Don’t be afraid of the constitution, it is up to each not-for-profit organisation to interpret their constitution as best they can and implement accordingly.
- Do you know where a copy of your constitution is?
- Have you read your organisation’s constitution?
- Has your organisation’s details been inserted into the ‘Model Rules’ template?
- Have you reviewed your constitution in the past five years?
- Is your constitution implemented in every way?
If you answered “YES” to all of the above… CONGRATULATIONS! Your organisation is operating within the law.
If you answered “NO” to any of the above… Don’t fear! You are not the only one; but we have some work to do.
Reviewing your constitution
Have you reviewed your constitution in the past five years? No? Well, we think it is time you do!
Follow the steps below:
- Read and review. All committee members to take notes on what they don’t understand or what is not done;
- Have a meeting to discuss. An external facilitator is beneficial to achieve effective outcomes;
- Develop a platform of agreement. List all the items that everyone agrees on and area that may need further investigation or clarification;
- Take it to the members. Hold an interactive meeting where members can have their say on the constitution;
- Ensure that any changes are within the legislation. If unsure, obtain legal advice;
- Pass a special resolution at a general meeting to make constitution changes;
- Lodge the changes. Complete the ‘Application to Register an Amendment of Rules’ with the Office of Fair Trading;
- Implement the changes. Update members with the new details and keep electronic and hard copy files of the new constitution.
Suggested areas of review
Many organisations are not properly implementing sections within their constitutions. Here are some suggestions on areas that are a good starting point.
- The structure of the organisation;
- The name of the organisation;
- The Objects of Association. These are often outdated;
- The types of membership and right of members. Including voting rights;
- The process of applying for membership;
- Signatories. With new technology most not-for-profits are wanting to make online payments. Talk to the bank and review the constitution to ensure the not-for-profits is able to do this;
- Association Seal. Most non-for-profits no longer use an Association Seal, see if your organisation should.
Are your minutes in order?
Here is a big one! Your organisation MUST record minutes at all meetings. It is the responsibility of the Secretary to provide a clear and accurate proceeding of the meeting. Minutes should include:
- Details of the day, date, location of the meeting and start time;
- The names of those present and details of apologies received;
- That the Chairperson announced a quorum was present and that the meeting was duly constituted;
- A reference to minutes of the previous meeting and the signing of them as a correct record;
- Details of every resolution put to members and whether it was passed with the required majority;
- Details of members voting against a motion or abstaining from voting, if those members requested that this be recorded;
- Details of any appointments made, members elected to office and any leave of absence granted to a member;
- Overview of discussions concerning decisions made at the meeting;
- The date and time for the next meeting;
- The time that the meeting closed.
Having constitutions in order tends to be one of the main issues not-for-profits face. NFP House offers governance training so your volunteers are up-to-date on the correct procedures.
NFP House provides information and advisory services to not-for-profit (NFP) organisations. Any advice, information or data provided by NFP House does not constitute financial or legal recommendations and should not be relied upon for business decisions. Ownership of any decisions remains exclusively with the NFP organisation being assisted and should be made at their discretion, in consideration of all possible risk factors. NFP House shall not be liable or held liable for any consequence of decisions or actions made by NFP organisations being assisted.