Background
The MWSA board decided at the Sep. 26, 2024 Board Meeting that we needed to have a legal review of our bylaws. We sent out an eBlast earlier this year asking for a volunteer legal reviewer and had no takers. We previously voted that if we did not get a volunteer, we needed to pay for this kind of review. For historical reference, the last legal review we had of our bylaws was by a volunteer member lawyer in 2017.
During this review, we need to get a legal call as to whether our donations ARE, in fact, tax-deductible since we are ramping up our call for donations. Actually, what I said was that the tax-deductibility of any donation is determined by the specific tax situation of the person seeking the deduction, and that determination should be made by each person’s tax attorney. See Tax Deduction Section below.
We need an action officer to take on this task of pricing what this kind of review should cost and locating a firm or qualified individual to conduct this review.
Tax Deduction
You’re absolutely right to be cautious here. The IRS and state regulators are very particular about how nonprofits describe the tax-deductibility of contributions. The safest approach is to inform, not promise.
Best Practice Language
Here are some IRS-aligned ways nonprofits typically phrase it:
“The Military Writers Society of America is a 501(c)(3) tax-exempt organization. Contributions are tax-deductible to the extent permitted by law.”
“Your gift may be tax-deductible as allowed by law. Please consult your tax advisor regarding the deductibility of your contribution.”
“MWSA is recognized as a nonprofit organization under Section 501(c)(3) of the Internal Revenue Code. Donations are generally tax-deductible; however, you should consult your tax professional to determine the extent of deductibility in your situation.”
Why This Matters
Donor circumstances vary: If a donor doesn’t itemize deductions, or if part of a gift is exchanged for benefits (e.g., meals, books, tickets), not all of it may be deductible.
IRS disclosure requirement: For donations of more than $75 where the donor receives goods/services in return (“quid pro quo”), nonprofits must tell the donor how much is deductible.
Risk reduction: Saying “may be deductible” or “to the extent allowed by law” avoids overpromising and shifts the responsibility to the donor and their tax preparer.
Suggested Standard Disclaimer for MWSA
“The Military Writers Society of America (MWSA) is a nonprofit, tax-exempt charitable organization under Section 501(c)(3) of the Internal Revenue Code. Donations to MWSA are tax-deductible to the extent permitted by law. Please retain this receipt and consult your tax advisor regarding your specific tax situation.”
AI’s Evaluation of our Bylaws
Here’s a structured evaluation of the bylaws you provided for Pennsylvania non-profit compliance and a comparison with standard nonprofit bylaws practices. I’ll break this into three parts:
1. Pennsylvania Nonprofit Corporation Act (NPCL) Requirements
Pennsylvania regulates nonprofits under the Nonprofit Corporation Law of 1988 (15 Pa. C.S. § 5101 et seq.). Your bylaws largely conform, but a few key areas may need adjustment or clarification:
✅ Strengths / Compliant Elements
Name and Purpose (Article I & II): Clearly states nonprofit status, Pennsylvania incorporation, and 501(c)(3) compliance. ✔ Required.
Membership Structure (Article III): Voting and non-voting classes are permitted under PA law (15 Pa.C.S. § 5752). ✔
Board Composition (Article IV): Fixed number of directors (nine voting) is acceptable; law allows flexibility but requires minimum of 3 directors. ✔
Officers (Article IV): President, VP, Treasurer, Secretary – all required roles are present. ✔
Committees (Article V): Allowed under § 5728. ✔
Amendments (Article VII, Sec 2): Allows amendment by Board, which is valid unless Articles of Incorporation specify otherwise. ✔
Dissolution Clause (Article VII, Sec 5): Correct 501(c)(3) language, required by IRS and Pennsylvania AG. ✔
⚠ Potential Issues / Missing Provisions
Member Voting Rights (Article III & VII):
You provide for members to elect directors and officers, but Article VII, Section 2 (Amendments) says only the Board can amend bylaws.
Under PA law (§ 5913, § 5504), unless Articles reserve power exclusively to the Board, members also have statutory rights to amend. You should clarify whether members are expressly excluded from amending bylaws.
Notice of Member Meetings (Article III, Sec 7):
You require 30–90 days’ notice. PA law (§ 5702) requires no less than 5 days unless bylaws say more. Your 30–90 is acceptable but restrictive; you may wish to allow more flexibility.
