Lori Pattison

Owners And Stakeholders – Part One

The source of this article is Governance: Council and Board, the original version of which was authored by former National Vice President Terry Wilson.

Have you ever considered the audiences you have as a Vincentian and especially as a Vincentian leader? Whether you are a Conference or Council President, a member of a Board of Directors, serve on a committee or are an active or associate member of a Conference there are a number of people to whom you are accountable, are your audience, or have a stake in what you do and how you do it.  We call these people “stakeholders.”

In for-profit companies the finances are mainly of interest to those who own the corporation or those interested in becoming owners.  Nonprofit corporations, however, have many “owners,” also known as stakeholders.  This week we’ll discuss five of these groups and next week an additional five.

• Members
• Those They Serve
• Donors
• Volunteers
• Employees

Let’s talk about these one at a time:

Members are stakeholders. In the Society of St. Vincent de Paul, most Vincentians consider their work to be a vocation. They believe in the mission and have invested heavily with their time, talent and resources to help achieve it.  More than that, it is often their very way of life.

The needs of those served make them stakeholders.  For example, our Society’s mission is carried out by supplying people in need with serv­ices and goods they require to live a decent life.  In many cases our help is the difference between the abject poverty of living on the street or the peace of having a place of their own in which to live.

Our Society’s work goes beyond food, shelter, clothes, furniture, etc.  When life circumstances such as illness, job loss or poor decisions fall heavily on a person or family, Vincentians can bring hope, share our spirituality and provide at least for basic needs.

Donors make our work possible. They want to be sure their dona­tions are used to achieve the greatest amount of benefits for the program to which they contributed.  Even though they know it is not possible, they would like every dollar they give to go directly to those in need.

Donors give of their time and money because they believe in what we do and how we do it. They want to find a way to give to the poor or make a difference in someone’s life.  Our Society and the way we oper­ate gives them confidence that their support will achieve their desires to help those in need.

Volunteers are closely aligned with any nonprofit, especially ours. They desire to contribute to those in need and to give back to the community for their own good fortune. They see the Society as a well-run organiza­tion that knows how to reach those in need and assist them.  It is not uncommon that a volunteer will eventually become a member.

Employees work for any corporation or business to provide for their own needs.  In our Society they become our partners in our mis­sion. More than that, they become believers in our work and who we are. We expect them to present themselves to those we serve and the public in the same way a member does. They are often so involved that you find it hard to separate them from our Vincentian members.

They are true stakeholders because they both support and foster the mission and because they need to earn a living.  Some may even be will­ing to continue to work for less than they can earn elsewhere.  The Soci­ety has a responsibility to pay a living wage and provide necessary benefits.  All members of the Society must ask:  How can we live out our mission to help others if our own employees are underpaid?

What Is Meant by “Hoarding” in a St. Vincent de Paul Context?

Within the documents of the Society of St. Vincent de Paul, there are found a number of instances where hoarding is prohibited. Please look at the Appendix to this document to see those specific references. Unfortunately, there is no specific place in the SVdP documents where the word hoarding is actually defined. There have been many times over the years that the National Office has been called to give a definition so our members can have a better understanding of the prohibition. The explanation was given a number of times in the Q&A section of the National Council’s Frederic’s e-Gazette. However, it has been deemed appropriate by the National Governance Committee to give a formal definition.

Webster’s New Collegiate Dictionary defines hoarding as “to collect and lay-up, amass and conceal.” The considerations related to hoarding within the Society of St. Vincent de Paul, however, are slightly different when looking at this from a Conference perspective and a Council perspective. We have treated each separately.

Conference Considerations

A. TYPES OF FUNDING HELD BY CONFERENCES

The first consideration before answering the question “What is Hoarding” is to understand the different types of funds that Conferences may hold.

1. General Donations: These funds are received from the parishes, members, benefactors, other SVdP entities, bequests made to a Conference that do not designate a specific purpose, other organizations, and fundraising efforts. There is no specific intent associated with these funds other than the assumption that the funds will be used for the purposes of the Society to better serve those in need. These funds should generally be held in the Conference checking account or other liquid financial accounts.
These funds are susceptible to hoarding.

