Membership structures

Open membership

Under an open membership structure, anyone who supports your nonprofit’s vision, mission, and values may become a voting member.

Pros:

  • Increased transparency and accountability – Members can represent diverse interests and challenge your board and officers if they think that they are not acting in the best interests of the nonprofit.
  • Increased stakeholder participation – Because more people are involved, it could encourage more people to volunteer or contribute advice or expertise. Broad community involvement may attract or be a requirement of funders and may help you advance your mission.
  • Potential for increased revenues – An inclusive membership structure could encourage donations, either from the members themselves or from their networks. You could generate additional revenue by charging membership fees.

Cons:

  • Privacy concerns for vulnerable members – Members are entitled to access the names and contact information of other current members. While the ONCA says the information must be used only for purposes related to your nonprofit’s affairs, there is the potential for abuse.
  • Potential for conflict between members and board – Members may challenge and override your board’s authority through votes or court actions.
  • Potential for members to inappropriately direct nonprofit – Unlike directors, your members are not legally required to act in your nonprofit’s best interest (fiduciary duty). Therefore, a special-interest group with a majority of the membership votes could influence your nonprofit’s activities for their sole benefit.
  • Increased administrative burden – You must keep track of a large number of individuals and inform them about meetings and your finances.

The sidebar discusses ways to reduce the disadvantages connected with this structure.


Semi-open membership

Under a semi-open membership structure, you can specify in your bylaws:

  • conditions for membership — for example:
    • criteria for admission as a member
    • the process that must be followed
    • adherence to a code of conduct – if members don’t follow the code, they could be expelled or face discipline
  • a limit to the total number of members

You can set any conditions you like, but you cannot take away the rights that members have under the ONCA, like the right to be heard and the right to vote.

Depending on the conditions you set, a semi-open membership structure could have the same pros and cons as the open membership structure.


Members = directors: self-perpetuating membership

Under the ONCA, directors are not required to be members. However, you can state in your bylaws that directors must be members and limit membership to directors. This structure is called “self-perpetuating” because the directors, acting as members, elect any new directors.

Pros:

  • Centralized and streamlined decision-making – Stakeholders cannot challenge the board’s decisions, which reduces the potential for conflict and court actions.
  • Prevents circumvention of the directors’ legal responsibilities to the nonprofit – Directors are legally required to act in your nonprofit’s best interests (fiduciary duty). Members who are not directors could influence decisions to serve their self-interests rather than the nonprofit’s interests. Having only directors as members avoids this problem.
  • Reduced administrative burden – The board of directors will already have the information to which members are entitled. Your members’ register will be the same as your directors’ register. While the ONCA requires you to have an annual member meeting, it could be added to a regular board meeting.

Cons:

  •  Reduced transparency and accountability – Other stakeholders have no way to hold directors accountable if they neglect their legal duty to act in the nonprofit’s best interests.
  • Reduced stakeholder participation – There is no way to formally participate in the nonprofit’s governance beyond becoming a director. Without broader community input, it may be difficult to properly serve your stakeholders and advance your mission.
  • Perception of “closed club” –If the directors elect their own replacements, there could be a perception that the nonprofit is “an old boys (or girls) club.” This could weaken support for and trust in your nonprofit.


Single member

Under this structure, membership can be limited to a sole sponsoring organization. This model might be appropriate for an nonprofit that is an offshoot or project of a founding organization — for example, a church or service club. The founding organization becomes the sole member. Under the ONCA, you can specify in your bylaws if members can be organizations, individuals, or both.

Pros:

  • Board accountability – The sponsoring organization ensures that the directors are fulfilling their legal obligation to act in the nonprofit’s best interests.
  • Low administrative burden – With only one member, it’s easy to keep track of your membership and inform them of meetings and financial information.

Cons:

  • Limited transparency – The majority of your stakeholders are not entitled to information about your finances or decision-making processes.
  • Limited stakeholder participation – Without broader community input, it may be difficult to properly serve your stakeholders and advance your mission.
  • Perception of “closed club” – Similar to the self-perpetuating model, if a single, unchanging member elects the directors and accepts the financial statements, it could weaken support for and trust in your nonprofit.


Hybrid membership

Under a hybrid membership structure, your directors are the only voting members, and a non-voting class is open to anyone who supports your nonprofit’s work. However, under the ONCA, non-voting members may still be able to vote on “fundamental issues,” like changes in mission, mergers, or the dissolution of your nonprofit.

Pros:

  •  Some stakeholder participation – This structure allows more stakeholder involvement than the self-perpetuating and single-member structures. This may attract or be a requirement of funders and may help you advance your mission.

Cons:

  • Limited board accountability – Since non-director members cannot vote, they can only indirectly influence board decisions by taking them to court.
  • Increased administrative burden – You must keep track of a large number of individuals and inform them about meetings and your finances.


Representative membership

Under a representative membership structure, your directors are one class of voting members, and any additional voting classes consist of members who are elected by and represent different types of stakeholders (for example, regional, youth, or cultural representatives).

Pros:

  • Flexibility to divide voting authority – Many variations of this structure are possible, depending on the number of classes, the size of each class, and the number of votes to which each class is entitled.
  • Increased transparency and accountability – With the right balance of voting authority, this structure ensures that you are responsive and accountable to your stakeholders.
  • Reduced risk of conflict between members and board – Unlike the open and hybrid membership structures, you can limit the total number of members. This reduces the potential for members to challenge or override the board’s decisions.
  • Reduced risk of members inappropriately directing the nonprofit – Fair representation of your nonprofit’s stakeholders prevents one group of stakeholders from unduly influencing the nonprofit’s activities.

Cons:

  • Administratively complex – You have to coordinate the election of representatives. Also, the ONCA requires that member classes must vote separately on some issues, which complicates some decision-making processes.


Other structures

If you know about or can think of other structures, please email us so we can consider adding them to this list.

Reviewed: May 2014