Bylaws

Bylaws are one of the fundamental organizing instruments of organizations in general and corporations in particular. After some time of anxious waiting, Gerber/Hart Library has posted its bylaws for public examination. This is a welcome development.

General Comments

These are among the most carefully crafted bylaws I have ever seen for a nonprofit organization. The lawyer who did this is to be commended for carefully achieving his or her objectives while staying within the Illinois statutes that govern nonprofits.

There is no date on the bylaws, as though we are to assume that they have existed from time immemorial. I am more accustomed to seeing bylaws that have, besides the bylaws themselves,

• a notice of their adoption by the board of directors that includes the date of adoption (so you can go back and check the minutes if need be) and,
• the signature of the secretary attesting to the adoption.

I guess there is no actual requirement that this be provided but I for one would feel more confident of the authenticity of such documents if they contained these items.

One small point that seems to place these bylaws as relatively recent appears on page 3 section 7 "Vacancies." Notice that subtopic (c) has been converted by the word processor to the copyright symbol ©. This would suggest that these are relatively recently written bylaws since the propensity of word processors to make this kind of change to the input actually entered is relatively recent. I believe that MicroSoft Word began doing this in 2007.

One also has to wonder why it took so long for Gerber/Hart management to publish these bylaws. It has been several weeks since a request for the bylaws was made by Kate Sosin, a reporter for the Windy City Times. If this is indeed the current set of bylaws, it could be reasonably assumed that simply printing or emailing a copy could be accomplished in a matter of minutes. Writing such a document, of course, takes considerably longer.

Prominent Features of the Bylaws

Several prominent features of the bylaws are evident:

• Members of all classes are nonvoting members. All power rests with the board of directors.
• "Membership is conveyed upon completion and acceptance of a membership application..." apparently suggesting that not everyone who applies will be accepted as a member. No criteria for acceptance are specified implying that this is at the will and pleasure of someone unspecified.
• Directors serve two-year terms and may serve up to five consecutive terms. This seems to conflict with prior reports of one-year terms for four consecutive terms.
• Directors must be members. But since membership seems to be arbitrary this would imply that directorship is again at the will and pleasure of someone unspecified.
• The number of directors is now specified as three (the minimum required by Illinois statute) to seven. This again seems to conflict with prior reports.
• Successor board members are elected by then-current board members, making this a perfect example of a "self-perpetuating" board.
• Article V Section 13 permits any action by the board to take place without a meeting providing there is a 100% written agreement to such actions taken that is then filed with the minutes, suggesting that a decision by a three-person board having a beer after work can be legitimized by writing a memorandum the next day.
• According to Article IX on page 7 "All books and records of the corporation may be inspected by any director, any member, or that director's or member's agent or attorney, for any proper purpose at any reasonable time." Of course, you have to be a member to initiate this kind of examination. See previous comments about the potentially arbitrary and capricious way of determining membership.
• Article XII indemnifies almost everybody associated with the organization by generously:
  • Promising advance payment of expenses
  • Promising to pay whatever Directors and Officers' Insurance doesn't cover.
• Article XV says that the board can make any amendments it wants by a majority vote (with some minor qualifications like not being inconsistent with law or the requirement that notice be given of the intent to amend the bylaws.)

Are These Bylaws Real?

More precisely, have they been adopted in conformity with prior bylaws? That's a good question and in the absence of prior sets of bylaws it cannot be reasonably determined whether this current set is genuine or a recent fabrication. Further, other records of the corporation would have to be examined to make determinations about things like membership records, board minutes, board resolutions, elections to the board and so forth. A detailed financial accounting that extends over a period of years would also be welcome.

Assuming such records exist they can be examined by the class of individuals mentioned above including "members." The difficulty in becoming a member makes it highly unlikely that anyone perceived as hostile by the current board and officers will ever be allowed to see the corporate records short of obtaining a court order. I would like to be proven wrong on this final point.

Conclusion

This current set of bylaws as published by Gerber/Hart Library clearly place all power in the hands of a three-person board. Currently, one of those board members apparently lives out of state. The current board president exercises power, by many accounts, in a tyrannical and authoritarian manner. All of this is disquieting.

A couple of ideas present themselves:

• Assume for a moment that Gerber/Hart suffers a dramatic decline in public support. There are two consequences that I can see in this scenario:
  • Gerber/Hart will have to use its cash reserves to pay ongoing expenses. Ultimately this will have a catastrophic impact on the financial health of the organization.
  • At some point it will be unable to pass the public support test for charities and the IRS will revoke its public charity status. It may then become a private foundation, but that's an entirely different ball game with entirely different requirements. See the Foundation Center's website for an explanation of these requirements.
• Another possibility is for a class of individuals who were at one time members of Gerber/Hart but who are no longer members by virtue of lapsed memberships to band together to seek redress. If memberships have lapsed because of a failure of Gerber/Hart to notify members of an anniversary that requires a dues payment it might be argued that such a failure constitutes dereliction of duty on the part of Gerber/Hart. Redress might include reinstatement upon payment of back dues along with the right of review of any actions taken by the board in abridgement of Members' rights. I don't view this last course of action as a viable possibility, but I'd like to be proven wrong.

Overall, this current revelation from Gerber/Hart in no way ameliorates the pressing problem of preparing a new home and moving in. I'm still waiting to see how the outcome of that exercise unfolds.