2. Donor-designated Funds: These funds are received from a donor (individual or organization) that identifies a specific purpose for the use of those funds. For example, an individual gives a check to a Conference and on the line preceded by the word “for” the donor has specified “utility payments.” Another example is a check from a donor that is accompanied by a note or letter that designates the donation for a particular purpose. If a Conference accepts the check, it accepts the responsibility to track those funds and only use those funds for utility payments. A Conference has a legal obligation to ensure the funds are not used for any other purpose.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.

3. Funds from Grants: These funds, for the most part, are similar to Donor-designated Funds. They are usually given for a specific purpose and that purpose must be honored.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.
However, sometimes, but rarely, grant funds are issued for general use by a Conference. In this case the funds are treated the same as general donations.
These funds are susceptible to hoarding.

4. Capital Campaigns/Endowments/Disaster Relief: Capital campaigns are normally established to purchase land, buildings, special equipment, or fund special programs. Endowments may be established to provide special programs or services with ongoing income. Disaster relief funds are normally established to provide relief to people suffering from a recent disaster in the area. The key thing about these funds is that donors contribute to them for their specific purpose. These funds are collected for a specific purpose and can only be used for that purpose. These are treated the same as Donor-designated Funds.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.

5. Interest Earned: Sometimes Conferences place their funds in financial instruments that gain interest.
a. If the donor requires it, the interest earned on his/her donation must be used for the purpose of the fund for which it was originally designated.
b. Otherwise, if the allocation of interest creates an unnecessary burden there is no legal requirement for the interest to be restricted for any purpose and may be used as the Conference determines. It may create an unnecessary burden to try to allocate the interest to specific funds.
All interest that is for general use is susceptible to hoarding. All interest designated and used for a specific purpose is not susceptible to hoarding.

6. Conference-designated Funds: There are times when the Conference takes a certain amount out of the general fund and sets it aside for a particular purpose. Those funds will remain in the designated area until the Conference decides to use them for another purpose. These Conference-designated funds may be changed from one purpose to another as often as the Conference decides. An example of this is a Conference budget which designates a specific amount of funds to be spent on maintenance of equipment. The budget designations may be realigned at any time by the Conference. These funds, if originated in the general fund, are susceptible to hoarding.

7. Conference Reserve Accounts: A consideration for Conference reserve accounts must be included with the above. There is only one mention in the Manual related to reserves for Conferences and it does not use the word “reserves.” Donations to Conferences — whether they come from church collections, from the members themselves, from benefactors or from fundraising efforts — are meant to address today’s needs. It is wrong for a Conference to seek financial security by building up a large balance for the needs of the future. Conference balances should not exceed what they expect to spend during an average quarter. Surplus funds should be shared generously with more needy Conferences or the Special Works of the District Council.
It addresses the fact that donations are “meant to address today’s needs” and that “surplus funds should be shared generously.” This applies to most Conferences. So, unless a Conference has some fixed expenses, there is no need for a reserve account. The “balance for the future” and/or the reserve account, if originated in the general fund, are susceptible to hoarding.

8. Special Works Reserve Accounts: Stores and other Special Works that may be operated by a Conference may legitimately have fixed expenses. Although the Manual attributes Stores and Special Works to Councils, the recommendation is to maintain a balance for the future of up to six months of expenses. This balance for the future or Special Works reserve account should be maintained at such a reasonable and necessary level as the Conference or the Board of Directors determines is needed to assure the financial stability of the Special Work. Surplus funds should be shared generously with more needy Conferences or Special Works of the Councils. The “balance for the future” and/or the Special Works reserve account may be susceptible to hoarding.

So, it boils down to two types of funds that are held by the Conference: those that are susceptible to hoarding and those that are not. Those funds that are designated for a particular purpose by the donor must be honored (by law) for that purpose. Our concern in this document is to define hoarding, so let us recap which funds of a Conference are susceptible to hoarding:
1. All funds held for general use, typically these are in the checking account, but they may be in other financial instruments.
2. Grant funds that are designated for general use.
3. Interest earned on funds designated for general use; and
4. Conference-designated Funds.

B. REFLECTIONS ON HOARDING RELATED TO CONFERENCES

Members must accept the fact that our donors have given the Conference resources to use to help those in need. The reality is that the funds we have belong to the suffering, the deprived, the forgotten, the poor and those in need. We are stewards of these resources and are accountable for how they are used. There are two primary considerations about the funds our Conferences receive:

• Are the funds we received designated by the donors for a particular purpose? If so, then it is our obligation both legally and morally as stewards of those resources to ensure they are used for the purposes for which they were given.
• Where there is no specific donor designation, then the funds are to be used to relieve the needs of those who come to us for help (with a reasonable amount dedicated to Society approved Conference expenses).

