Article 1 - NAME AND PURPOSE
Section 1 - Name
This corporation is organized exclusively for one or more of the purposes as specified in Section 501(c)(3) of the Internal Revenue Code or any corresponding version of future federal tax code, including, for such purposes, the making of distributions to organizations that qualify as exempt organizations under Section 501(c)(3) of the Internal Revenue Code or any corresponding version of future federal tax code.
Section 2 - Purpose
Makelab Charleston is organized for the purpose of providing a space in Charleston for artistic, technical, and educational pursuits.
Subject to the purposes defined in Section 1, the corporation shall:
- Provide a space for technical and artistic collaboration
- Foster an environment of creativity and education
- Freely share and distribute research and discoveries
- Engage new members and establish public outreach
Article 2 - MEMBERSHIP
Section 1 - Types of membership
There shall be two classes of membership; Full Member and Junior Member. A member can only be categorized into one class at any given time.
Section 2 - Definition of Full Membership
Sub-Section 1 - Eligibility
To be considered a Full Member a person may:
- Be a founder. A founder is defined as any person who has attended a meeting and paid Full Membership dues before space acquisition.
- Have successfully been a Junior Member in good standing for 3 months and have attended at least 3 meetings. The applicant must present themselves to a Board Member to change membership, or
- Have successfully been a Junior Member in good standing for 3 months and pass a simple majority vote by Full Members (in case of inability to attend meetings). The applicant must present themselves to a Board Member to change membership.
Sub-Section 2 - Privileges
Full Members enjoy the following privileges:
- All privileges retained by Junior Members
- Full access to all work areas of the space
- Ability to vote on Board Members during election
- Ability to vote on petitioning Junior Members
- Ability to downgrade membership due to mitigating circumstances while retaining the right to become a Full Member again unencumbered at a later date
- Ability to submit suggestions for acquisition for the space to the Board
Sub-Section 3 - Responsibilities
Full Members must fulfill the following responsibilities and limitations:
- Pay monthly Full Member fee.
- Follow Junior Member supervision policies when a Junior Member is present
- Follow all responsibilities imposed upon Junior Members except the Junior Member fee
Section 3 – Definition of Junior Membership
Sub-Section 1 - Eligibility
Any community member who wishes to become a Junior Member may do so at any time by abiding by the responsibilities laid out in Sub-Section 3.
Sub-Section 2 - Privileges
Junior Members enjoy the following privileges:
- Full access to all public areas of the space
- Access to work areas of the space while a Full Member is present
- Supervised access to all equipment that the member is certified on
- Use of consumable materials according to Policy guidelines
Sub-Section 3 - Responsibilities
Junior Members must fulfill the following responsibilities and limitations:
- Pay monthly Junior Member fee
- Abide by the corporation's Policies
- Be a member in good standing in order to use the space
Section 4 - Fees and other obligations
The power to set and collect fees will be given to the Board of Directors. Fees for all members shall be set by a majority vote of Full Members during the first quarterly Board meeting, or if so requested by a Special Meeting. Suggestions of fee changes will be taken from Full Members.
Section 5 - Resignation and Termination
Sub-Section 1 - Resignation
A member may resign from membership at any time by submitting notice to the Board and forfeiting all property of the corporation at that time.
Sub-Section 2 - Termination
The Board reserves the right to expel a member of the corporation if they have been found in violation of the corporation's policies. The decision to expel the member must be made with fair and reasonable consideration of all relevant facts and circumstances.
- Notice of expulsion must be presented in writing using first class or certified mail to the member's last address on corporate record
- Notice of expulsion must occur 15 days prior to effective expulsion date
- Member may take the opportunity to be heard by the Board either written or orally no less than 5 days prior to the effective expulsion date
- Expulsion does not release member from any dues, fees, or assessments garnered before expulsion from corporation
Article 3 - MEETINGS
Section 1 - Regular meetings
A regular meeting shall be held quarterly on a day, time, and location agreed to by a majority of the Board quarterly. The Secretary will post the scheduled meeting time no later than two weeks prior to the meeting. The Secretary will approve and post an agenda for the meeting no less then forty-eight hours before the beginning of the meeting. Any issues which members wish to have discussed and voted upon at the meeting must be submitted via email to the Secretary no less then seventy-two hours before the meeting.
