Dear Members of the USTC AF,
We are writing you this letter to inform you of the project we are undertaking to significantly revise the bylaws of the USTC AF.
In this letter we will present you the historical background, the deficiencies of the bylaws, the problems we have encountered in the past, and the collective recommendation from the current board of directors on what the changes should be. We also would describe the procedural steps we desire to undertake to effect this revision, as well as ways you can get involved in the project and have your voice heard.
The USTC AF was founded in 1995 and incorporated in the State of Delaware in the same year. One of the founding members, Mr. ZHANG, Shangyou, wrote the original bylaws. To the best of our knowledge we did not utilize paid professional help. The bylaws had since gone though a number of revisions over the years, but had largely retained the same format. The current bylaws are available on our web site.
While this set of bylaws have supported our organization for more than 20 years. There are a number of obstacles that have been inhibiting factors in promoting our members participation, smooth operation, and overall rate of growth. Major deficiencies include:
1. Lack of definition of membership
2. Clarity on the executive structure, and delegation of authorities
3. Clarity on board elections, as well as decision making process
The rest of this letter will explain these issues in more detail, plus a number of other smaller issues, and makes recommendation on a major revision effort for the bylaws.
The USTC AF board of directors (The “Board”) proposes a simple set of steps below for this project.
1. Discussion of this issue within the current Board, this has taken place.
2. Drafting of a document to the membership body (this letter).
3. Review this letter by all board members, revise with board consensus.
4. Send out this letter to the membership body, collect feedback and make adjustments.
5. In parallel to step 3 and 4 above, engage a professional law firm to help drafting the new bylaws according to our desires laid out in this letter.
In terms of the actual bylaws text, our initial consultation with legal professionals had indicated that it is a much preferred approach to start with a clean template of typical non-profit organization, and then customize it to our needs.
In the following sections, we will discuss key aspects of our organization, how they are defined in our current bylaws, and the proposed changes.
The USTC AF is a membership-based organization; the power of the organization ultimately rests with the membership body. The current bylaws defines a procedure whereby anybody making a donation automatically becomes a member (or an annual type or life-time type). This creates problems and confusion when: (1) A donation is made by a husband/wife pair, (2) A donation is made by an organization, and (3) the donor never desired or agreed to become a member.
As such, we believe it is in our best interest to overhaul such a non-traditional membership structure, and use one that is conventional for a non-profit organization. We will give the following instruction to our lawyer:
- The USTC AF is a membership based organization, power over the organization rests with the membership body.
- We offer membership on a yearly basis, to be purchased for a fee, or to be granted with a donation, subject to a membership agreement.
- Membership dues and membership-granting donation levels are to be determined and revised by the board on an ongoing basis.
- We will also offer “life-time membership” for the sole purpose of continuing such commitment to existing life-time members.
ORGANIZATIONAL AND CONTROL STRUCTURE
The USTC AF did not have a clear control structure defined, leading to the confusion of: (1) Who can speak for the organization, (2) how can decisions be made, (3) who has what authority? and (4) what authorities are needed to do what kind of work?
Fortunately a typical corporate legal structure (as defined by the State of Delaware) already offers a sound set of operating rules for us. All we need to do is clarifying a few things that are specific for us, and the legal professionals should be able to help us ensure that bylaws are clearly drafted to reflect them. These instructions include:
- The membership body elects the board of directors, on an annual basis. Each year half of the directors are up for election.
- The board of directors makes decisions for the organization in a collective manner.
- The board of directors shall elect a chair-person of the board.
- The board of directors MAY appoint a “president”, a “treasurer” with all finance responsibilities, and a “secretary” with all legal and compliance responsibilities.
- The “president” is the Chief Executive of the organization. The “board chair-person” is the president if the board fails to make such an appointment.
- The Chief Executive of the organization shall have customary authorities comparable to a typical organization, such as those over finances, personnel, communications, etc.
With organizational control structure set above, we would not need the provisions of the various non-conventional control structure in the current bylaws, including executive committees, etc.
Every year we suffer through an election crisis where we only barely make the quorum requirement as defined by the current bylaws. We have been reluctant to lower the quorum requirement because we wanted to ensure that the board does reflect the desires of the membership body. In the mean time, the lack of membership definition and procedures also hampered our ability to know how many members we are representing. In addition, our “election by email” method may not be fully compliant with our current bylaws or state laws. As such, we plan to provide the following instructions to our lawyers:
- We shall hold regular membership meetings, as required by state law.
- We shall provide expedient means for members to participate in such meetings, including via electronic means, and/or delegate proxy assignments before hand.
- The quorum for such membership meetings shall be 25% as currently defined.
- The election of board of directors shall occur at such meetings.
With election procedures defined clearly as above, we would not need any provisions in the “procedures” and “election” sections of the current bylaws.
SCOPE OF ACTIVITIES AND OPERATION
We have now finished discussion of the major issues in our current set of bylaws. What follows are a number of additional issues we hope to address in the new set of bylaws.
The current set of bylaws defines a number of things that are typically not the “basic principals” of an organization, such as all the awards we offer. Instead, we believe that a proper set of bylaws should define a clear scope of our operations, so that everyone knows clearly what we can do, and what we can not. Many times we have been requested to provide tax-deductible disaster relief, we hope the new bylaws will clearly define the criteria for requests such as these, in principle. As such, the directions we plan to give are the following:
- The USTC AF, as an alumni foundation, defines its mission as: (1) To promote the academic and professional excellence of USTC students, faculty, and alumni; and (2) to promote the academic and cultural exchange between USTC and outside entities.
- The USTC AF is a 501-c-3 charitable non-profit organization as approved by the IRS, in the area of promoting education. As such, The USTC AF shall not carry out any activity or operation that is outside its mission, in conflict with its own IRS 501-c-3 filings, or against relevant federal and state laws.
PROVISIONS TO REMOVE FROM BYLAWS
There are a number of sections and provisions in our current bylaws that are inadequately defined and/or observed in our regular operations. Our suggestion today is to remove them from our bylaws. This should not change anything we do, we should write up separate resolutions to guide our operations in these areas. There are many existing resolutions that do so already. These provisions include:
- Fund Raising Campaign Guidelines
- Expenditure Guidelines
- Guideline for Private Scholarships
- Guideline for Regional Subcommittees.
We’ve outlined our plan to significantly revise our bylaws. While this is a major step in evolution in the maturing process of our organization, it is nevertheless not due to any major changes we want to make to the organization, or any major project the board foresees in the near future that the current bylaws prohibits. The sole reason for the revision is to bring our bylaws from a home-made format to a professionally designed format, in order to facilitate our growth and prosperity in the next 20 years.
As a membership based organization, we represent your interest. Please let us know if you have any objection to our organization adopting such a new set of bylaws, and/or if you have any suggestions for the board.
USTC AF Board of Directors