Hoarding occurs when a Conference decides to keep funds in its financial instrument
rather than helping an individual or family that it is capable of helping.

The fact is that once the Conference decides that the request is legitimate and it has the resources to fulfill the request, then deciding to keep the money in the bank is the wrong decision and constitutes hoarding.

As Vincentians, we are asked to love those in need in the best way we can. The only way to do that is to treat each case on its own merit. While establishing general guidelines for assistance has some benefit, Vincentians are called upon to assess each home visit as a unique encounter and should not set predefined limitations on the amount of help to be given or the type of help to be given or the number of times to help someone. To love someone in the best way possible is the keep all of our resources available for our Lord’s use. All of our resources include our hearts, our time, our funds and other things we use to help people.

C. STEPS TO BE TAKEN WHERE A CONFERENCE HAS ACCUMULATED EXCESS FUNDS

Conferences are encouraged to seriously read the Manual, Section 2.1 Conference, Funds of the Conference: “It is wrong for a Conference to seek financial security by building up a large balance for the needs of the future. Conference balances generally should not exceed what they expect to spend during an average quarter. Surplus funds should be shared generously with more needy Conferences or the Special Works of the District Council.”

A review of fund balances should occur towards the end of each fiscal year with Conference members entering into a discussion and consideration of “twinning” to more needy Conferences within their District and/or Council, to SVdP National programs providing direct assistance, to Disaster Services Corporation, or to some SVdP International Conferences.

Council Considerations

A. TYPES OF FUNDING HELD BY COUNCILS

The first thing to keep in mind is that Councils do not do direct assistance. The primary purpose of the Council is to support the work of the Conferences. On the Council annual report, there is no designation for direct assistance. So, typically, the funds raised by the Council are for something other than direct assistance. The primary concern for hoarding is the decision to bank funds rather than give assistance to those in need.

Not all Councils have Special Works that provide direct assistance. Usually when they do, they have designated fundraising to support those Special Works. If a Council receives donations intended for direct assistance and they have no Special Works, then they should be distributing those funds in one fashion or another to the Conferences; if they do not, then that is hoarding.

The next consideration before answering the question “What is Hoarding?” is to understand the different types of funds that Councils may hold.

1. General Donations: These funds are received from the Conferences, the public, other SVdP entities, general fundraising efforts of the Council, benefactors, general bequests, memorials, and organizations. There is no specific intent associated with these funds other than the assumption that the funds will be used for the purposes of the Society to support the work of the Conferences and better serve those in need. These funds are held in checking accounts, savings accounts, money market accounts, CDs, and other financial instruments that are essentially considered to be liquid (easily accessible). A few comments must be made related to the fundraising efforts by Councils. Special care must be given to the way fundraising appeals are made. Sometimes, a Council will create an appeal that looks to the donor as if the donation will be used for direct assistance to those in need when the actual intent of the Council was for the funds collected to be used for other purposes. If the implication from the appeal is different from the actual intent of the Council, then the appeal must be clarified.
These funds can be susceptible to hoarding.

2. Donor-designated Funds: These funds are received from a donor (individual or organization) that identifies a specific purpose for the use of those funds. For example, an individual gives a check to a Council and on the line preceded by the word “for” the donor has specified “utility payments.” Another example is a check from a donor that is accompanied by a note or letter that designates the donation for a particular purpose. If the Council accepts the check, it accepts the responsibility to track those funds and only use those funds for utility payments. The funds cannot be used for any other purpose. In this case, if the Council has a Special Work that provides utility payments for those in need, then the Council must use the funds in that Special Work. If it does not, the funds can also be distributed to the Conferences to help make utility payments. Another example would be a Council receiving a check from ABC Organization for $10,000 to be used for rental assistance. If the check is accepted, the Council must hold those funds in reserve and only use those funds for rental assistance. The Council would do so in a similar way to that described for utility payments. The Council can also distribute the funds to the Conferences and the Conferences have a legal obligation to ensure the funds are not used for any other purpose.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.

3. Funds from Grants: These funds, for the most part, are similar to Donor-designated Funds. They are usually given for a specific purpose and that purpose must be honored.
These funds must be used for the purpose given and are not susceptible to hoarding.
However, sometimes, but rarely, grant funds are issued for general use by the Council. In this case the funds are treated the same as general donations.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.

