The Power of Well-Drafted Church Bylaws
By H. Robert Showers, Esq.
Fifty years ago, few people—especially churchgoers—would have dreamed of suing the church. However, the legal climate today has changed dramatically, and lawsuits against churches are increasingly common. Fortunately, every state except West Virginia now permits churches to incorporate.1 Incorporation is a powerful tool for churches and member nonprofit organizations to protect themselves from litigation and legal liability.
The incorporation process is a splendid opportunity for a church to draft Bylaws that can act as a high-level operation manual (and also comport with the church’s new Articles of Incorporation). This article emphasizes why every church and nonprofit should adopt well-drafted Bylaws with risk management provisions that are appropriate for the 21st century. This article also outlines the advantages that churches can gain by adhering to their Bylaws. These suggestions for effective Bylaws stem from the author’s long experience with the church incorporation process, and his experience handling lawsuits in which well-crafted Bylaws would have reduced or eliminated injury to the church.
Churches should draft their Bylaws for times of crisis and dispute. Effective Bylaws are critical to navigating difficult times without resort to courts—otherwise, churches risk people voting with their feet and leaving the church over irreconcilable disagreements. Bylaws also must comply legally with state corporate and IRS provisions. A church should match its Bylaws to its actual governing structure, applying best practices and risk management to protect the church and its ministries for life in the 21st century. In the process, a church should confirm that its governing structure has the appropriate checks and balances to prevent one person or group from hijacking the church.
Churches and other nonprofits are subject to their governing documents, which—for each church—generally include Articles of Incorporation, a Constitution (although not legally required), a Policies and Procedures Manual, and Bylaws.2
First, a church files its Articles of Incorporation with the State Corporation Commission (or other relevant entity, like a Secretary of State). The Articles typically state the church’s official name, purpose, directors, and IRS-required provisions. The IRS and most states require Articles and Bylaws for the incorporation process, along with an organizational meeting where churches adopt their Constitutions, Bylaws, and other resolutions.
Second, a church’s Constitution plays an important theological role in its three-part governing structure. The Constitution is generally the church’s controlling summary of its theological and spiritual rules. Articles of Incorporation primarily satisfy corporate and IRS legal requirements, and Bylaws are primarily operational, so a church should use its Constitution to spell out its beliefs and values. These can include ordination procedures, members’ covenants, and other theological points. Thus, if the church holds sincere religious beliefs about marriage (as between one man and one woman) or sexuality (as unmalleable and expressed only within marriage),3 the church should state those beliefs clearly in its Constitution. This defensive measure will protect the church throughout any employment or membership disputes over such contentious issues.
A church’s Constitution—unlike its Bylaws—should be difficult to amend, requiring much thought, deliberation, and prayer. Churches should not reconsider or overturn theological doctrine lightly. Therefore, the author recommends that churches set constitutional amendment notice periods that are longer than the notice periods for changing Bylaws. Most importantly, churches should require a super-majority vote to amend their Constitutions.
Third, a church’s Policies and Procedures Manual contains the church’s rules for day-to-day operations. The church board may change these rules as needed to adapt to the church’s evolving size and needs. Consequently, member notice and voting are less important here. Whereas the Bylaws provide a bird’s-eye view of a church’s governing and operational structure, the policies and procedures of the church provide detailed operational instructions for church ministries.
Finally, Bylaws are a church’s rules of internal government, which the church adopts through its Articles and under the theological premises of its Constitution. The Bylaws provide a grand overview of an organization’s operational structure. Unlike in a business corporation, where the individual who owns the most stock has the most control, “[T]he bylaws of a nonprofit corporation spell out the essential relationships of the participants. They are the power document of the organization.”4 Churches should adopt effective Bylaws for the following reasons:
- Bylaws are legally mandated for incorporated churches;
- up-to-date Bylaws allow churches to make their rules consistent with their practice;
- Bylaws define church members, leaders, and their powers; and
- Bylaws help churches manage risk in times of crisis or dispute.
