Nonprofit Law Jargon Buster – Voting Members vs. Self-Perpetuating Boards

Nonprofit Governance MistakesWhen forming a nonprofit corporation, it is important to decide whether the corporation will be board driven or member driven. If the corporation is board driven, there are typically no members or the members have very limited rights. If the organization is member driven, the members are typically voting members who have the power to elect and remove members of the board of directors.

Voting Members. Voting memberships are useful when an organization’s founders want the organization to be democratically controlled by its constituents. Voting memberships structures are commonly used by member driven organizations such as social clubs, churches, chambers of commerce and trade associations. In such cases, the organization exists to serve its members and its makes sense for control to be vested in the members.

When considering whether to include voting members in a nonprofit corporation, it is important to understand that voting members of a nonprofit corporation are generally analogous to shareholders of a business corporation. Voting members have statutory rights under state law; therefore, it is important to clarify the right of members to avoid inadvertently creating a voting membership class and vesting ultimate control in the members when that is not your intention. Once a membership has been established, it may be difficult to eliminate, and it is likely to be impossible to change without the consent of the members.

Voting memberships can also complicate the governance of a nonprofit corporation. For example, voting membership corporations must keep up with noticing and documenting meetings of the members in addition to board of director meetings. The membership roster must be kept up to date to know who is eligible to vote.

Voting membership corporations can also be fickle. If the requirements for membership are set too low, it is possible for factions within the membership to sign their supporters up as members and shift the direction of the nonprofit corporation. One such case includes the well-publicized struggles at the Sierra Club. In the Sierra Club dispute, a faction developed that supported an anti-immigration agenda offensive to many of the Sierra Club's longtime supporters and allies. The anti-immigrant faction encouraged its supporters to send in their $25 dues payment so that they could gain the right to vote at the annual meeting. In the end, the incumbents were successful in fending off the takeover attack. The Sierra Club case was unusually high profile; however, similar scenarios regularly play out in nonprofit boardrooms across the country.

Self-perpetuating Boards. In contrast to corporations with boards elected by voting members, most charities are governed by self-perpetuating boards. Self-perpetuating boards simply vote for their own replacements. In a nonprofit with a self-perpetuating board, the Board of Directors is typically the ultimate seat of authority within the organization. Self-perpetuating boards tend to be more stable but they can become insular and unresponsive to the needs of constituents if their ranks are not regularly refreshed.

It is also possible to combine a self-perpetuating board with nonvoting members. Nonvoting members may be required to pay dues and receive certain program benefits. For example, many museums sell memberships that permit a member to gain free admission annual admission to exhibits and to receive certain other benefits such as gift shop discounts, exhibit previews and invitations to special events. However, such memberships do not typically include voting rights or any special privileges related to governance of the organization. Non-voting memberships are useful in some organizations but organizations must take extra care to define and limit the rights of non-voting members because where governing documents are ambiguous or unclear, state law will fill in the blanks and may grant unintended rights to members.

Ellis Carter is a nonprofit lawyer with Caritas Law Group, PC. To contact Ellis, call 602-456-0071 or email us at

17 thoughts on “Nonprofit Law Jargon Buster – Voting Members vs. Self-Perpetuating Boards

  1. I am a member of a 501(c)(3) non profit corporation in the State of WA. The corporation is and has been from the beginning a membership driven non profit. It was set up in 1980. The most recent board has consulted an attorney who says essentially what we are doing and have done is illegal under WA law. By-law changes must be voted in by a majority of the voting members present at the Annual General Meeting. New policies have to be approved at the AGM as well. A 2/3 majority of voting members can overturn anything that the Board implements at the AGM. The attorney consulted by the Board thinks we should put all reliance on the Board and make voting member decisions at the AGM advisory only.