4. Capital Campaigns/Endowments/Disaster Relief: Capital campaigns are normally established to purchase land, buildings, special equipment, or fund special programs. Endowments may be established to provide special programs or services with ongoing income. Disaster relief funds are normally established to provide relief to people suffering from a recent disaster in the area. The key thing about these funds is that donors contribute to them for their specific purpose. These funds are collected for a specific purpose and can only be used for that purpose. These are treated the same as Donor-designated Funds.
These funds must be used for the purpose given. When not used for the purpose intended, these funds may also be considered as hoarding.

5. Interest Earned/Investment Income: If funds are placed in financial instruments that gain interest or in an investment account that generates income, there are two options available:
a. If the donor requires it, the interest earned/investment income on his/her donation must be used for the purpose of the fund for which it was originally designated.
b. Otherwise, if the allocation of interest creates an unnecessary burden there is no legal requirement for the interest earned/investment income to be restricted for any purpose and may be used as the Council determines. It may create an unnecessary burden to try to allocate the interest to specific funds.
All interest earned/investment income that is for general use is not susceptible to hoarding (see #1 – General Donations, under Council Considerations). All interest earned/investment income designated for direct assistance to those in need is susceptible to hoarding, if not used for the purpose intended.

6. Council-designated Funds: There are times when the Council takes a certain amount out of the general fund and sets it aside for a particular purpose. Those funds will remain in the designated area until the Council decides to use them for another purpose. These Council-designated funds may be changed from one purpose to another as often as the Council decides. An example of this is a Council budget, where funds are designated to be spent for a fundraising dinner. The budget designations may be realigned at any time by the Council.
These funds, having originated in the general fund, are not susceptible to hoarding.

7. Council Reserve Accounts: Councils sometimes have fixed expenses. For these, the Manual’s recommendation is to maintain a balance for the future of up to six months of expenses. Councils, like Conferences should not seek financial security by building up excessive balances for future needs. There may be needs for capital campaigns, endowments, and disaster relief, but those are addressed in number 4 above. So, unless a Council has some fixed expenses, there is no need for a reserve account. Surplus funds should be shared generously with needy Conferences or Special Works of other Councils. The “balance for the future” and/or the reserve account may be susceptible to hoarding.

8. Special Works Reserve Accounts: Stores and other Special Works that may be operated by a Council may legitimately have fixed expenses. The recommendation from the Manual is to maintain a balance for the future of up to six months of expenses. This balance for the future or reserve account should be maintained at such a reasonable and necessary level as the Council or the Board of Directors determines is needed to assure the financial stability of the Special Work. Surplus funds should be shared generously with more needy Conferences or Special Works of the Councils. There may be needs for capital campaigns and endowments but those are addressed in number 4 above. The “balance for the future” and/or the reserve account may be susceptible to hoarding.

So, it boils down to two types of funds that are held by the Council: those that are susceptible to hoarding and those that are not. Those funds that are designated for a particular purpose must be honored (by law) for that purpose. Our concern in this document is to define hoarding, so let us recap which funds are susceptible to hoarding:
1. All funds designated for direct assistance to those in need (normally in Special Works);
2. Grant funds designated for general use for direct assistance to those in need;
3. Council Funds designated for direct assistance to those in need.

B. REFLECTIONS ON HOARDING RELATED TO COUNCILS

Regardless of the source of its income, a Council needs to start by asking if and why it is amassing funds. The following are guidelines and principles that should govern the use and accumulation of funds by Councils:
• If the Council operates a Special Work, then it should consider having a reserve to operate that Special Work based on the expenses normally incurred over a period of time designated by the Council Board.
• If the Council has employees or fixed expenses such as rent and utilities, then it should consider having a reserve to cover the expenses normally incurred over a period of time designated by the Council Board.
• The Council should, as part of its annual budgeting process, set aside funds to share with those Conferences that have inadequate funds to meet the needs which they face to help people in need.

Hoarding occurs when a Council decides to keep funds in its financial instrument
instead of using the funds as they were originally defined
or to advance the purposes of the Society.

The fact is that once the Council in its Special Works decides that the request for direct assistance is legitimate and it has the resources to fulfill the request, then deciding to keep the money in the bank is the wrong decision.