These points appear in more detail below:
(1) Legal Requirements for Bylaws. The IRS and most states require Bylaws for any church that is incorporated (or seeking to incorporate). Nevertheless, unincorporated churches would still be prudent to adopt Bylaws. In fact, Bylaws are even more urgent for unincorporated churches because they lack the legal protections available to incorporated churches and nonprofits.
(2) Bylaws Consistent with Practice. Bylaws codify a church’s actual 21st-century practices. Bylaws are no mere formality—instead, they are a “living” document that encompasses a church’s history and theology, while also guiding operational structure. Consequently, the Bylaws should reflect a church’s theological views as expressed in its Constitution. Bylaws must also be practically applicable.5 To prevent Bylaws from becoming archaic and outdated, churches should create a smooth and swift amendment process. A short notice period and a simple majority vote will suffice for the average Bylaws amendment. Streamlining this process will ensure that Bylaws remain consistent with actual church operations.
(3) Church Governance in Bylaws. A church governance structure typically has four categories of people which the Bylaws should address: (1) Members (or not); (2) Board of Directors; (3) Officers; and (4) Teams and Committees.
(i) The Bylaws should define the following for Members: (1) The requirements to become a member; (2) the privileges and responsibilities of a member; (3) voting privileges; and (4) church discipline/removal from membership. Churches often get in trouble during a crisis or dispute by not defining who can vote, what matters will require a vote, what quorum is needed for a valid vote, what procedural rules govern (e.g., Robert’s Rules), the percentage for success on a vote (majority or some supermajority), and what notice is required and by what means (mail, verbal, email, etc.) for those regular or special meetings.
(i) The Bylaws should also define the church’s Board of Directors (otherwise known as a Board of Elders, Board of Deacons, Church Council, or Leadership Team). The Bylaws should indicate the following with regard to board members: (1) The process to become a board member; (2) the number, qualifications, and terms of board members; (3) the board’s powers; and (4) the process to remove a board member. A church may consider electing board members with a “staggered voting” or “rotating class” model (e.g., two three-year terms with a year off before reelection). In this model, the church would elect a new fraction of the board each year. This policy ensures continuity in church leadership, promotes fresh perspectives and ideas from new members, and allows long-time board members time off to refresh.6 This section of the Bylaws should also address the following procedural items for boards: meetings notice, quorum, transactions with interested parties, conflicts of interest, and unanimous written consent for actions without board meetings.
(iii) Bylaws should also define the church’s Officers, who are the day-to-day operators of the church. Most states require three officers: President, Treasurer, and Secretary. However, a church may have additional officers if desired. Often, the Senior Pastor is also the President, and he holds the President’s office as Pastor for the duration of his tenure. The President, however, can delegate some or all of his/her day-to-day management duties to the executive pastor and/or church administrator. The church/nonprofit should have terms for its Treasurer and Secretary, and should consider term limits for those officers. Clearly defining officers’ powers and duties in contrast to board powers and duties will help resolve many disputes. Although officers can also be directors, they need not be, and keeping these “hats” separate (with their corresponding duties and responsibilities) is key to a well-run church.
(iv) A church’s Bylaws should also define the church’s Teams and Committees—although this list needs to include only permanent (standing) committees and teams. For example, Bylaws should define the roles and responsibilities of committees for finance, nominations, or personnel. However, a church may consider including a separate clause for special teams or ad hoc committees that the church needs occasionally. This clause may refer the reader to the Policies and Procedures Manual, which should contain the details for these special committees. Because special teams and temporary committees are not daily church operations, a church should exclude those details from the Bylaws to maintain the document’s constant relevance. Because Bylaws are a high-level operational document, churches should not include transitory or unnecessary details.
