The CVARC Governance Update ProjectCVARC Governance Update Project Page
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Information superceded by the adoption of the new governance documents at 15-NOV-2007 meeting
At the 15-NOV-2007 regular meeting, the club adopted the governance documents
with minor revision. The rest of the information on this page is retained for its historical significance. Other than this section, this the information on this page is as it was at the time of the November meeting.
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Table of Contents
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Club's authorization to pursue the projectAt the regular club meeting on 20-SEP-2007, the motion was made, seconded, and carried unanimously that the club's officers take the actions necessary to achieve 502(c)(3) status for the club, and a budget of $600.00 was authorized for this activity.
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Progress ChecklistThis checklist is adapted from the one suggested by the guidebook we are using for this process.
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Hours Spent on ProjectThis is an estimate of the total hours expended on this project:
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Guidebook
The guidebook we are using for this process is: How to form a nonprofit corporation, 8th editionExternal links to Nolo, Nolo's nonprofit organizations page, and the book at Nolo and the book at Amazon.
Another book that is influential in the development and review of some of the material presented here is one on parliamentary procedure--you know all that "Robert's Rules" stuff. While I have current issue material on the Robert's Rules of Order, I find that I prefer the presentation in, and especially the comparative brevity of, the following book (and almost half the book is seasoned, practical advice for the chair of any meeting): Cannon's Concise Guide to Rules of OrderExternal link to the book at Amazon.
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Pennsylvania ResourcesThere are several useful resources related to nonprofit and tax-exempt issues published on the web. These have proved to be useful in this project. These external links were current at the time this page was published.
CVARC's Public Record at PA Dept of State
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IRS ResourcesThere are several useful resources related to nonprofit and tax-exempt issues published on the web. These have proved to be useful in this project. These external links were current at the time this page was published.
Tax Information for Charities & Other Non-Profits
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Club's Governance Status at project startOur club, when formed in 1955, was set up to be governed by a constitution and by-laws. These documents have been amended from time-to-time, the most recent in 1995. The version of these documents that was current at the start of this governance update project are these from 1995. They show proposed amendments; the club's minutes bear record that those amendments were adopted during the November 1995 club meeting. These documents are copies of the Articles of Incorporation as filed on 26-MAY-1977 with Pennsylvania, and as on record as of 31-MAY-1977 with Pennsylvania. This link will show the club's public record as known to the PA Dept of State.
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What does Articles, Constitution, Charter, and Bylaws mean?As the governance of a organization is discussed, often the terms
Articles of Incorporation is the document that is, as required by statute, filed with the state in which the corporation is formed. It covers the particulars about organization's address, directors, and states its corporate powers. Among other things, this document states the business purpose of the organization as registered with the state--generally the corporation is limited to doing the activities so identified. Sometimes, this is called a charter. Charter is slightly different from the Articles of Incorporation in that the charter is the state's response to the corporation's filing of its articles. The charter is the granting of permission for the organization to engage in the purposes declared in the articles. Constitution (in this context) is the document that contains the basic rules by which an organization is governed; the key point is that this is both a written document, and is the most fundemental of the rules. Bylaws are a listing of the rules adopted by an organization for the government of its members and internal affairs. These bylaws are often thought of as a type of secondary rules from the fact that the bylaws are subordinate to the articles of incorporation or constitution. However, the word history suggests a slightly different meaning from that of secondary rules--recorded usage of the word bylaw predating the "secondary" meaning directly means the "a body of customs or regulations, as of a village, manor, religious organization, or sect", and hence our contemporary meaning of the laws or rules governing an organization's internal affairs. So what does this mean for CVARC? In the view of the project advocate, the club was formed in 1955 with a Constitution and Bylaws registered with, and chartered by, the ARRL. Later, in 1977, the club filed Articles of Incorporation with the Pennsylvania as a nonprofit, and received a charter from the state to do business as a registered nonprofit. At this time, the club retained its original bylaws as amended, partly because it kept its internal structure across the incorporation. The club is now, in 2007, seeking 501(c)(3) tax-exempt status. The guidebook being used for the club's tax-exempt quest seems to collapse the meaningful guidance documents into the articles of incorporation and the bylaws, along with the charters from the state and the IRS. With the club pursuing 501(c)(3) tax exempt status with the IRS, certain changes are required to the documents that govern the club. The articles of incorporation need to be amended to include the required language signifying the corporations intent to both be a tax exempt entity, and be governed by the tax exempt rules. And while it seems that there is no firm rule from the IRS on how an tax exempt organization is internally governed, there seems to be much suggestion that such an organization be governed by a board of directors. Thus it seems prudent to consider such a change to the club's internal governance. Among other things, having a board may make it easier to undergo an audit of operation, as it seems easier to demonstrate that as a whole the club has met the statutory duty of care (or common-sense, active, involvement) in the corporation's management and operation. In general, since our club was first incorporated "with members", as we reform our club's internal workings to include the concept of governance by a board of directors, the members will select the board of directors, and the board will then elect the officers. The officers manage the day-to-day affairs of the club under the oversight of the board of directors. The directors collectively as the board remain legally, financially, and morally responsible for the management and operation of the club. Members, then, are responsible things such as the election and removal of directors, amendments of articles and bylaws, and approvals of mergers and dissolution of the club. References:
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Amendment(s) to Articles of IncorporationThe proposed amendment to the club's articles of incorporation are here. Compare these changes with the original articles as filed in 1977, found here. There is a largish chunk of IRS expected boilerplate language; its presence lubricates the review and granting of the requested 501(c)(3) exemption; its absence will almost certainly scuttle the request. Also, the word fraternalism, was removed from the stated purpose because, while explicitly permitted in the PA statute for nonprofits, is one of the bad words to have in a 501(c)(3) request, as these words are often used by the IRS to re-classify the request into a different charity grant request, such as 501(c)(4) and end up as as a social organization. Similarly, there were several magic words, such as scientific and education, added to the purpose as these reflect favorably to the 501(c)(3) request.