There are Councils that do not have Special Works who use their funds to support the Conferences: training materials, running Ozanam Orientations or other workshops, holding days of recollection for spiritual growth, sending members to regional and national meetings, etc. This spending fulfills the purpose of the Council and is not susceptible to hoarding unless the Council simply sits on the money.

It is wrong for a Council to decide to NOT use funds for the purpose for which they were donated. There are certain circumstances that may occur that would prevent a Council from using funds accumulated for a specific purpose. An example of this is the case of a Council collecting funds for a particular disaster in its area. If, after a period of time, funds are no longer needed to address the effects of the disaster, but the Council still has funds on hand, there are three ways to resolve the unused designated funds:
1. The remaining funds may be returned to donors;
2. The donors may be contacted to redesignate the use of those funds; or
3. If it is not practical to contact donors, State laws vary and local legal counsel should be sought before taking action; but generally, UPMIFA (Uniform Prudent Management of Institutional Funds Act) requires the nonprofit to provide written notice to the Attorney General of the State and wait 60-90 days, and then only if the restriction is deemed:
a. Unlawful, impractical, impossible to achieve, wasteful,
b. The amount is less than the amount defined by the State,
c. The fund is more than 20 years old, and
d. The charity uses the fund in a way that is consistent with the charitable purpose of the donor restriction.
Other releases of restrictions will require a Court Petition.

C. STEPS TO BE TAKEN WHERE A COUNCIL HAS ACCUMULATED EXCESS FUNDS

Here are some examples of things Councils may do if they have accumulated excess funds:
• The council should set aside funds to share with those Conferences that have inadequate funds to meet the needs which they face to help people in need.
• A Council can reflect and discern on whether they ought to direct additional funding, towards achieving various goals set forth in “Standards of Excellence Questions for Diocesan Councils.”
• If a council has additional funds, then it should look for ways to help the Society and its members through the Disaster Services Corporation, international twinning, domestic twinning with Councils in need of financial help.
• Reviewing its programs and considering the need for starting new non-income producing Special Works such as through an evening or lunch meal program, a Coming Together to Getting Ahead program, or the like.

Appendix: Hoarding in SVdP Documents

In the Rule, Part I, Article 3.14:
Nevertheless, the Society uses money and property to help relieve the suffering of those in need. The Society’s funds must be handled with the utmost care, prudence, and generosity. Money must not be hoarded. Decisions regarding the use of money and property are to be made after reflection in the light of the Gospel and Vincentian principles. Accurate records must be kept of all money received or spent. The Society may not allot funds to other organisations, except occasionally for other branches of the Vincentian Family, save under exceptional circumstances.

In the Rule, Part III, Statute 24:
Councils and Conferences zealously manage and maintain the Society’s assets. The authority to manage the Society’s assets remains exclusively with Councils that may delegate this authority in accordance with the Rule of the Society and the Bylaws and Resolutions of the National Council.

Faithful to the spirit of non-accumulation of wealth, the next higher Council may determine annually the percentage of the funds of each Council or Conference within their area that may be made available to them. The next higher Council will work with the Council or Conference to determine an appropriate reserve for unanticipated events and direct the allocation of funds which exceed the anticipated demands, which may not be hoarded as a capital sum, to the service of the poor in their own area or abroad in the poorest areas of the world.

In Manual, under Council funds:
Sources of Council funds may include contributions from Conferences, donations, bequests, Special Works, and grants. Like Conferences, Councils act as custodians of funds given to the Society, understanding that they belong, ultimately, to the poor. While some Councils prefer not to accumulate funds, others make a point of setting something aside for exigencies. Operating an active Council with a reasonable bank balance is good business practice, not hoarding. A bank balance equal to the operational cost of the Council for six months may be reasonable. A balance of less than three months’ operational cost may be unhealthy. Councils with inadequate balances should review the budget for ways to increase their income or reduce their expenditures. Councils with overly large balances should find ways to expend their excess funds on behalf of the poor, such as subsidizing active Conferences in poorer areas or planning needed Special Works.

In Manual, under Funds of the Conference:
It is wrong for a Conference to seek financial security by building up a large balance for the needs of the future. Conference balances generally should not exceed what they expect to spend during an average quarter. Surplus funds should be shared generously with more needy Conferences or the Special Works of the District Council.

