Bylaws are usually written once, at formation, often from a template found online, and then never opened again. For most organizations that's a quiet, low-stakes oversight. For a 501(c)(3), it can become the document that an IRS examiner or a state regulator points to when something else goes wrong—especially when the articles of incorporation, which carry their own compliance requirements, contain similar gaps. A handful of recurring bylaw issues are worth checking now, before anyone else has reason to look.
No conflict-of-interest policy
The IRS doesn't technically mandate a conflict-of-interest policy to grant exemption, and Florida law does not impose a blanket requirement for all nonprofits (though specific obligations may apply to direct-support organizations and certain grant recipients), but both Form 1023 and Form 990 ask whether you have one. The absence of a conflict-of-interest policy is one of the fastest ways to draw scrutiny toward board transactions, vendor relationships, and compensation decisions that would otherwise pass without comment.
Board composition that doesn't match practice
Bylaws often specify a board size, officer roles, or committee structure that the organization stopped following years ago. If your bylaws say the board must have no less than nine directors and you've operated with five for three years, every vote taken by that board may face a quorum challenge or other governance questions under your own governing document—a detail that becomes very relevant during a dispute, an audit, or a grant application.
Vague or missing dissolution clauses
Tax-exempt status requires that, upon dissolution, remaining assets be distributed for one or more exempt purposes to another 501(c)(3) organization, or to a federal, state, or local government for a public purpose—not to members, directors, or founders. Bylaws that are silent or vague on this point don't pass IRS muster for tax-exempt status, regardless of whether the founders of the organization can contemplate future intentions to dissolve.
Amendment procedures nobody follows
Most bylaws specify exactly how they can be amended — notice periods, vote thresholds, board versus membership approval. Organizations frequently amend their practices without amending the bylaws that govern them, which means the written document and the lived reality of the organization quietly diverge over time.
No regular review cycle
Bylaws aren't meant to be permanent. As a nonprofit grows — adding staff, opening a second program, taking on government grants — governance needs change with it. Build in a review every two to three years so the document keeps pace with the organization, instead of becoming a liability nobody remembers to update.
Not sure when your bylaws were last reviewed? Schedule a consult and we'll take a look before it becomes a problem.
*This article is for general information purposes only and does not constitute legal advice nor create any attorney-client relationship.