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Nonprofit Law/Membership vs. Directorship


QUESTION: Is it beneficial to have a Membership vs. a Directorship? I have seen that obtaining a 501(c)(3) is easier with a directorship, but are there any pro's for a Membership status?

ANSWER: It appears that you are asking whether it is easier to obtain IRS approval on for Form 1023 application for exemption if the nonprofit is a Directorship organization instead of one that has a voting membership.  Just because people can vote for the Directors, which is the meaning of a "Membership" organization under State law, that does not effect at all whether the IRS will grant exemption approval. Therefore, I don't understand why you "have seen that obtaining a 501(c)(3) is easier with a directorship."  Now, if there are members that are getting benefits from the organization, that is another matter and then, yes, it would be harder to obtain IRS approval for exemption as a 501(c)(3) organization.

As for your specific question, the main pro for Membership status is that the members generally would be more inclined to support the organization.

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.    

---------- FOLLOW-UP ----------

QUESTION: No, I am merely trying to understand the difference between the two and the pros and cons for each. I was stating that I had found that as a pro for a Directorship. We are building a business and are trying to decide its structure. Thank you for your earlier reply.

A good discussion is starting from page 31 of "Starting & Building a Nonprofit : A Practical
Guide" by Peri Pakroo, from Nolo Press (2005)
The Google Books version is available (bookmarked to page 215) at
--- Start of Excerpt ---

Should You Have Voting Members?

    If you Incorporate your nonprofit, you'll need to decide
another issue- whether to allow people to join your nonprofit as
members with voting rights in nonprofit affairs. (This is sometimes
referred to as choosing a membership or nonmembership structure as
described below. Generally speaking, state laws give legal voting
rigtss to members of nonprofit corporations, allowing members to
participate along with directors in corporate decision making.
Among other rights, voting members of a nonprofit corporation  have
legal rights to elect Board members, to approve or reject changes
to the nonprofit's articles or bylaws, and to vote for a merger or
dissolution of the nonprofit.

    Voting rights and other membership specifics should be
detailed in your nonprofit's bylaws, If vour bylaws don't address
the issue or you have no bylaws at all, (the laws of your state
will apply as a default. Some states ask you to specify a
membership or nonmembership structure in the standard articles of
incorporation. If your state's standard articles ask you to choose
a membership structure, make sure that your articles are consistent
with your bylaws, which will undoubtededly cover the issue at more

Why You Probably Don't Want Voting Members

If your members have voting rights, they can have a major say in
steering your nonprofit. If they don't, then only the board will
have voting rights-and the legal power to guide the nonprofit. In
practice, involving all members in corporate affairs is too
burdensome for many small nonprofits. To keep things simple and
avoid the hassles involved in allowing members to vote-convening
and giving notice of meetings, especially-most nonprofits choose
not to give members voting rights. Even though these participants
may not have the right to vote, they can be treated much like
voting members - for example, they can receive benefits like a
newsletter or reduced admission to events. If a nonprofit does not
want voting members, it can opt not to have members at all. Or, in
most states, it can set up a special class of members with no
voting rights. If the nonprofit doesn't have members or if no
members are given voting rights only the board of directors has the
power to vote. However, bear in mind that state laws and processes
governing membership rights vary consider ably, so proceed with
caution if you want to allow people to become members but don't
want to give them voting rights. Restricting voting rights from
some members doesn't mean that those members have no rights at all
under your state's laws. For example, state laws typically
establish rules for expelling members, which will generally apply
to nonvoting members and voting members alike.
---End of Excerpt---

Harvey Mechanic, Attorney at Law -

P.S. This response is intended to be a general statement of law, should not be relied upon as legal advice and does not create an attorney/client relationship.  

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Harvey Mechanic


DO NOT GIVE ME INFORMATION THAT YOU WANT KEPT CONFIDENTIAL. I am an attorney and I volunteer time to answer general questions about U.S. Federal income tax issues of nonprofit 501(c)(3) public charities only. Those questions could be about establishing and maintaining legal requirements for such non-profit organizations in the United States, including Internal Revenue service filings and requirements. I will not be working on this free forum to answer questions about Nonprofit's possible unrelated or for-profit businesses or how to fill out forms. This forum is only for general questions about federal tax law, not as the law applies to your specific situation. If you do not make your question public then I will not be spending much of my donated time on answers that would not benefit the public. If you have other questions, please contact me at I will reply from my email. In any case, do not reveal confidential information to me until after I have contracted with you to provide personal legal services. My responses on this forum are intended to be general statements of law, should not be relied upon as legal advice, and do not create an attorney/client relationship. For me to consider your individual situation and how the law applies, I would need to gather extensive information about the situation. To search my previous answers you can do a Google search by "" without the quotes and then add your search terms before hitting enter.


I have been practicing law and especially the law of nonprofit organizations since 1990 when I was admitted to the New York Bar and I have maintained my status with the Bar since that time.


B.S. Columbia University in New York City, 1970

J.D. (Law Degree) Brooklyn Law School, 1990 -- Cum Laude.

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