In Bylaws, Document 1 for Conferences Without a Board of Directors, Article 16:
Conferences and Councils zealously manage and maintain the Society’s assets. The authority to manage the Society’s assets remains exclusively with Councils that may delegate this authority in accordance with the Rule of the Society. Faithful to the spirit of non-accumulation of wealth the Upper Councils may determine annually the percentage of the funds of each Conference within their area that may be made available to them. The Upper Councils will work with the Conference to determine an appropriate reserve for unanticipated events and direct the allocation of funds which exceed the anticipated demands, which may not be hoarded as a capital sum, to the service of the poor in their own area or abroad in the poorest areas of the world.

In the Conference Audit Manual, under Bank Account:
Every Conference is required to maintain its bank account(s) separate from the parish and separate from the personal accounts of any of the members. There shall be no co-mingled funds. The funds of the Conference must be in standalone accounts not tied to the parish or any of the members. The only exception to this is when a Conference has an approved reserve account. To avoid any perception of hoarding, the reserve accounts should be approved by the next upper Council. The funds in the reserve may be combined into a shared investment account as long as the Conference has sole access to its funds.

In Resolution 114:
Be it resolved that legal issues which involve one Council, or one Conference have the potential for affecting the whole Society and therefore if not addressed will lead to the suspension and removal from the Society of the offending Vincentian, Conference or Council if not corrected in a timely fashion. Such legal issues include but are not limited to the following:
– Violation of any state statute, local ordinance, or federal law or any regulations adopted by any state, local government, or federal agency which violation relates to the operation of not-for-profit organizations.
– Failing to conduct an annual audit.
– Failing to file a Federal Form 990 or any required state form.
– Adopting Bylaws that have not been updated to comply with federal requirements
– Giving funds to non-Vincentian organizations or for non-Vincentian activity.
– Failing to submit required annual reports
– Failing to allow women or minorities as Conference members
– Maintaining large balances that do not constitute a legitimate reserve for future operations, and which constitute hoarding.
– Failing to enact Bylaws that are in compliance with those approved by the National Council.
– Failing to make home or similar visits in pairs – i.e., allowing only one Vincentian to make such visits.
– Having officers who are not active members of the Society.
– Limiting assistance to certain groups to the exclusion of others.
– Acting in an autonomous manner and as though not answerable to the Society.
– Changing Bylaws to permit activity contrary to the Rule of the Society.
– Removing members without complying with the Rule of the Society.
– Violating confidentiality of those being served.
– The failure of National Council Members to attend National meetings.
– Raising funds across Council boundaries without permission and without adequate disclosure to the public.
– Any other issues having legal implications.

The original Bylaws presentation was developed and presented by John Berry.

This article was written by Mike Syslo, Past Chair – National Governance Committee.

Society of St. Vincent de Paul BYLAWS:  What They Are and Why They Matter

 The Boring Stuff

 Bylaws are a nonprofit’s operating manual. Bylaws (or Bylaws and Articles of Organization) are the main governing document for a nonprofit organization. They are the main official documents of an organization, nonprofit or for-profit. One of the important things to remember about Bylaws is that the operations of your organization must be in line with what you say they are in the Bylaws and Articles.

The purpose of the Bylaws is to guide the nonprofit Board’s actions and decisions. They are helpful in preventing or resolving conflicts and disagreements. They can protect the organization from potential problems by clearly outlining rules on authority levels, rights and expectations.

If the Board of Directors fails to follow the Bylaws, it can be held liable for breaching its duty to the organization.  Breach of duty can cause a significant liability for the Board of Directors.  Breach of duty can also result in the organization losing its nonprofit, tax-exempt status. The loss of nonprofit status would mean a loss of tax deductibility for donors and the need for the organization to pay taxes on their income.

“Bylaws determine how an organization is structured.  For example, most Bylaws specify whether an organization has members, define the duties of officers and Board members, and identify standing Board committees. An important function of Bylaws (if this matter is not covered in the Articles) is to specify how Board members are selected.” (BoardSource)

 What About the Rule?

 All groups require rules for effective operation. Our Rule is drawn from the lives and experience of all Vincentians throughout the world. It describes the elements that are needed to maintain the unity of the Society.  There is no group or organization that exists without some set of rules.

