Leadership Letter
April 2021
ASK COUNSELOR TARA
ASCE’s General Counsel Tara Hoke responds to legal questions posed by Sections and Branches here each month. Send Tara an email with your question.
What rights does the law provide to members of a charitable corporation such as ASCE?
While laws vary by state, charitable corporations generally make a choice at the time of their incorporation whether to become a membership or a non-membership organization. Organizations that do not choose to have members (e.g., ASCE Foundation) are considered to be board-driven, meaning that all the most important decisions of the charity are made by the board.
Organizations that include members, on the other hand, must afford certain rights to their members – rights that are spelled out either in the state statutes or in the corporation’s organizing documents. Such organizations are considered to be member-driven, because even if governance is primarily handled by a board of directors, the board must still afford a voice to its membership in some of the charity’s most critical decisions.
The rights typically granted to members of a charity include the following:
1. The right to elect directors. While state laws typically give charities the right to limit this right or to establish non-elected positions, the default rule is that the leaders of a charitable organization are elected by vote of its membership.
2. Protection against removal of membership except for reasons defined by law or in the charity’s governing documents.
3. The right to review board minutes and certain other records of the corporation.
4. The right to debate and vote upon actions taken at the charity’s business meetings.
5. The right to vote on fundamental changes to the charity, such as mergers, substantial dispositions of assets, or dissolution.
6. The right to vote on any action that would exclude or limit their voting rights as members.
As four of the six rights listed above relate to voting, it should not be a surprise that some jurisdictions do not recognize “nonvoting” members as legal members of a charity. For example, in District of Columbia, an organization is deemed to have members only if its rules define persons who have “the right, in accordance with the articles of incorporation or bylaws, and not as a delegate, to select or vote for the election of directors or delegates or to vote on any type of fundamental transaction.”
While New York does not have a similarly restrictive definition, it is interesting to observe that – for much of ASCE’s history – the Society has had one or more categories of membership that do not meet this strict definition of membership. That fact is positioned to change following this year’s ASCE elections, when voting members of the Society (demonstrating their ability to weigh in on the Society’s most important decisions) will vote on whether to amend the Society’s constitution to grant voting rights to ASCE’s last category of nonvoting membership: student members.
The election will open on May 1 and run through June 1..