What Is The Ideal Size for a Charity Membership?

Q. Is there an ideal membership size for a charity?

A. There is no "one size fits all" when it comes to charity governance. Nonetheless, just like the most effective charity boards are small ones, so to when it comes to charity membership. The smaller the charity and not-for-profit membership, the more effective it will be.

Why limit the membership in a charity? While the rights of charity members varies by province and jurisdiction, as well as the organization's bylaws, members will uniformly have at minimum the following rights:

1. Must agree to any bylaw changes and amendments;
2. Appoint auditors;
3. The right to review financial statements (in most statements).

But the most critical right members have is to elect and terminate the charity's directors. This is the most powerful right in a charity and not-for-profit.

Some of the risks of having a large charity membership include:

1. electing a director who doesn't work well with the rest of the board;
2. not achieving a quorum; and
3. chaotic members Annual General Meetings (AGMs).

Perhaps the most egregious case of a large charity membership happened about 30 years ago. There was a hospital foundation in Toronto which gave membership to all donors, in perpetuity. As you can well imagine, the membership grew into the thousands. When the foundation was required by legislation to revise its constitution, it didn't have accurate records of all its members. To make the changes, it cost the foundation tens of thousands in legal fees to obtain a court order and guidance how the amendments would be executed.

The solution is to create multi-tiered classes of membership.

Class A Members, which is kept to a minimum, and ideally consists of just the charity's founder, or a small cluster of 3-5 individuals, have voting rights.

A second class of members, Class B membership, can be conferred on donors, or to generate membership fees. Those in the Class B class don't have voting rights, and consists of those who are happy to donate to the charity but don't want, or shouldn't have, a say in the charity's or not-for-profit's governance.

Class B members do not have voting rights and nor do they have the right to attend the Board of Directors' AGM or member's AGM.

Class B members may be granted a very limited set of rights, such as:

1. the right attend "information sessions" run by the board;
2. the right to review annual reports.