In 1835, two years after its founding, the Society formulated its Rule, a series of Articles based upon the practical experiences of the first Vincentians. The Rule of the Society has continued as the guide and blueprint for the Society for the past 191 years. This, alone, is a tribute to its efficacy and to the Holy Spirit who inspired it.  The Rule has gone through a few modifications over those many years, but the essential spirit of the Society that is reflected in the Articles and Statutes is the same as in the first Rule.

 Bylaws and the Rule: The Relationship

 Bylaws are significant written rules by which an organization is governed. They determine how the Society of St. Vincent de Paul is structured and, along with state law, determine the rights of participants in the structure.

Membership in the National Council of the United States, Society of St. Vincent de Paul, Inc. requires that every organizational unit (Conference and Council) have Bylaws.  Prior to 2003, the Rule included both the philosophy of the Society and its structure and responsibilities.  Since 2003, philosophy has been in the Rule and the structure and responsibilities have been in the Bylaws.  Having the original format of the Rule split into two separate documents has caused the need for all Conferences and Councils to adopt a set of Bylaws and operate in accord with both Rule and Bylaws.

Conferences and Councils must maintain their Bylaws (including any and all amended Articles) in updated and amended form. The Conference or Council must keep a copy of their Bylaws together with the Rule document (The Manual 1.3).  In addition, the next higher Council should have a copy of the Bylaws.  For example, a District Council should have a copy of the Bylaws of each of its Conferences.  The Diocesan Council should have a copy of the Bylaws of each of its District Councils.

The Rule is the paramount authority of the Society of St. Vincent de Paul. Should any bylaw, rule or regulation adopted by a Conference or Council conflict with the Rule and statutes of the Society of St. Vincent de Paul as now promulgated or hereafter adopted by the Council General International or the National Council of the United States, such bylaw, rule or regulation shall be void and of no effect (The Manual 1.3).  This needs to be very clear in everybody’s mind.  You cannot put anything into the Bylaws that in any way conflicts with the Rule or Nationally Approved Bylaws.  If a conflict exists, the Bylaws will be rejected by the next higher Council and you may not proceed with them.

BUT – Bylaws have been created to be used by SVdP entities across the country and as such do not include language that may be required by your state and local law (see listing of multiple versions of Bylaws on page three).  It is strongly advised that legal advice be sought from a local attorney concerning matters such as the following:  non-discrimination policy language, tax-exemption requirements, and any other areas of the Bylaws in which modification of the language is necessary in order to be in alignment with applicable state and local law.  As of this date, we have not found anything of substance in the Nationally Approved Bylaws that conflict with state and local law.

Since the Bylaws have been developed to be in conformity with the Rule of the Society, Bylaws should be modified only to address alignment to state and local law (Bylaws Introduction, SVdP USA).

 Where Did Our Bylaws Come From?

 In 2003, the Council General International approved an updated version of the Rule of the Society.  Each separate Superior/National Council was invited to draft their own Part III of the Rule to define the items of the Rule that are unique to each country.  This new version of Part III of the Rule for the United States was different from the former Rule in that details of structure and governance were removed.  Those details were then placed in Bylaws which varied with each type of SVdP structure within the United States.  Placing the structure and governance concerns of the Society into a separate document has forced Conferences and Councils to adopt an appropriate set of Bylaws for their use.

The Bylaws documents were approved by the National Council Members at the Society of St. Vincent de Paul’s 2005 Annual Meeting and have been revised as needed (last in 2021) so that good governance policies are in place and are in compliance with:

• The Rule of the Society,
• The Charter of the Society (a.k.a. Articles of Incorporation),
• Bylaws of the National Council while leaving flexibility for compliance with national and state laws that govern charities.

 How Many Kinds of Bylaws Are There for Councils and Conferences?

 Because of the possible structures that exist for unincorporated and incorporated Conferences and Councils, multiple versions had to be created.  There is one set of Bylaws for the National Council and three sets of Bylaws to choose from for each Conference, District Council and Diocesan Council.

• BYLAWS for Conferences without a Board of Directors
• BYLAWS for Conferences with a Separate Board of Directors
• BYLAWS for District Councils with a Separate Board of Directors
• BYLAWS for Archdiocesan/Diocesan Councils with a Separate Board of Directors
• BYLAWS for the National Council
• BYLAWS for District Councils with an Integrated Board of Directors
• BYLAWS for Archdiocesan/Diocesan Councils with an Integrated Board of Directors
• BYLAWS for District Councils without a Board of Directors
• BYLAWS for Archdiocesan/Diocesan Councils without a Board of Directors
• BYLAWS for Conferences with an Integrated Board of Directors

 Why Do We Need These?  Let’s Just Follow the Rule.