Section 2 - Annual meetings
A meeting shall be held once a year during the month of January to elect Officers, receive reports on the activities of Makelab Charleston over the past year, and vote on the direction of Makelab Charleston for the coming year. Reports will be given by the President and Treasurer regarding the state of the corporation. Any issues which members wish to have discussed and voted upon at the meeting must be submitted via email to the Secretary no less then forty-eight hours before the meeting.
Section 3 - Special meetings
A special meeting may be called by a Board Member or by 5 percent of Full Members. Full Members must submit a signed and dated demand of meeting to a Board Member. After receiving the demand for a special meeting, the Board has thirty days from delivery to set the time and place of the meeting. If the time and place is not set within the thirty days, any signing Full Member of the demand notice may set the time and place of the meeting. The meeting must occur within Berkeley, Dorchester, or Charleston county.
Section 4 - Quorum
For general voting purposes, a member quorum shall be declared as the number of members that are present at the meeting. A Board quorum shall be declared when a majority of the Board Members are present. For elections, an election quorum shall be declared when a majority of the Board Members are present and ten percent of Full Members are present.
Section 5 - Voting
All non-election issues to be voted on during a meeting shall be passed by a simple majority of members present who have voting rights on the given issue. If there is more then one option being considered for a given issue, then runoff votes will be held until a majority is reached. Ties shall be broken by a majority decision of the Board. Ties of the Board shall be decided by majority of Board Officers. If a tie continues due to abstention then the President is the deciding vote. Items that have been submitted to the Board for voting shall be reviewed by the Board at the Quarterly Meeting. If a majority of the Board Members agree to hear the item at the Meeting, the item will be voted on by the Full Members at the Quarterly Meeting.
Section 6 - Proxy Voting
Any Full Member may vote by proxy by submitting their vote on issues that are on the agenda to the President and Secretary at least twenty-four hours prior to the Meeting.
Section 7 - Notice
Notice shall be posted for all meetings at least fourteen days prior to the date on which the meeting is scheduled. The notice shall be posted on the Makelab Charleston website and in all subsequent newsletters.
Article 4 - BOARD OF DIRECTORS
Section 1 - Role
Subject to the provisions of the laws of South Carolina and any limitations in the articles of incorporation and these bylaws relating to action required or permitted to be taken or approved by the members, of this corporation, the activities and affairs of this corporation shall be conducted and all corporate powers shall be exercised by or under the direction of the Board of Directors.
It shall be the duty of the Directors to:
- Perform any and all duties imposed on them collectively or individually by law, by the articles of incorporation, or by these bylaws;
- Appoint and remove, employ and discharge, and, except as otherwise provided in these bylaws, prescribe the duties and fix the compensation, if any, of all Officers, agents, and employees of the corporation;
- Supervise all Officers, agents, and employees of the corporation to assure that their duties are performed properly;
- Meet at such times and places as required by these bylaws;
- Register their addresses with the secretary of the corporation, and notices of meetings emailed or telegraphed to them at such addresses shall be valid notices thereof.
Section 2 - Terms
Officers shall serve for two year terms, to be limited to two concurrent terms in the same position. The President and Treasurer shall be elected on even years and the Vice-President and Secretary shall be elected on odd years. Directors serve one year terms with no term limits.
Section 3 - Board size
The Board shall be composed of the defined Officers and the elected Directors.
Section 4 - Elections
Elections will be held at the annual meeting. Nominations for open positions shall be submitted to the Secretary no less than twenty-four days prior to elections. Nominations for elections shall be posted fourteen days prior to the election.