(4) Bylaws Protections for Crisis and Dispute. A church should adopt and follow well-crafted Bylaws to manage risk in times of crisis or dispute. Although a church should always operate in accordance with its Bylaws, members often do not consult the document until conflict arises.7 Hence, Bylaws must clearly establish procedures and practices for such a time. New 21st-century liabilities and challenges for churches require new risk management and best practices that are often contained in the Bylaws of a church. Moreover, Bylaws need to answer all the questions that will be asked during a crisis or dispute (e.g., the firing of a pastor, an economic crisis, or a church split). If the church does not address these matters, its only fallback is a viable Biblical dispute resolution clause or other workable option for resolving these questions. Otherwise, the dispute and crisis inevitably will arrive in civil court (in full view of public media)—and a court is ill-equipped to address the underlying relational and theological issues that drive virtually all church disputes.
A church should define in its Bylaws at least two crucial protocols for crisis or dispute:
(i) The church should categorize and define its Disciplinary Processes. Church discipline generally addresses two categories: Biblical heresy and moral misconduct. A church has full discretion over its disciplinary categories; however, the church must establish those categories in the Bylaws, along with procedures to address any wrongdoing. The church must then honor the procedures it has established—otherwise, congregational confusion and ire will quickly arise.
In this section of the Bylaws, a church should include at least the following elements: (1) A statement of disciplinary figures; (2) a process for announcing church disciplinary occurrences to the general congregation; (3) a statement of the privileges revoked; and (4) a statement of the penalties incurred.
However, an incorporated church is not a typical business corporation. Thus, any disciplinary protocol must account for the church’s theological beliefs. Every church should direct its disciplinary practices toward the goals of repentance, reconciliation within the church, and rehabilitation of the individual. A Bible-believing church should not design its discipline simply for punishment.
Finally, any church that wishes to be fair with its members should follow basic due process—best accomplished by informing individuals of their wrongdoing and allowing them a hearing before a board of their peers. Christ’s commands require that a church strictly follow this protocol before rescinding an accused person’s membership.8
(ii) The church should include in its Bylaws a biblically-based Dispute Resolution Clause. The Bible commands Christians to resolve disputes with help from church members—especially pastors or elders—before turning to civil courts.9 Consequently, church Bylaws should require individuals involved in disputes to first seek counsel from pastors, elders, and other members. Additionally, the Bylaws should indicate that all discussions regarding such matters will be sealed in confidence.10 Guarding trust and keeping confidence are signs of Christian love and respect.11 Good behavior in this area also discourages gossip,12 invites confession,13 and encourages people to seek counseling when necessary.14 If personal counsel and mediation do not resolve the dispute, biblical wisdom points to binding arbitration—ideally within the church—as the next step.15 Churches can find best practices for arbitration at www.ICCpeace.org, or through similar Christian mediation/arbitration services.
However, a church must require that its members sign a waiver to prevent religious conflicts from going immediately to civil court. Such waivers are necessary for a church to prevent opportunistic appeal to secular authorities. To achieve this goal, a church may include a clause in its members’ covenant that requires all members to follow the Bylaws provisions for dispute resolution, church discipline, and confidentiality. A clause that contains these elements will ensure that members are aware of the church’s dispute resolution and disciplinary procedures. Consequently, this step will help shield the church from harmful litigation.
A church corporation’s organizational meeting is an excellent opportunity for asking old members to sign a new Members’ Covenant in which they agree to abide by the governing documents. When signed, this Covenant will bind members to the church’s management provisions, including church discipline, Christian dispute resolution, and the statement of faith. At this meeting, members are already adopting new governing documents, so the Members’ Covenant is a fitting capstone for the church’s incorporation (because the signing members can be the “charter members” of this new church corporation). A church should store its Members’ Covenant in a secure, fireproof location, along with its Bylaws and other governing documents. Secure storage ensures easy access if the church needs the documents for a time of dispute decades later.
Bylaws create greater transparency in the church by giving members a thorough explanation for the church’s governing rules. Bylaws also establish clear operational guidelines that reduce potential confusion and conflict within the church. Furthermore, Bylaws restrict abuse of authority by balancing church leaders’ powers and establishing procedures that protect members from discipline without due process and full notice. Finally, Bylaws reduce a church’s exposure to legal liability by requiring that potential lawsuits first go through Biblical mediation or arbitration before going to civil litigation.
