8 policies and procedures needed by nonprofit organizations

Form 990 has a section that asks questions about your organization’s policies and procedures. Having the needed policies in place is another way to prove good governance. Here’s the list for you to verify for your organization:

  1. For local chapters, branches, or affiliates, written policies and procedures must govern operations to be consistent with the exempt purposes of the parent organization.
  2. An organization’s governing body must review the Form 990 prior to filing. It helps to have a written policy regarding the review process.
  3. Conflict of interest policies aren’t mandatory, but are a sign of due diligence. When officers, directors, trustees and key employees disclose interests annually that may create conflicts, the organization is better protected. If a conflict of interest policy exists, it needs to be monitored and enforced.
  4. A written whistleblower policy protects employees.
  5. Document retention and destruction policies provide clear guidelines about what needs to be kept and for how long.
  6. A written policy for compensation process and review for the CEO, Executive Director, or other key employees keeps such financial dealings above board for donors and other interested parties.
  7. A policy or procedure regarding a process to evaluate participation in joint ventures or other partnerships demonstrates fiscal management and intent to preserve tax exempt status.
  8. A written gift acceptance policy that requires the board to review any unusual contributions helps keep the organization from accepting a donation that becomes a burden due to unseen problems or liabilities.

Making sure that your organization has the above policies in place not only helps you with filling out the Form 990, it ensures excellent governance of your organization.