Section 5 - Eligibility
Any Full Member that is in good standing is eligible to serve on the Board or in any Officer position. Directors and Officers shall be of the age of majority in South Carolina.
Section 6 - Officers
Sub-Section 1 - President
The president shall be the chief executive Officer of the corporation and shall, subject to the control of the Board of Directors, supervise and control the affairs of the corporation and the activities of the Officers. He or she shall perform all duties incident to his or her office and such other duties as may be required by law, by the articles of incorporation, or by these bylaws, or which may be prescribed from time to time by the Board of Directors. Unless another person is specifically appointed as chairperson of the Board of Directors, the president shall preside at all meetings of the Board of Directors and at all meetings of the members. Except as otherwise expressly provided by law, by the articles of incorporation, or by these bylaws, he or she shall, in the name of the corporation, execute such deeds, mortgages, bonds, contracts, checks, or other instruments which may from time to time be authorized by the Board of Directors.
Sub-Section 2 - Vice President
In the absence of the president, or in the event of his or her inability or refusal to act, the vice president shall perform all the duties of the president, and when so acting shall have all the powers of, and be subject to all the restrictions on, the president. The vice president shall have other powers and perform such other duties as may be prescribed by law, by the articles of incorporation, or by these bylaws, or as may be prescribed by the Board of Directors.
Sub-Section 3 - Secretary
The Secretary shall:
- Keep public records of meetings and actions taken by the Board and voting members and assure that required corporate records are maintained. Keep at the principal office of the corporation or at such other place as the Board may determine, a book of minutes of all meetings of the Directors, and, if applicable, meetings of committees of Directors and of members, recording therein the time and place of holding, whether regular or special, how called, how notice thereof was given, the names of those present or represented at the meeting, and the proceedings thereof.
- Ensure that the minutes of meetings of the corporation, any written consents approving action taken without a meeting, and any supporting documents pertaining to meetings, minutes, and consents shall be contemporaneously recorded in the corporate records of this corporation. “Contemporaneously” in this context means that the minutes, consents, and supporting documents shall be recorded in the records of this corporation by the later of 1) the next meeting of the Board, committee, membership, or other body for which the minutes, consents, or supporting documents are being recorded, or 2) sixty (60) days after the date of the meeting or written consent.
- See that all notices are duly given in accordance with the provisions of these bylaws or as required by law.
- Be custodian of the records and of the seal of the corporation and affix the seal, as authorized by law or the provisions of these bylaws, to duly executed documents of the corporation.
- Keep at the principal office of the corporation a membership book containing the name and address of each and any members, and, in the case where any membership has been terminated, he or she shall record such fact in the membership book together with the date on which such membership ceased.
- Exhibit at all reasonable times to any Director of the corporation, or to his or her agent or attorney, or to any official of local, state, or federal government on request therefor, the bylaws, the membership book, and the minutes of the proceedings, of the Directors of the corporation, or any other maintained record or document.
- In general, perform all duties incident to the office of secretary and such other duties as may be required by law, by the articles of incorporation, or by these bylaws, or which may be assigned to him or her from time to time by the Board of Directors.
Sub-Section 4 - Treasurer
The treasurer shall:
- Certify and keep at the principal office of the corporation the original, or a copy, of these bylaws as amended or otherwise altered to date.
- Have charge and custody of, and be responsible for, all funds and securities of the corporation, and deposit all such funds in the name of the corporation in such banks, trust companies, or other depositories as shall be selected by the Board of Directors.
- Receive, and give receipt for, monies due and payable to the corporation from any source whatsoever.
- Disburse, or cause to be disbursed, the funds of the corporation as may be directed by the Board of Directors, taking proper vouchers for such disbursements.
- keep and maintain adequate and correct accounts of the corporation’s properties and business transactions, including accounts of its assets, liabilities, receipts, disbursements, gains, and losses.
- Exhibit at all reasonable times the books of account and financial records to any Director of the corporation, or to his or her agent or attorney, or to any official of local, state, or federal government on request therefor.