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Amendment(s) to ConstitutionEssentially, the club's constitution has become technically irrelevant with respect to its role of stating the internal structure of the club. The club's stated purpose has been carried forward into the Articles of Incorporation, and with the proposed change from a "association of members" to a "membership corporation with a board of directors", most all of the particulars of internal operations as stated in the original and amended Constitution has been superseded by the guidance of the proposed bylaws. Thus the project advocate recommends retiring the club's current Constitution when the new Bylaws are approved. This seems harsh, but once the proposed bylaws have been reviewed, it will likely become apparent that the constitution has become superseded. It should, however, be ever maintained within the records book as an important document of the club's history. If, however, such a radical repeal of the club's Constitution is abhorrent, a possible amendment is suggested here. You may compare these suggested changes to the current constitution found here. After glancing over the changes to the constitution required to bring it into synchronization with the proposed bylaws the alternative suggestion of simply replacing the current constitution and bylaw combination with the Articles of Incorporation and Bylaws may not seem so radical.
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Amendment(s) to By-LawsRegardless of whether the Constitution is radically amended, or simply repealed, these bylaws will figure significantly in the ongoing governance of the club as a nonprofit tax-exempt organization. Here are the proposed bylaws. These are adapted from those presented in the guidebook we are using in this process of becoming tax-exempt. The proposed bylaws are seemingly lengthy, but they do cover the all important points that the IRS will be specifically looking for as they consider our request for tax-exempt status. Some portion of the extra material covers the new board of directors; a section is adapted from the ARA's bylaws covering the formation of special interest groups; the rest of the content is carefully stated information about the officers and the members. Inevitably, a fair amount of legal language permeates this document--some of it is actually necessary given the organizations (the IRS and the Pennsylvania Departments of State and Revenue) that will have an interest in it. Aside from being about 25 pages long, it is not really that complex of a document. To put it into perspective, this project's advocate has dealt with far more complex documents specifying the expected performance of machine tools he works with (sometime these documents are measured shelf-feet--how many feet of shelf space the binders occupy). The proposed bylaws are more complex than the current bylaws, but then a tax-exempt nonprofit organization is somewhat more complex than either the simple association originally formed or the club's operation since then.
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Introducing Standing RulesStanding rules are the essential rules for the conduct of a meeting. Bylaws relate to the organization of an association; and as such bylaws are superior in authority to standing rules. One clear advantage this seen by the project's advocate is that standing rules reduce to about 6 pages all of the necessary parliamentary procedure to govern most every aspect of any meeting. Hitherto, the club's meetings have been governed by a Robert's Rules of Order (on the order of 1,100 pages of dense text on parliamentary procedure). As you read over the proposed standing rules, it is no accident that they might seem familiar. These are the guidelines that the project advocate has attempted to follow in his role as President and meeting Chair during 2007. Here are the proposed standing rules for the club to adopt with the new bylaws.
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The Corporate Records Book
Every corporation needs a records book. Hence we will start keeping the formal records consistent with our nonprofit and tax-exempt status. From these records will be created the required forms for submission to the IRS and to state and local authorities as required by law.
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Information Mandated to be made available to the PublicCertain information is mandated by law to be made readily available for public inspection. This includes several years worth of certain filings. This information will published, in a timely fashion, as required by law. It is the view of the project's advocate that such public disclosure be made by means of publishing the required content on the club's website.
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