Articles of Incorporation

Is it time to update your original charter?

The Articles of Incorporation (or charter) is the highest legal document in a nonprofit organization. Unlike congregation's constitutions, this document is filed with the state and takes precedence over any other document approved by the congregation, include the constitution.

Do you know where your incorporation documents are? Do you know what they say?

Top Priority: Restate the incorporation documents in the constitution as a preface, as exampled by the ELCA Constitution.

These documents, for all their importance, tend to be greatly ignored. Examples include a congregation that has not updated theirs since 1907, only to find out they are still required to have three trustees, four elders, and four deacons on their church council; the meaning of those terms have changed today and they do not do any of that anymore. Another congregation requires its pastors to be male and members of the German Lutheran Ministerium, an organization that no longer exists. A number of congregations have regulations for the term length of council members that do not agree with their constitutions. This is a real problem!

What to Include

Though laws very from state to state, the ELCA's Articles of Incorporation provide a good example of what to include.

Top Priority: A statement specifying that the constitution serves as bylaws for the purposes of the law.

Note: The IRS provides suggested language for incorporation documents.

Note: The order of the articles is not important.

Article I: Name of the corporation. This is the full legal name.
Article II: Purpose of the corporation. This should be as broad as possible, and simply saying "for religious purposes" is usually sufficient. Charitable or educational purposes may also be applicable. If more is stated, the description should fit within the permitted IRS 501(c)(3) exempt purposes. Such details also might parallel the Preamble to the Model Constitution.
Article III: No pecuniary gain. A clear statement of nonprofit existence.
Article IV: Duration of the corporation. Usually only required by states if the corporation is not perpetual, which congregations generally are.
Article V: Location. Primary address of the corporation.
Article VIII: Members. A statement that the congregation has members.
Article IX: Constitution serves as bylaws. Most states require nonprofit corporations to have bylaws, not constitutions. The ELCA has proven over and over again in legal proceedings that our constitutions serve as bylaws for legal purposes, but congregations' incorporation documents should include such a statement as a matter of good order.
Article XI: No stock. A statement that the corporation does not have stock.
Article XII: Amendment. Most state laws generally allow the Congregation Council (the board) to amend incorporation documents. However, it might be wise to hold the document to the same standards that the constitution or bylaws are held to, requiring a majority or two-thirds vote of membership entitled to vote, as defined in the constitution.
Additional: Affiliation with the ELCA. Many congregations like to include a statement of affiliation with ELCA or its lawful successor. Such a statement should parallel *C6.01. and *C6.02. of the Model Constitution.

Note: Check with state law for any additional requirements. Each state likely has an outline of what is expected to be put in incorporation documents.

Warning: Generally do not include anything that is already stated in the constitution, such a term lengths of council members.

For Success: As Article II demonstrates, it can be good to reference the constitution. In regards to purpose, church affiliation, amendment, and anything else that might overlap with the congregation's constitution, it would be wise to address those overlaps directly.

ELCA Articles VI, VII, and XIII are skipped above because they are already in the constitution. If the congregation deems it necessary to include them, how is it going to be worded to not conflict with the current or future editions of the constitution?

Warning: The ELCA constitution requires congregations to get synod approval before updating incorporation documents. ELCA Bylaw 9.53.03.