed the process for enacting them, which meant the Staff Collective voted them in, and then the interim board approved them. Sometimes, legal compliance is as boring as it sounds.
Our last act of resistance to nonprofit norms was to make sure our team retained its power over our bylaws. Our rules grant the Staff Collective the exclusive authority to amend the bylaws and only give the Board of Directors the power to veto amendments if they amount to organizational mismanagement/malfeasance. This means that our board can never change the structure of the organization on its own.
If you’re as into nerding out on bylaws as we are, feel free to reach out if you want to chat more. We love mechanisms that allow for organization innovation and we can talk about bylaws for hours.