|(While principles discussed here apply analogously to for-profit businesses/plans, the details are specific to the non-for-profit/community sector.)
In 1981, the Victorian Government, at the time we thought belatedly, introduced the Associations Incorporation Act to provide a measure of protection to volunteers acting in good faith within the rules and purposes of their thus incorporated organisation.
The legislation has been amended from time to time and revised regulations issued over the intervening years, most recently just this year (2009), but one of its principle distinctions has stood through that time without significant revision—the idea that each such organisation must have a Statement of Purposes which sits alongside and has comparable standing to its Rules.
Those Rules are defined as constituting "the terms of a contract between the incorporated association and its members for the time being" and are subject to very specific requirements under the Act and the Regulations, including a set of Model Rules offered as a low cost template for organisation which do not have more specific structural requirements.
For many organisations, like a hypothetical Baddaginnie Badminton Club, their core purposes may be largely implicit from their name, though there is still reason for such a club to spell out its Purposes more explicitly. This may be better understood by use of the common but not mandated legal convention of dividing those Purposes into primary and secondary sets.
Such a secondary set is typically designed to give the Incorporated Association the right to do almost anything that can be imagined might complement, subsidise or otherwise assist their primary purposes and can typically be very long. Making doubly sure, the Act explicitly grants Associations reserve powers to enter into conventional financial arrangements and even to "do all such other things as are incidental or conducive to the attainment of the purposes and the exercise of the powers of the incorporated association" provided these do not conflict with its explicit Statement of Purposes or Rules. Even with that catch all, it is still appropriate to make explicit provision in the secondary set for at least the kind of supporting activities that the organisation is likely to undertake.
However, the real point here is the primary purposes, most especially when these may not be entirely obvious from the organisation's name.
Having spent what feels like way too much of my lifetime in formal meetings, I have of recent years developed a strong personal preference for what I call "agenda-free meetings"—informal get togethers with interesting people in which the conversation can run any which way. Such gatherings really only need a time, place and notification list, and are likely to have a name more reflective of their history than any purposes. It is when such groups decide that they want to do more than chew the fat that things get more interesting.
If you are going to get Margaret Mead's "small group of dedicated individuals (to) change the world" they really do need to start out with a collectively recognised purpose in mind. And massaging that purpose into a form of words that the group can agree to can be a very important step forward. Certainly it is not something to be rushed, nor to be got wrong, nor left entirely to the unavoidably idiosyncratic efforts of some particularly motivated individual. The resulting primary Statement of Purposes needs to work for all concerned and needs to survice the test of time.
The trick is to find a sweet spot between too vague generalities and being overly prescriptive. Founding and prospective members need to identify with the Statement of Purposes and not feel it locks out or marginalises their own take on the organisation's potential. And much of this needs to be able to happen implicitly as the actual words are likely to be rarely read or referred to except when things threaten to go off the rails or somebody arrives with an often literalist intent to stamp their take on the group, though that is not how they are likely to think about it to themselves. More likely they will just suffer, as so many do, from an overly simplistic value system and convince themselves it is all just their knowing what is right and what is wrong.
Such people will find their way into most organisations from time to time. Strong organisations with clear and agreed and purposes and developing traditions are able to absorb such outbursts of energy and come to either a merging or a parting of the ways within a reasonable timeframe. But without explicitly agreed purposes, such disturbances can fracture or take the life out of a well intentioned group, especially in its early days.
So it behoves any formative group which has aspirations to action to take some time out before trying to set too much else in concrete to agree to not just their primary Statement of Purposes but to the prioritisation that may be implicit is something as simple as the ordering of a list of points. This does not even need to lead directly to Incorporation under the Act but it is also an essential step on that journey.
Today's other challenge for the voluntary sector in particular is to migrate organisational practice into a world increasingly dominated by primarily asynchronous communication over the internet. While we should never underestimate progress in that direction, the new media are not yet well equipped to tackle this level of consensus building.
(The author has held senior positions in too many voluntary organisations to list since his teenage years. He presented a seminar on the Purposes and Structures of Virtual Organisations as a visiting fellow of The University of Melbourne Department of History and Philosophy of Science in the early internet year of 1996. Seminar handout.)