Nonprofit Best Practices | A Short List

I see foundation negligence occur almost daily. Some of this negligence is out of naivety and some of it not so much. JPG has developed a short list of simple best practices to ensure nonprofit professionals (i.e. primarily board members and the Executive Director) don’t find themselves in hot water for neglecting their legal responsibilities as NPO leaders. If you have more best practices you believe we should add to our list, just comment below and we will get them added. Keep serving!

Best Practices

Meeting Minutes. Record and save detailed meeting minutes for all board and committee especially the Executive Committee (Exec Committee = all Committee chairs, Chairperson and Vice Chair).

Executive Director | Chief Executive Officer Annual Performance Review. Review performance and approve increase in compensation and benefits. It is important that this performance review is documented demonstrating who performed the review and approval and how the board members came to their determination. Require signature of ED. Keep on file.

990 Review before Filing. At the very least the Chairman and Business Committee Chair should be required to review and approve the annual 990 form before filing. A copy of the 990 form should be distributed to the entire board with the annual report to assist in explaining the activity on the 990.

Publish Important Documents. 990 Forms for several previous years | IRS Letter of Determination | Public Copy of Previous Years Audits. It is recommended that the organization ensure their IRS Letter of Determination, several previous years 990 and Annual Public Audits are hung on an easy to find place on their website.

Annual Report. The 990 report is difficult to interpret for the lay person. Developing an annual report to help interpret and communicate the organization’s impact and speak to any substantial decreases or increases in revenue is very important. Donors and potential investors want to hear from program recipients. The annual report is a great way to not only re-communicate your mission but also to include pictures and testimonials from actual program recipients. Organizations like Better Business Bureau require an annual report on the organization’s website as well.

Register with Charity Raters. Another great way to communicate and market to the public and program recipients is to ensure your organization is registered with charity raters like BBB, Charity Navigator, GuideStar and Great Nonprofits.

Bylaw Review. Bylaws should be reviewed every 18 months to ensure relevancy for where the Foundation is currently and where the Foundation wants to be in the next 12-18 months.

Board On-Boarding Packet. This packet should include the history of the foundation, annual report, latest 990 report, bylaws, Articles of Inc, Core Values, Director and Officer Insurance summary, NDA, board member expectations, all policies to include the Conflict of Interest policy highlighted requiring signature for the specific policy during the on-boarding process as well as annually thereafter (COI policy review and board member signatures are required for audits)

Board Member Term Tracking. Ensure that term limits are reviewed at each board meeting to ensure the board is planning appropriately for outgoing and incoming members.

Board Member Nominees. Ensure an SOP is developed and followed closely for business continuity. Technically, if a board does not prepare for expiring term limits for board members, the board is negligent of mismanagement.

Board Member Makeup. Ensure the board has certain skillsets to protect the org (i.e. general counsel, CPA, marketing expert). Advise against having family members on a public charity. Ensure your board appropriately represents those you serve (i.e. diversity).

Board Member Vote Tracking. Ensure votes are tracked and saved by the board secretary.

Committees. Form committees to ensure that workload is appropriately distributed. Examples of committees: Executive Committee, Business, Programs, & Development. It is the chairperson’s responsibility to hold the committees accountable.

Messaging | Crisis Management. An established foundation should always have a decision matrix and consistent messaging available for comments and responses in the public. When a public situation arises that has potential to tarnish the foundation and/or the foundation’s members (board members, staff members and non-paid staff), it is the responsibility of EVERY member (not just board members but staff members as well) to protect the foundation’s reputation. That is part of the fiduciary responsibility. It is highly recommended that a PR firm be consulted immediately for emergencies.

SoPs and Policies

  • Non – Disclosure Agreement

  • Conflict of Interest Policy

  • Communication Policy (this communicates the expectations for board members voting, board to staff communications etc.)

  • Whistle Blower Policy

  • Document Retention / Destruction Policy

  • Joint Venture Policy

  • Diversity Statement/Policy

  • Anti-harassment Policy and Complaint Procedure

  • Budget Process SOP and Policy

  • Property SOP

  • Logo Use Policy

  • Gift Acceptance Policy

  • Conflict Resolution & Escalation Expectation Policy (to be reviewed and signed annually)

  • Background Check Policy

  • Corporate Credit Card/Debit Card Policy

  • Drug and Alcohol Policy

  • Travel Expense Policy

  • Social Media Policy

  • Business Continuity SOP

  • Donor Designated Fund Policy

  • Image Release Policy (includes photos, videos etc.)

  • Bank Account Reconciliation Policy

  • Bank Transfer/Withdraw SOP

  • Crisis Management Policy and Procedure

  • Scholarship Winner/Selection SOP (for foundation’s awarding scholarships)

  • Delegation of Authority Policy

  • Donor Privacy Policy

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