Membership

What is a "Membership Nonprofit”?

Some nonprofits are structured from the moment they are incorporated as “membership corporations.” When a nonprofit is a membership corporation, its articles of incorporation and bylaws define the members, as well as the members’ rights (such as the right to vote to elect board members, or amend the bylaws).

• Any nonprofit, even those that are not legally constituted as membership corporations, can decide to give a group of stakeholders the title of “members.” Typically that occurs when a nonprofit wants to give certain benefits to those who support the organization financially and/or attend its events and activities. Such “members” normally do not have voting rights, but they may receive certain other benefits and rights that the nonprofit decides to grant them as “members” of the organization (such as special newsletters or ticket discounts).
• To determine whether a nonprofit corporation is legally constituted as a membership corporation, you must review the articles of incorporation (also called the “certificate of incorporation” in some states) and/or bylaws. Look for any description of “members” (other than board members) to determine what the members’ powers/rights are.

What Other Types of Nonprofits Exist?

Other nonprofits incorporate as organizations without formal “members.” In these organizations, the board of directors holds all responsibilities, including voting to elect their replacements on the board (which is sometimes called a “self-perpetuating” board).

In self-perpetuating boards, existing board members nominate and elect incoming board members, in accordance with the organization’s bylaws. Learn more about the practical and legal distinctions between nonprofits with members who elect the board and those that do not, in this article from the CharityLawyer Blog.

Should Your Nonprofit be a Membership Organization?

Deciding whether to structure a nonprofit as a membership corporation is a critical decision that is most often made in the early stages of forming a nonprofit corporation. (See the National Council’s resource, "How to Start a Nonprofit” for more background on starting a nonprofit corporation.) There are both pros and cons to structuring a nonprofit as a membership corporation. Here are some factors to consider in making the decision:

• An organization accountable to a defined group of members may be perceived by those in and out of the organization as more committed to acting on behalf of, or representing, its members.
• If the organization’s governing documents give the members the right to take formal actions, such as electing people to the board or amending bylaws, then a special notice must be sent out to all members and a quorum of members must be present to both convene meetings and take action. Thus, for organizations with hundreds of members or geographically dispersed members, achieving a quorum for meetings can be a challenge.

Resources

• Read the BoardSource FAQ on “What is a Formal Membership Organization?”.
• Are membership dues deductible?
• Read the Center on Philanthropy at Indiana University’s study (2005), Indiana Nonprofits: A Profile of Membership Organizations, that offers interesting observations about the roles membership organizations play in communities.
• Use social media to strengthen your membership organization  8 Steps for Building Community on Twitter: Tips for Membership Organizations.
• Read about databases for membership organizations from Idealware.
• Gather ideas for how to strengthen your membership program by reviewing how various State Associations of nonprofits describe their member benefits:
  • Arkansas Coalition for Excellence
  • Connecticut Association of Nonprofits
  • Delaware Association of Nonprofit Agencies
  • Maine Association of Nonprofits
  • Montana Nonprofit Association
  • Utah Nonprofits Association