The Bible guides Christians through living and serving in community with others, but Scripture is silent on church governance technicalities. These extra-biblical questions include issues such as the sufficient amount of notice to church members, appropriate term length for church officers, and property disposal at church dissolution. Bylaws are the best way to address these ambiguities, allowing churches to devote themselves to their missions without distraction.
Moreover, Bylaws allow a church to tailor its governing structure and dispute resolution according to its unique needs. Although an uninformed church might use another church’s Bylaws as a template, a wise church will hire an expert attorney to tailor Bylaws that will best serve that individual church. When finally in place, strong Bylaws are a powerful force to protect and grow the church. Thus, churches of every stripe should seek a church law expert who has defended dozens of churches in legal battles and written hundreds of bulletproof Bylaws. The church and nonprofit attorneys at Simms Showers have extensive experience in this field of complex law, having incorporated over 1,000 churches in the mid-Atlantic. This investment would be well worth the minimal costs for any church, because a strong set of Bylaws produces perennial fruit for years to come.
Legal Disclaimer: Simms Showers has prepared this article specifically to inform churches seeking to incorporate in the mid-Atlantic states. This article is not intended to provide legal advice or act as a substitute for competent legal counsel, which is the only true solution for the specific needs of each church. Readers are encouraged to consult trained and experienced legal counsel who specialize in tax-exempt and church law. Churches would be wise to take this step before redrafting any governing documents. Please contact Robert Showers firstname.lastname@example.org or Justin Coleman email@example.com for legal advice specific to your needs.
- West Virginia amended its Code in 2003 to allow church incorporation, but the state’s constitutional prohibition remains. For more information, see “West Virginia’s Complicated Relationship with Church Incorporation” on the Simms Showers church law blog, at https://www.simmsshowerslaw.com/west-virginias-complicated-relationship-with-church-incorporation/.↩︎
- RICHARD R. HAMMAR, PASTOR, CHURCH & LAW 247 (5th ed. 2019).↩︎
- For more information, see the Church Law articles on the Simms Showers blog at https://www.simmsshowerslaw.com/category/church-law/.↩︎
- Don Kramer, Bylaws Function as “Constitution” of Nonprofit Corporations, Don Kramer’s Nonprofit Issues, https://www.nonprofitissues.com/ready-reference/bylaws-function-%E2%80%9Cconstitution%E2%80%9D-nonprofit-corporations (last visited April 7, 2023).↩︎
- Church law expert Richard Hammar states that Bylaws should address at least the following details:
- Qualifications, selection, and expulsion of members.
- Time and place of annual business meetings.
- The calling of special business meetings.
- Notice for annual and special meetings.
- Quorums at meetings of the membership and church board.
- Voting rights and requirements.
- Selection, tenure, and removal of officers and directors.
- Filling of vacancies on the church board.
- Responsibilities of directors and officers.
- The procedure for amending bylaws.
- The procedure and voting requirements for purchases and conveyances of church property.
- The designation of standing committees (such as an audit committee, an investment committee, and an insurance committee).
- Hammar, supra note 2, at 252.↩︎
- Id. at 254.↩︎
- Kramer, supra note 4.↩︎
- See Matt. 18:15-17.↩︎
- SeeRom. 15:14; Gal. 6:1-2; Col. 3:16; 2 Tim. 3:16-4:2; Heb. 10:24-25, 13:17; James 5:16.↩︎
- Although churches should do their best to honor confidentiality, circumstances may require that church leaders reveal certain information to others. Thus, church leaders may disclose confidential information to appropriate people when biblically necessary, or when the law mandates such reporting (as in child abuse cases).↩︎
- SeeMatt. 7:12.↩︎
- SeeProv. 16:28, 26:20, 11:13.↩︎
- SeeProv. 28:13; James 5:16.↩︎
- SeeRom. 15:14.↩︎
- See Matt. 18:15-17.↩︎