- Render to the president and Directors, whenever requested, an account of any or all of his or her transactions as treasurer and of the financial condition of the corporation.
- Prepare, or cause to be prepared, and certify, or cause to be certified, the financial statements to be included in any required reports.
- In general, perform all duties incident to the office of treasurer and such other duties as may be required by law, by the articles of incorporation of the corporation, or by these bylaws, or which may be assigned to him or her from time to time by the Board of Directors.
Section 7 - Directors
There shall be as many Directors as the members decide are necessary, the Directors shall be tasked with specific areas of responsibility and will be given the authority to fulfill those responsibilities.
Section 8 - Vacancies
When a vacancy exists on the Board mid-term, elections shall be held with proper notice.
Section 9 - Resignation and Termination
Any member of the Board may resign at any time by submitting a resignation in writing to the Secretary, President, or Vice President. A Director or Officer elected by members may be removed by the members only at a meeting called for the purpose of recalling the Director or Officer and the meeting notice must state that the purpose, or one of the purposes, of the meeting is recall of the Director or Officer.
Section 10 - Non-liability of Directors
The Directors shall not be personally liable for the debts, liabilities, or other obligations of the corporation.
Section 11. Indemnification by Corporation of Directors and Officers
The Directors and Officers of the corporation shall be indemnified by the corporation to the fullest extent permissible under the laws of this state.
Article 5 - COMMITTEES
Section 1. Executive Committee
The Board of Directors may, by a majority vote of its members, designate an Executive Committee consisting of a number of Board members not less than two and may delegate to such committee the powers and authority of the Board in the management of the business and affairs of the corporation, to the extent permitted, and, except as may otherwise be provided, by provisions of law.
By a majority vote of its members, the Board may at any time:
- Revoke or modify any or all of the executive committee authority so delegated
- Increase or decrease, but not below two, the number of the members of the executive committee
- Fill vacancies on the executive committee from the members of the Board
The executive committee shall keep regular minutes of its proceedings, cause them to be filed with the corporate records, and report the same to the Board from time to time as the Board may require.
Section 2. Other Committees
The corporation shall have such other committees as may from time to time be designated by resolution of the Board of Directors. These committees may consist of persons who are not also members of the Board and shall act in an advisory capacity to the Board.
Section 3. Meetings and Action of Committees
Meetings and action of committees shall be governed by, noticed, held, and taken in accordance with the provisions of these bylaws concerning meetings of the Board of Directors, with such changes in the context of such bylaw provisions as are necessary to substitute the committee and its members for the Board of Directors and its members, except that the time for regular and special meetings of committees may be fixed by resolution of the Board of Directors or by the committee. The Board of Directors may also adopt rules and regulations pertaining to the conduct of meetings of committees to the extent that such rules and regulations are not inconsistent with the provisions of these bylaws.
Article 6 - EXECUTION OF INSTRUMENTS, DEPOSITS, AND FUNDS
Section 1. Execution of Instruments
The Board of Directors, except as otherwise provided in these bylaws, may by resolution authorize any Officer or agent of the corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authority may be general or confined to specific instances. Unless so authorized, no Officer, agent, or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable monetarily for any purpose or in any amount.
Section 2. Checks and Notes
Except as otherwise specifically determined by resolution of the Board of Directors, or as otherwise required by law, checks, drafts, promissory notes, orders for the payment of money, and other evidence of indebtedness of the corporation shall be signed by the treasurer and countersigned by the president of the corporation.
Section 3. Deposits
All funds of the corporation shall be deposited from time to time to the credit of the corporation in such banks, trust companies, or other depositories as the Board of Directors may select.
Section 4. Gifts
The Board of Directors may accept on behalf of the corporation any contribution, gift, bequest, or devise for the nonprofit purposes of this corporation.
