As You Start a Neighborhood Association, You Need to Decide On Structure

We have reserved the organizational questions that will vex you when you try to start a neighborhood association until the last page of this series of articles.  Below we address some common issues regarding naming your group, determining what officers to have, and who can be a member, all of which have to be decided before you can write your by-laws and then incorporate, should you wish to do so. 

Naming Your Organization

You always need a temporary or permanent name when you start a neighborhood association.  "Citizens Against More Commercial Zoning" always scares City Hall more than just a group of neighbors. Sometimes this is straightforward.  If the name of your neighborhood is well-established, you should probably use "XYZ Neighborhood Association."

If you want a little more sizzle, conduct a brainstorming session with the entire group or with a smaller group, but our advice is to retain the words neighborhood association and add another word somewhere.  The phrase XYZ Neighborhood Improvement Association is common. 

Our advice is to keep it simple and straightforward, rather than trying to be clever with wonderful names such as XYZ Progress, XYZ Rising, or New XYZ.  These names may be a great rallying cry, but they can confuse new residents and the governments, officials, and non-profits with whom you need relationships. If you are intent on a more creative name, try to redirect your energy into a riveting tagline.

If the name of your neighborhood is not established and people call it different things or have never conceived of your particular boundaries as a neighborhood, your problem is more difficult. First work on naming and defining neighborhood boundaries, and then find a name for the neighborhood association.

Neighborhood Group Membership

As you start a neighborhood association, at some point the question of membership will be raised. Will everyone who lives in the community automatically be a member of the neighborhood organization, or will they have to sign up?

You can offer free memberships, if your goal is simply to have names, addresses, e-mails, or phone numbers so you can communicate better or so you can control who gets to vote. In this event, feel free to ask households for demographic or other types of information about themselves that would be useful to the community, and be sure to give them a membership card or some other token of appreciation for joining. If you can offer a perk, such as a discount at a local business, so much the better.

If you want to offer memberships with dues or a requirement for service or some other type of non-monetary contribution, that certainly is more common and perfectly legitimate. You could choose to invent a special process for granting a scholarship or waiver for low-income or unemployed people, seniors, or students. 

You also might offer an associate membership for those who can't or won't pay dues for your neighborhood association. Some groups decide that associate members can vote, others that they can speak but not vote, and others allow only an observer formal role. 

Officers For Neighborhood Associations

The number and type of officers needed varies widely. Use your best judgment when you start a neighborhood association; you can always adjust the results later. You need a president or chairperson, or co-presidents if you want to split the work. If you choose shared leadership, make sure the two persons like each other and that there is a clear division of duties. Otherwise you will end up with half a president instead of two. But whether you need a vice-president, secretary, and treasurer depends on your game plan. You don't need a treasurer until you have money, and you don't need a secretary until you want to write letters or take minutes.

On the other hand, you need to name all officers if you intend to incorporate right away.

Sometimes the secretary is called the recorder. If you did not elect a vice-president and the president needs to be absent, you can either change the meeting date or ask someone to substitute on a one-time basis. Just think before you act automatically.

Consider the term of office carefully too. If you are a new neighborhood association, you may want to ask for only a six-month commitment, which allows graceful replacement of those who cannot perform or whose enthusiasm cools.  Certainly there are disadvantages of such a short term with a new group, so you need to think about how smooth or rocky your first meetings and projects will be. 

In urban neighborhoods, it is often very effective to have a block-level structure under the main neighborhood association. These block captains, as they frequently are called, can be a point of contact for the neighbors who have questions about the organization, complaints that the organization might take up, or intelligence for the group. For more on this topic, see our page on block units.

By-Laws When You Start a Neighborhood Association

Sooner or later, someone will suggest writing by-laws. Leaders need to decide if the group is mature enough to determine what the neighborhood association by-laws should be.

At the most basic level, by-laws state the name and purpose of the organization, give its mailing address, list the officers (not by name, by office), and tell how the officers are selected, for what length of time they serve, and the duties and powers of each office.

If there is a board of directors, the number of directors, how they are selected, how long they serve, and whether their terms are staggered are specified. By-laws also describe how one becomes a member. If there are to be dues, the by-laws may say the dues are set by the neighborhood association or by what process, and how often they may be changed. We suggest that you not set the dollar amount of the dues in the by-laws. Also the by-laws may state how often meetings are held or a minimum number of meetings per year.

You also must include a process for amending the by-laws themselves.

Incorporating a Neighborhood Association

By-laws are prerequisites to incorporation almost everywhere. But just because you have written by-laws to establish an orderly process doesn't mean that you have to incorporate.

Incorporating a neighborhood association implies permanence. There's usually not a need to incorporate a temporary group fighting a rezoning or development, unless you are high risk legally and your officers have deep pockets.

When you start a neighborhood association, you can conduct worthwhile activities for a long time without incorporation, but incorporating offers the same advantages to community associations that it offers to a business: officers probably will not be sued as individuals, if you form a non-profit corporation your "profits" from a carnival cannot be taxed, and so forth.

Before we go further, let's make sure you need to understand there are three separate processes:

• By-laws are necessary for incorporating, but are also very helpful if you decide not to incorporate.
• When you incorporate, in the U.S., you follow the laws of the state in which you are located. That state will require you to be a for-profit or not-for-profit corporation. There could be other titles as well.
• If you want to be a tax-exempt organization for IRS purposes, meaning that your organization will not pay federal income taxes, that is a separate process in addition to incorporating in the state.

So the order in which you or your attorney should draft documents would be first bylaws, second an articles of incorporation suitable for your state, and third the application for IRS non-profit tax-exempt status.

Almost all neighborhood associations are non-profit corporations when they incorporate. This does not mean that the group cannot make a profit on an individual activity; it does mean that the purpose of the association is not to make a profit. Profits from your concerts or festivals can be held indefinitely and allowed to grow through investments, but the non-profit purpose must be stated clearly in the articles of incorporation and followed rigorously in your activities.

Some recent consulting work we have done inspires us to emphasize that being a non-profit means that your president or executive director is not going public with his or her electoral politics preferences. Of course profit-making activities should relate logically to the mission of your organization in promoting your neighborhood. Don't take on an unrelated line of business.

Now it's time to return to one of the previous pages of this three-part series on how to start a neighborhood association (link buttons to them are shown just below), or dig into some of the common issues facing such organizations. Maybe you also will decide that the more detailed information in our ebook on starting a neighborhood group would be helpful.

1. Community Development
 >
2. Community Organizations
 >
3. Start a Neighborhood Association Part 3

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