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Vol. 43, No. 4

Diversity, equity, and inclusion in nonprofit bylaws

by Michele Berger

About the Author

Michele Berger, an associate at NEO Law Group and a frequent contributor to the firm’s Nonprofit Law Blog, is a nonprofit and exempt organizations attorney. She has assisted clients with nonprofit formation, exemption, charitable registration, fiscal sponsorship, property tax exemption, international grantmaking, bylaws review, and on various governance matters. Michele has also led seminars for emerging nonprofit leaders, presented for the Foundation Center, produced short videos on startup issues, and co-authored articles for The Nonprofit Quarterly and the Alameda County (Calif.) Bar Association Blog.

(Note: This guest article first appeared on the Nonprofit Law Blog and is excerpted here with permission from NEO Law Group. The original article applies to nonprofits of any type. In this excerpted version, we have focused on a few points that may help inform critical thinking and discussion about a bar organization’s bylaws and whether there are ways that they can be brought into better alignment with the bar’s ongoing work in diversity, equity, and inclusion.)

Nonprofits should be at the forefront of encompassing diversity, equity, and inclusion (DEI) into their governance and operations. While discussions regarding DEI are increasingly prevalent in the nonprofit sector, the next, more difficult, step forward is to turn the discussions into action. How do we, as part of the nonprofit community dedicated to the benefit of the public, effectuate our commitment to DEI? What steps can we take to make our organizations more diverse, equitable, and inclusive?

Commitment to DEI may be demonstrated through leadership, governance policies, recruitment, power-sharing, and importantly, accountability. From a corporate law perspective, one way to lock DEI in as a core value of an organization is to include DEI principles and language into an organization’s bylaws. As a manual for the directors and officers in governing the organization, bylaws that include DEI provisions function as a sign that the organization will devote meaningful resources to those values.

In considering where and how DEI principles might be incorporated into the bylaws, a board might review the document section by section, focusing on how each may impact, or be modified to impact, DEI favorably or adversely. For an organization whose mission is racial justice-oriented, it may be especially important to set forth specific DEI-related goals (rather than just aspirational language), that if not met, will cause the organization to be out of compliance with its bylaws.

The following list is intended to help a board generate its own discussion on how it might incorporate DEI in the bylaws:

  • Qualifications of Directors – The organization should be sensitive to whom it may be excluding through its qualifications for the position of a director. Does the organization have a “get or give” requirement (meaning that each director must donate or raise from others a certain amount of money for the organization each year) or a qualification regarding the individual’s educational background? Such requirements may be important for many reasons, but the board should also consider how those requirements exclude individuals from an array of backgrounds, which could ultimately harm the organization.
  • Principal Office – An organization might consider how the location of its office may have some DEI consequences and whether it is important to include specific considerations in determining where the office location is. For example, the bylaws might include language such as, “We aspire to locate this corporation’s principal office in an area that is consistent with the mission of this corporation” or “We will consider the following factors in determining the principal office of this corporation: [e.g., beneficiaries, staff, mission].”
  • Compensation – The board might consider including in the bylaws certain provisions regarding compensation, such as a statement that the corporation must pay all employees a fair and reasonable wage, as to both the corporation and the employees. Additional external and internal compensation equity principles might also be added.
  • Meetings – In most states, including California, board meetings are permitted to be held by “conference telephone, electronic video screen communication or electronic transmission” so long as each director can hear one another or can communicate concurrently, depending on the medium. In consideration of the organization’s DEI values, a director’s ability to participate in meetings remotely (in accordance with state law) should not necessarily be discouraged. Such form of participation may improve the board’s geographical diversity and also might help in the recruitment and retention of a director who might otherwise have an access barrier in serving as a director.
  • Conduct of Meetings – Traditionally, a chair of the board presides over board meetings and is responsible for setting the tone and guiding discussions and board actions. One way to encourage diversity in thought and possibly deliberate through a different lens is to consider a provision in the bylaws permitting other directors to chair meetings. In addition, from time to time, allowing different directors to prepare agendas and/or preside over certain board meetings can also advance the organization’s DEI values.

By reviewing the bylaws and considering where DEI principles can be included, the board will be forced to think through what level of commitment to DEI is desired for the organization. Of course, the board shouldn’t include requirements that it cannot meet; however, the board can show its commitment and readiness to be held accountable when the goals it sets out in the bylaws are not met.

Additional reading