Article 7 - CORPORATE RECORDS, REPORTS, AND SEAL
Section 1. Maintenance of Corporate Records
The corporation shall maintain records in accordance with the document retention policy and the following at its principal office:
Sub-Section 1. Minutes
Minutes of all meetings of Directors, committees of the Board, and, if this corporation has members, of all meetings of members, indicating the time and place of holding such meetings, whether regular or special, how called, the notice given, and the names of those present and the proceedings thereof;
Sub-Section 2. Financial Records
Adequate and correct books and records of account, including accounts of its properties and business transactions and accounts of its assets, liabilities, receipts, disbursements, gains, and losses;
Sub-Section 3. Member Records
A record of its members, indicating their names and addresses and, if applicable, the class of membership held by each member and the termination date of any membership;
Sub-Section 5. Founding Documents
A copy of the corporation’s articles of incorporation and bylaws as amended to date, which shall be open to inspection by the members of the corporation at all reasonable times during office hours.
Section 2. Corporate Seal
The Board of Directors may adopt, use, and at will alter, a corporate seal. Such seal shall be kept at the principal office of the corporation. Failure to affix the seal to corporate instruments, however, shall not affect the validity of any such instrument.
Section 3. Directors’ Inspection Rights
Every Director shall have the absolute right at any reasonable time to inspect and copy all books, records, and documents of every kind and to inspect the physical properties of the corporation, and shall have such other rights to inspect the books, records, and properties of this corporation as may be required under the articles of incorporation, other provisions of these bylaws, and provisions of law.
Section 4. Members’ Inspection Rights
Each and every member shall have the following inspection rights, for a purpose reasonably related to such person’s interest as a member:
Sub-Section 1. Member Records
Full Members have the right:
- To inspect and copy the record of all members’ names, addresses, and voting rights, at reasonable times, upon written demand on the secretary of the corporation, which demand shall state the purpose for which the inspection rights are requested.
- To obtain from the secretary of the corporation, upon written demand on, and payment of a reasonable charge to, the secretary of the corporation, a list of the names, addresses, and voting rights of those members entitled to vote for the election of Directors as of the most recent record date for which the list has been compiled or as of the date specified by the member subsequent to the date of demand. The demand shall state the purpose for which the list is requested. The membership list shall be made available within a reasonable time after the demand is received by the secretary of the corporation or after the date specified therein as of which the list is to be compiled.
Sub-Section 2. Minutes
Full Members have the right to inspect at any reasonable time the books, records, or minutes of proceedings of the members or of the Board or committees of the Board, upon written demand on the secretary of the corporation by the member, for a purpose reasonably related to such person’s interests as a member.
Sub-Section 3. General
Full Members shall have such other rights to inspect the books, records, and properties of this corporation as may be required under the articles of incorporation, other provisions of these bylaws, and provisions of law.
Section 5. Right to Copy and Make Extracts
Any inspection under the provisions of this article may be made in person or by agent or attorney and the right to inspection may include the right to copy and make extracts.
Section 6. Periodic Report
The Board shall cause any annual or periodic report required under law to be prepared and delivered to an office of this state or to the members, if any, of this corporation, to be so prepared and delivered within the time limits set by law.
Article 8 - IRC 501(c)(3) TAX EXEMPTION PROVISIONS
Section 1. Limitations on Activities
No substantial part of the activities of this corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation (except as otherwise provided by Section 501(h) of the Internal Revenue Code), and this corporation shall not participate in, or intervene in (including the publishing or distribution of statements), any political campaign on behalf of, or in opposition to, any candidate for public office.
Notwithstanding any other provisions of these bylaws, this corporation shall not carry on any activities not permitted to be carried on (a) by a corporation exempt from federal income tax under Section 501(c)(3) of the Internal Revenue Code, or (b) by a corporation, contributions to which are deductible under Section 170(c)(2) of the Internal Revenue Code.