Quorum (Article III, Sec 7 & IV, Sec 4):
For members: 25 members = quorum. PA law defaults to 10% of members entitled to vote (§ 5703) unless bylaws specify otherwise. If you have large membership, 25 might be legally too low. Consider defining quorum as “10% or 25 members, whichever is greater.”
Board Removal of Directors (Article IV, Sec 9):
PA law (§ 5726) allows removal of directors with or without cause by members, and removal by Board only if provided in bylaws. You do allow Board removal “for cause” by 2/3 vote, but should also clarify member power to remove directors, since that is a statutory right unless waived.
Conflict of Interest Policy (Article VI & VII):
You include a Conflict of Interest policy requirement, but PA law (and IRS best practices) generally requires annual disclosure forms. Consider specifying that disclosures must be filed annually and kept in records.
Electronic Meetings / Voting:
You allow telephonic/online meetings but do not specify electronic voting for members or directors. PA law permits it (§ 5708, § 5726), but bylaws should clarify validity of email/online votes.
Indemnification Clause:
Missing. PA law (§ 5741–5749) allows corporations to indemnify directors/officers against liability. Most nonprofits include indemnification language to protect board members.
2. Comparison with Typical Nonprofit Bylaws
When compared with standard nonprofit practice (IRS guidance, BoardSource templates, other 501(c)(3) bylaws):
Missing / Recommended Additions
Whistleblower Policy Reference: Many nonprofits adopt this alongside Conflict of Interest and Ethics.
Board Term Limits: You provide 2-year terms but no maximum terms. Many nonprofits limit service to two or three consecutive terms to prevent stagnation.
Indemnification: As noted, strongly recommended for liability protection.
Membership Rights Clarification: Define if members have rights beyond voting for directors/officers (e.g., amendment rights, approval of dissolution). Current draft implies limited role but not fully explicit.
Annual Report Requirement: Standard to require the Treasurer/Board to present an annual financial report to membership.
Non-Discrimination Clause: Many bylaws now include language affirming nondiscrimination in membership and programming (race, religion, gender, etc.).
Electronic Communications Clause: Clarify that notice, ballots, and official communications may be sent electronically (consistent with state law).
Filling Vacancies: You allow Board appointment, but best practice is to specify whether appointees serve the remainder of the term or until the next election (yours says remainder – which is fine).
3. Suggested Revisions for Compliance & Best Practice
Here’s a summary of what I recommend adding/clarifying:
Clarify amendment powers:
Specify whether bylaws can be amended only by the Board or if members also have rights.
Suggested language:
“These bylaws may be amended by a two-thirds vote of the Board of Directors, unless the Articles of Incorporation or applicable law require approval by the members.”
Quorum adjustment:
Change member quorum to:
“Ten percent (10%) of voting members or twenty-five (25) members, whichever is greater.”
Removal of Directors:
Add:
“Directors may also be removed by the voting members as provided under Pennsylvania Nonprofit Corporation Law.”
Add Indemnification Clause:
Example:
“The Corporation shall indemnify any person who is or was a director, officer, employee, or agent of the Corporation to the fullest extent permitted by Pennsylvania law.”
Add Non-Discrimination Clause:
Example:
“The Society shall not discriminate on the basis of race, color, religion, sex, sexual orientation, gender identity, age, disability, or national origin in any of its activities or operations.”
Annual Conflict of Interest Disclosure:
Add:
“Each director, officer, and committee member shall annually sign a disclosure statement affirming compliance with the Conflict of Interest policy.”
Whistleblower Protection:
Add:
“No officer, director, or member who in good faith reports suspected misconduct shall suffer retaliation.”
Electronic Voting:
Add:
“Voting by electronic means (including email or secure online platforms) shall be permitted for both members and directors, provided measures are in place to verify identity and intent.”
✅ Bottom Line:
Your bylaws are already strong and IRS-compliant, but to be fully aligned with Pennsylvania NPCL and best nonprofit governance practice, you should (a) clarify amendment/member rights, (b) adjust quorum language, (c) add indemnification, whistleblower, and nondiscrimination clauses, and (d) strengthen your Conflict of Interest and electronic meeting policies.