I belong to a non profit organization that owns and manages a clubhouse. The way we are set up is that we elect a board of directors each year that handles the day to day activities of the club. The bi laws are very explicit in describing the the duties and powers of the board. All authority comes from the members.
Besides the Board of directors we have 2 additional boards, a board of trustees and a foundation. The foundation manages all excess funds in a bank account set aside to insure the existence of the club should they loose thier lease or decide to buy a new building, this account has about $140,000 presently. The trustee account is not too hold more than one months expenses for the club plus 10%. Anything over that goes to the foundation. The board of directors account is set up only to manage the day to day activities and pay the bills as they arrise anything over $2,000 at months end should be transferred to the trustees.
The present board of directors is refusing to transfer money to the foundation or the trustees because they say they don't like how the bi laws for these groups are written. They have no authority to make these decisions as the bi laws for all three organiztions are over 40 years old.
To make a long story short, they have taken over the club, cancelled the monthly membership meetings ignored all the bi laws and have turned it into thier own private club. How can the membership force them to obey the bi laws, at least within reason, some flexability has always been permitted.
As I understand it, enforcing bylaws is a lot like enforcing a contract. You start by saying “It says here that you have to do x.” If they refuse to do it, you have to file suit in court, where you can seek to have a judge enforce whatever you need done. Perhaps the judge will remove the board members - then, you appoint new ones and government agencies, banks, etc. have to recognize the new board as authorized. Perhaps the judge will put an injunction on certain activities, order a judgment that funds be paid to the foundation, etc.
It’s even possible for board members to incur personal liability if they have failed to manage the group in accordance with the bylaws. This is especially true if bylaws dictated that money be used for x, but the director used it for y instead.
Ultimately, you’ll need to talk to an attorney about the specific procedures and grounds for filing suit.
If the board is violating the bylaws, they can probably be sued by a group that has standing - the dissenting members, or the trustees. (I’ll go for trustees because they can probably use the fund for legal issues).
If they are a nonprofit and retaining earnings, that may also become an issue with the IRS.
Of course, as the board, they may change their bylaws - unless those have to be changed at a properly constituted full membership meeting. If the bylaws require a monthly membership meeting that allows motions from the floor, no wonder they don’t want one.
The by laws can only be changed by a voting quorum of members. One of the problems we have with this club is very low participation from the members at meetings. A quorum is only 15 members including the 6 on the board of directors. This makes it easy for the board to only notify the group they are in tight with to vote the way they want. This would be ok if the meeting dates and issues to be discussed were posted 2 weeks prior to the meeting as commanded by the by laws.
The violations I see as far as spending are relatively minor and would normaly pass without too much question. The biggest complaint I and others have are the policy changes which have played a large part in dropping membership and changing the over all demeanor of the club atmosphere.
In the past if a member passed away we would hold a memorial in the hall at no charge. Now they are charging members for the hall at the same rate they would charge a stranger.
They will on a few occassions a year rent out the hall to a private group cancelling regularly scheduled events the members have for that same time slot.
Holidays such as Christmas, New Years and Thanskgiving memebers were always encouraged to bring food any time of the day and a buffet would run continuous throughout the weekends. All buffets were cancelled except the food the club supplies at a fee. These were very important bonding events where members would renew frienships and tended to kick a little vitality into the membership.
One time 30 day guest passes have been eliminated and the board approves or denies membership without approval from members.
Just a long laundry list of things like this, if we put a note on the board trying to allert members to demand a membership meeting the notes are removed.
The board may be responsible to seeing that the funds are used in a manner compatible with non-profit regulations, and if they see a problem they are entitled to withold the funds. They can resign or you can get rid of them somehow, but I wouldn’t sign a check under those circumstances if I thought there was a problem. Maybe there isn’t a problem and they are just being jerks for some reason, but you’ll have to deal with that within your organization or go to court.
HoneyBadgerDC, all of the issues in your second post sound like things the board is authorized to do. As unpleasant or self-destructive as they might be, I’d be surprised if the bylaws were specific about holiday parties and the like. For things the board is authorized to do, all you can do is try to persuade them to change their minds, or persuade the members to show up and elect new board members.
Having dealt with a frustrating Homeowner’s Association board myself, I know just how hard it can be to get anything productive done when the board has gone tilt and the members are apathetic.
You’d get more traction on the issue of distributing funds to the trustee/foundation. If the bylaws really do mandate that funds be transferred according to certain formulas, the board has no authority to do something different.
Your profile says you’re in California … Meeting notice requirements are written into the California Corporation Code. A meeting held without proper notice to all members, not just the board’s cronies, is not a legal meeting, and any actions taken at such a meeting are not valid.
I think just showing them this statute may be enough to bring them back into line. I am certain a letter from the attorney general would. This has happened several times over the past 30 years or so but most have not been as stubborn as this group.