Section 2. Prohibition Against Private Inurement
No part of the net earnings of this corporation shall inure to the benefit of, or be distributable to, its members, Directors or trustees, Officers, or other private persons, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered and to make payments and distributions in furtherance of the purposes of this corporation.
Section 3. Distribution of Assets
Upon the dissolution of this corporation, its assets remaining after payment, or provision for payment, of all debts and liabilities of this corporation, shall be distributed for one or more exempt purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code or shall be distributed to the federal government, or to a state or local government, for a public purpose. Such distribution shall be made in accordance with all applicable provisions of the laws of South Carolina and the articles of incorporation. The reciever of distribution shall be determined by a majority of the Board.
Section 4. Private Foundation Requirements and Restrictions
In any taxable year in which this corporation is a private foundation as described in Section 509(a) of the Internal Revenue Code, the corporation
- Shall distribute its income for said period at such time and manner as not to subject it to tax under Section 4942 of the Internal Revenue Code;
- Shall not engage in any act of self-dealing as defined in Section 4941(d) of the Internal Revenue Code;
- Shall not retain any excess business holdings as defined in Section 4943(c) of the Internal Revenue Code;
- Shall not make any investments in such manner as to subject the corporation to tax under Section 4944 of the Internal Revenue Code; and
- Shall not make any taxable expenditures as defined in Section 4945(d) of the Internal Revenue Code.
Article 9 - CONFLICT OF INTEREST AND COMPENSATION APPROVAL POLICIES
Section 1. Purpose of Conflict of Interest Policy
The purpose of this conflict of interest policy is to protect this tax-exempt corporation’s interest when it is contemplating entering into a transaction or arrangement that might benefit the private interest of an Officer or Director of the corporation or any “disqualified person” as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations and which might result in a possible “excess benefit transaction” as defined in Section 4958(c)(1)(A) of the Internal Revenue Code and as amplified by Section 53.4958 of the IRS Regulations. This policy is intended to supplement but not replace any applicable state and federal laws governing conflict of interest applicable to nonprofit and charitable organizations.
Section 2. Definitions
- Interested Person. Any Director, principal Officer, member of a committee with governing Board delegated powers, or any other person who is a “disqualified person” as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations, who has a direct or indirect financial interest, as defined below, is an interested person.
- Financial Interest. A person has a financial interest if the person has, directly or indirectly, through business, investment, or family:
- An ownership or investment interest in any entity with which the corporation has a transaction or arrangement,
- A compensation arrangement with the corporation or with any entity or individual with which the corporation has a transaction or arrangement, or
- A potential ownership or investment interest in, or compensation arrangement with, any entity or individual with which the corporation is negotiating a transaction or arrangement.
Compensation includes direct and indirect remuneration as well as gifts or favors that are not insubstantial.
A financial interest is not necessarily a conflict of interest. Under Section 3, paragraph B, a person who has a financial interest may have a conflict of interest only if the appropriate governing Board or committee decides that a conflict of interest exists.
Section 3. Conflict of Interest Avoidance Procedures
- Duty to Disclose. In connection with any actual or possible conflict of interest, an interested person must disclose the existence of the financial interest and be given the opportunity to disclose all material facts to the Directors and members of committees with governing Board delegated powers considering the proposed transaction or arrangement.
- Determining Whether a Conflict of Interest Exists. After disclosure of the financial interest and all material facts, and after any discussion with the interested person, he/she shall leave the governing Board or committee meeting while the determination of a conflict of interest is discussed and voted upon. The remaining Board or committee members shall decide if a conflict of interest exists.
