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May nonprofit have “members” when articles of incorporation say no?

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May nonprofit have “members” when articles of incorporation say no?

I was recently appointed to the board of directors of a 501(c)(3) nonprofit corporation. The articles of incorporation say the corporation shall have no members. Last year the corporation chose to assess membership dues on its volunteers in lieu of holding a fundraising event.  This year the corporation is referring to the volunteers as “members” and asking them to pay membership dues. Is this legal, or does the corporation have to change the articles of incorporation in order to have members and assess membership dues?

A lot of nonprofits have people they call “members,” but who don’t have the legal rights of real voting members.  Members in the legal sense normally have rights, like shareholders in a business corporation, to vote for directors, remove them, and approve or oppose fundamental changes such as merger or dissolution.  It is this kind of member that is referred to in articles of incorporation.  It doesn’t appear that this corporation has any real voting members.

In order to enhance the spirit of belonging, and to raise more money, many charities have classes of honorary or contributing members.  I am a “member” of the local public broadcasting company, but don’t vote on directors, programming or any other matter of governance.  I am a “member” of the art museum but have nothing to say about what art the museum ought to acquire or get rid of.  I am a contributor.  I get a thank-you note, but I have no legal powers.

The use of the term “member” is just another example of the confusion in the language of the nonprofit sector.  It can have at least two very dissimilar meanings.  You have to look at other factors to know what it actually means.

For more on members in bylaws, see Ready Reference Page: “Bylaws Function as ‘Constitution’ of Nonprofit Corporations” or participate in our webinar “Bylaws: The Art and Science of Making Them Work.

Tuesday, January 29, 2019

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