  2. I’m confused kinda. If someone was appointed in a spot but was not voted in by the board does that person have the right to vote on anything or motion on anything. This is a non profit organization for football

  3. We have a 501(C)3 neighborhood association in Oregon. A change to our By-Laws regarding Eligibility for voting Membership was approved by the Board of Directors and will be presented to the Members at a General Meeting for confirmation. Do the Board of Directors also vote at the meeting regarding confirmation? If there is an objection to the change and a motion is made to change the wording, which would significantly change the Eligibility guidelines, would the Board of Directors vote on the motion?
    In general, do the Board of Directors vote on business items at a Membership meeting?

  4. Are voting members in non-for profit the same as shareholders in for-profit corporations? If yes what do they get in exchange to their shares. If no what would motivate them to contribute their dues knowing that by the law, they are not to be compensated by any mean.

  5. We have a Texas nonprofit 501c3. The By-Laws have voting members eligibility with three months dues paid.

    By-Laws Section 1 1.1 : These By-Laws may be amended only by a – majority vote of the entire -Voting Membership. The early voting methods set forth in Section 10.7 herein shall apply to vote(s) to amend these By-Laws.

    My question is what is meant by “entire -Voting membership” and does it mean the same as just members present voting on the amendment to ByLaws or does it mean every member with three months paid dues that are eligible to vote?

  6. Is it correct that to qualify for a 501 C 6 status, you MUST have members? Forming a group with a self-perpetuating board, but the wording on the IRS site makes it seem as if you NEED members to qualify. Can you shed any light on this?

  7. Regarding multiple bylaw amendments being offered at once for approval by the voting members, your answer of 25th March 2013 said state law must be consdered to determine if the amendments can be voted on separately. I have looked at Washington DC’s latest code for non-profit corporations Chapter 29, subchapter VIII &29-408 all sections, and the code is mute on this issue. So can a DC non-profit decide for itself how to list the amendments for voting? The non-profit I am a member of is proposing quite a large change in its constitution , one being the way amendements to the constitution will be effected in the future — members will loose their voting rights and the Board of Directors will be able to amend the constititution without asking the now non-voting members. Many of the proposed amendments are reasonable and I would vote yes, but the one on how to amend the constitution in the future I would vote no. Can the non-profit separate the latter from all the other amendments in the ballot?

  8. Very helpful article. We have a non-profit (a performing arts organization) that explicitly states that the corporation has no members. However, we do have “voting participants.” It’s not explicitly stated in the by-laws what these voting participants can actually vote on, but in our practice, they elect board members and officers every two years. Have you seen any structure like this before? Thanks.

  9. I’m deeply concerned to have my favotite membership nonprofit memberdriven. The articles and bylaws seem to support that view, but the state (Oregon) nonprofit statute miros language from the Model nonprofit corporation act os the 1980’s is saying:
    “A person that does not retain a right to vote on more than one occasion to elect a director or directors is not a member.”

    The Bylaws provide member voting at special meetings and aso for the exclusive purose of adopting bylaws. Is it clear that where membership and voting for directors at the annual meeting depend on paying an annual fee does the phrase “retain a right to vote” point to anything more than paying dues?

  10. Can a membership organization that gives voting rights to due paying members write their bylaws that limit the voting rights of other paying members such as minors under 18 yrs old?

  11. Our nonprofit uses written ballots. There is confusion over the statutory language that says a written ballot must set forth each proposed action with an opportunity to vote yes or no. Some feel each stand alone matter (bylaw amendments e.g.)must be presented individually and others feel all proposed actions (several bylaw amendments e.g.) can be lumped under one question. Any thoughts?

  12. I find your article very helpful. However, I do have the following question: Can the bylaws of a membership based nonprofit specifically say that members have no voting rights?

  13. Would a membership organization with classes of members have the Directors elect its officers and the members elect the Directors?

  14. This is very useful for a lake association amending 15 yr old by-laws. In forming another non-profit years ago, I was advised by an atty that the self-perpetuating form of governance caused more scrutiny by the government b/c it was (for lack of a better description) “less democratic”. Does anyone know if this is true?

  15. We have Articles of Incorporation and bylaws defining us as a member corporation. How do we change those to a non-member corporation, ruled by an independent board?

    Can you recommend sample bylaws and reading for us? Thank you.

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