- Procedures for Addressing the Conflict of Interest. An interested person may make a presentation at the governing Board or committee meeting, but after the presentation, he/she shall leave the meeting during the discussion of, and the vote on, the transaction or arrangement involving the possible conflict of interest. The chairperson of the governing Board or committee shall, if appropriate, appoint a disinterested person or committee to investigate alternatives to the proposed transaction or arrangement. After exercising due diligence, the governing Board or committee shall determine whether the corporation can obtain with reasonable efforts a more advantageous transaction or arrangement from a person or entity that would not give rise to a conflict of interest. If a more advantageous transaction or arrangement is not reasonably possible under circumstances not producing a conflict of interest, the governing Board or committee shall determine by a majority vote of the disinterested Directors whether the transaction or arrangement is in the corporation’s best interest, for its own benefit, and whether it is fair and reasonable. In conformity with the above determination, it shall make its decision as to whether to enter into the transaction or arrangement.
- Violations of the Conflicts of Interest Policy. If the governing Board or committee has reasonable cause to believe a member has failed to disclose actual or possible conflicts of interest, it shall inform the member of the basis for such belief and afford the member an opportunity to explain the alleged failure to disclose. If, after hearing the member’s response and after making further investigation as warranted by the circumstances, the governing Board or committee determines the member has failed to disclose an actual or possible conflict of interest, it shall take appropriate disciplinary and corrective action.
Section 4. Records of Board and Board Committee Proceedings
The minutes of meetings of the governing Board and all committees with Board delegated powers shall contain:
- The names of the persons who disclosed or otherwise were found to have a financial interest in connection with an actual or possible conflict of interest, the nature of the financial interest, any action taken to determine whether a conflict of interest was present, and the governing Board’s or committee’s decision as to whether a conflict of interest in fact existed.
- The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement, and a record of any votes taken in connection with the proceedings.
Section 5. Compensation Approval Policies
A voting member of the governing Board who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member’s compensation.
A voting member of any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the corporation for services is precluded from voting on matters pertaining to that member’s compensation.
No voting member of the governing Board or any committee whose jurisdiction includes compensation matters and who receives compensation, directly or indirectly, from the corporation, either individually or collectively, is prohibited from providing information to any committee regarding compensation.
When approving compensation for Directors, Officers and employees, contractors, and any other compensation contract or arrangement, in addition to complying with the conflict of interest requirements and policies contained in the preceding and following sections of this article as well as the preceding paragraphs of this section of this article, the Board or a duly constituted compensation committee of the Board shall also comply with the following additional requirements and procedures:
- The terms of compensation shall be approved by the Board or compensation committee prior to the first payment of compensation;
- all members of the Board or compensation committee who approve compensation arrangements must not have a conflict of interest with respect to the compensation arrangement as specified in IRS Regulation Section 53.4958-6(c)(iii), which generally requires that each Board member or committee member approving a compensation arrangement between this organization and a “disqualified person” (as defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section 53.4958-3 of the IRS Regulations):
- Is not the person who is the subject of the compensation arrangement, or a family member of such person;
- Is not in an employment relationship subject to the direction or control of the person who is the subject of the compensation arrangement;
- Does not receive compensation or other payments subject to approval by the person who is the subject of the compensation arrangement;
- Has no material financial interest affected by the compensation arrangement; and
- Does not approve a transaction providing economic benefits to the person who is the subject of the compensation arrangement, who in turn has approved or will approve a transaction providing benefits to the Board or committee member.
- The Board or compensation committee shall obtain and rely upon appropriate data as to comparability prior to approving the terms of compensation. Appropriate data may include the following:
- Compensation levels paid by similarly situated organizations, both taxable and tax-exempt, for functionally comparable positions. “Similarly situated” organizations are those of a similar size, purpose, and with similar resources;
- The availability of similar services in the geographic area of this organization;
- Current compensation surveys compiled by independent firms;
- Actual written offers from similar institutions competing for the services of the person who is the subject of the compensation arrangement. As allowed by IRS Regulation 4958-6, if this organization has average annual gross receipts (including contributions) for its three prior tax years of less than $1 million, the Board or compensation committee will have obtained and relied upon appropriate data as to comparability if it obtains and relies upon data on compensation paid by three comparable organizations in the same or similar communities for similar services.