 Because Bylaws may be cumbersome, they are frequently neglected or even disregarded as a tool for governance.  They are, however, essential to maintaining order and propriety within the organization.

SVdP governing entities must pay careful attention to Bylaws. They can take on added importance during governance disputes centering on the way an organization is carrying out its mission.  These disputes can take many forms:

• A non-conforming entity needs dissolution.
• A Board member who is voted out of office seeks reinstatement.
• A dissident group within the organization attempts to gain control or a faction mounts a legal challenge to a Board decision.

In these difficult situations, carefully-crafted Bylaws, and adherence to them, can help ensure the fairness of governance decisions and provide protection against legal challenges.

Bylaws determine how SVdP is structured. Bylaws specify whether an organization has members, define the duties of officers and Board members, and identify standing Board committees.

An important function of Bylaws (if this matter is not covered in the Articles of Incorporation) is to specify how Board members are selected.  This, along with the specification of the maximum number of Board members, determines how workable as a team the governing body is.

Bylaws, along with state law, determine the rights of participants in the structure, such as the rights of members to be notified of meetings, the rights of Board members or officers whom others may want to remove from office and the rights of Board members to indemnification.

Bylaws determine many procedures by which rights can be exercised.   For example, Bylaws may require a certain form of notice for meetings, or they may specify whether Board meetings can be held by telephone or whether elections can be conducted by mail.  Other procedures defined in Bylaws pertain to the election/selection of officers.

 The Fun Stuff – Some Real Situations

1. The Board of the Diocesan Council, in putting together its slate of officers for the next year has asked Christi to serve as Vice President. Christi has been on the Board for the last three years and they all think she’d be a good fit for the VP job. Christi started volunteering with SVdP when her Church, United Methodist, partnered with the Council on their Food Pantry.

• Bylaws issue or Rule issue?

This is both a Bylaws issue and a Rule issue.  Christi is non-Catholic and cannot serve as an officer.  The President of the Diocesan Council appoints the officers after consultation with the District Presidents – not the Board.

2. Christopher was just elected as President of the Council. He has never gotten along with Gracie, the ED; so right after he is installed as President, he fires her and puts Jake in the job.

• Bylaws issue or Rule issue?

This is a Bylaws issue.  It is the responsibility of the Board of Directors (not the President) to hire and fire the ED/CEO.

3. The new President of the St. Frederic Ozanam Conference presents his new officers to the Conference at his first meeting. Tom raises an objection to the new Treasurer and Secretary and says he will not support them. Others in the room agree.

• Bylaws issue or Rule issue?
• Bonus issue!

This is a Bylaws issue, a Rule issue and an Aggregation issue.  The President appoints the officers after consultation with the Conference.  “Consultation with” does not mean “approval by.”  The President may decide that the objections are not sufficient for a change in choice.  The Conference must work as a team and refusing to support the officers is not an option.    Also, it may have been overlooked, but Frederic Ozanam has not yet been canonized – he is Blessed Frederic.  In addition, unless the parish in which the Conference resides is named for Frederic Ozanam, Conferences are prohibited from having his name.  The same holds true for “St. Vincent de Paul.”

4. At the regular second meeting of the month, Katie, a member of the St. Mary’s Conference and a member of the parish staff, tells the Conference members that the Church’s A/C system has broken and it’s going to cost the parish $60,000 for a replacement system. The Conference President suggests that the Conference use $10,000 from its bank account to “help the parish defray the cost.”

• Bylaws issue or Rule issue?

 This is a Rule issue.  Conferences and Councils are prohibited from giving donations to (and this includes raising funds for) outside organizations no matter how worthy the cause may be.  The parish is an outside organization.  The funds of the Society must be used for the purposes of the Society.

 In Summary

 Because your Conference or Council uses the National Council’s trademarked name “Society of St. Vincent de Paul” with the express permission of and a limited license issued by the National Council, the Bylaws adopted by your Conference or Council must be formally approved.

Conferences must have their Bylaws approved by their District Council.  The District Council Bylaws must be approved by the Archdiocesan/Diocesan Council.  Archdiocesan/Diocesan Council Bylaws must be approved by the National Vice President for the Region.