- The terms of compensation and the basis for approving them shall be recorded in written minutes of the meeting of the Board or compensation committee that approved the compensation. Such documentation shall include:
- The terms of the compensation arrangement and the date it was approved;
- The members of the Board or compensation committee who were present during debate on the transaction, those who voted on it, and the votes cast by each Board or committee member;
- The comparability data obtained and relied upon and how the data was obtained.
- If the Board or compensation committee determines that reasonable compensation for a specific position in this organization or for providing services under any other compensation arrangement with this organization is higher or lower than the range of comparability data obtained, the Board or committee shall record in the minutes of the meeting the basis for its determination;
- If the Board or committee makes adjustments to comparability data due to geographic area or other specific conditions, these adjustments and the reasons for them shall be recorded in the minutes of the Board or committee meeting;
- Any actions taken with respect to determining if a Board or committee member had a conflict of interest with respect to the compensation arrangement, and if so, actions taken to make sure the member with the conflict of interest did not affect or participate in the approval of the transaction (for example, a notation in the records that after a finding of conflict of interest by a member, the member with the conflict of interest was asked to, and did, leave the meeting prior to a discussion of the compensation arrangement and a taking of the votes to approve the arrangement);
- The minutes of Board or committee meetings at which compensation arrangements are approved must be prepared before the later of the date of the next Board or committee meeting or 60 days after the final actions of the Board or committee are taken with respect to the approval of the compensation arrangements. The minutes must be reviewed and approved by the Board and committee as reasonable, accurate, and complete within a reasonable period thereafter, normally prior to or at the next Board or committee meeting following final action on the arrangement by the Board or committee.
Section 6. Annual Statements
Each Director, principal Officer, and member of a committee with governing Board delegated powers shall annually sign a statement which affirms such person:
- Has received a copy of the conflicts of interest policy;
- Has read and understands the policy;
- Has agreed to comply with the policy; and
- Understands the corporation is charitable and in order to maintain its federal tax exemption it must engage primarily in activities which accomplish one or more of its tax-exempt purposes.
Section 7. Periodic Reviews
To ensure the corporation operates in a manner consistent with charitable purposes and does not engage in activities that could jeopardize its tax-exempt status, periodic reviews shall be conducted. The periodic reviews shall, at a minimum, include the following subjects:
- Whether compensation arrangements and benefits are reasonable, based on competent survey information, and the result of arm’s-length bargaining.
- Whether partnerships, joint ventures, and arrangements with management organizations conform to the corporation’s written policies, are properly recorded, reflect reasonable investment or payments for goods and services, further charitable purposes, and do not result in inurement, impermissible private benefit, or in an excess benefit transaction.
Section 8. Use of Outside Experts
When conducting the periodic reviews as provided for in Section 7, the corporation may, but need not, use outside advisors. If outside experts are used, their use shall not relieve the governing Board of its responsibility for ensuring periodic reviews are conducted.
Article 10 - AMENDMENT OF BYLAWS
Section 1. Power to Amend
Subject to the power of the members, if any, of this corporation to adopt, amend, or repeal the bylaws of this corporation and except as may otherwise be specified under provisions of law, these bylaws, or any of them, may be altered, amended, or repealed, and new bylaws adopted by approval of the Board of Directors.
Article 11 - CONSTRUCTION AND TERMS
If there is any conflict between the provisions of these bylaws and the articles of incorporation of this corporation, the provisions of the articles of incorporation shall govern.
Should any of the provisions or portions of these bylaws be held unenforceable or invalid for any reason, the remaining provisions and portions of these bylaws shall be unaffected by such holding.
All references in these bylaws to the articles of incorporation shall be to the articles of incorporation, articles of organization, certificate of incorporation, organizational charter, corporate charter, or other founding document of this corporation filed with an office of this state and used to establish the legal existence of this corporation.
All references in these bylaws to a section or sections of the Internal Revenue Code shall be to such sections of the Internal Revenue Code of 1986 as amended from time to time, or to corresponding provisions of any future federal tax code.