This article will walk you through nonprofit policy and procedure manual, It is also a tool that can help nonprofits with their accountability by outlining processes, policies, and expectations. This article will also walk you through why such a manual is so important and what key policies and procedures you should include. Keep reading!
Who is this template for?
This template is for all nonprofit organizations.
What are the main sections covered in this template?
Nonprofit policies and procedures manual template includes conflict of interest policy, gift acceptance policy, executive compensation policy, and more.
Accountability is important for nonprofit organizations. After all, they are tax-exempt and rely heavily on donations and other charitable contributions from donors and their communities. Naturally, there is an expectation that nonprofit organizations operate ethically and steward these resources wisely.
A nonprofit policy and procedure manual is just one tool that can help nonprofits with their accountability by outlining processes, policies, and expectations.
In addition to sharing a nonprofit policies and procedures manual template, this article will walk you through why such a manual is so important and what key policies and procedures you should include. Keep reading!
What Is a Nonprofit Policies and Procedures Manual?
Policies and procedures are operational guidelines for a nonprofit organization. They protect the organization by outlining protocols, policies, and procedures that employees and board members must follow as they work to fulfill the mission of the nonprofit organization.
A policies and procedures manual is a comprehensive document that outlines all of the organization’s policies and procedures. This manual serves as a resource and guiding document for staff, volunteers, and board members.
Why Is a Nonprofit Policies and Procedures Manual Important?
There are countless benefits to having a policy and procedure manual for your nonprofit organization. We will review some of the top benefits in the following section—starting with accountability.
Nonprofits should constantly be working to earn the public’s trust through equitable practices, transparency, and accountability. Why is this so important? If a donor, supporter, volunteer, or community member loses trust in your nonprofit, it could have a significant impact on your fundraising efforts and even your reputation.
A comprehensive policy and procedure manual is a great accountability tool for any nonprofit. By documenting policies and procedures in writing, the nonprofit is protecting both itself and its staff by clearly outlining guiding principles as well as potential ramifications for violations.
Having a documented policies and procedures manual also ensures that nonprofits respond to situations in an equitable and consistent manner. When policies and procedures are written down, and include consequences for violations, nonprofit managers must adhere to what is documented each and every time a situation arises.
This ensures that all situations are handled in a consistent and equitable manner, and removes the risk that a manager would change their approach to a situation based on emotion or personal feeling.
Nonprofits must adhere to many different local, state, and federal regulations that, if violated, could result in a nonprofit being shut down or losing its tax-exempt status.
It is important to have policies and procedures in place that ensure adherence to those regulations so that the organization is protected.
Having all policies and procedures documented in an easily-accessible manual allows staff, volunteers, and board members to react to situations in real time by having all of the needed information at their fingertips.
If nonprofit stakeholders are unsure of what a policy is or where to find the information, it can create a back-and-forth dialogue that will inevitably delay action on whatever the situation is.
Key Components of Nonprofit Policies and Procedures Manuals
There are some key policies and procedures that all nonprofits should have in place, regardless of mission or size. These include procedures related to compensation, fundraising and gift acceptance, conflict of interest, non-discrimination, and finances.
Let’s dive a little deeper into these components below.
Conflict of Interest
A conflict of interest policy helps to enforce nonprofit directors’ duty of loyalty under state law.
This policy is important because the Form 990 asks whether the organization has a written policy, whether the organization’s officers, directors, and employees are required to disclose interests that could be conflicts, and for a description of how the organization enforces the policy.
Gift Acceptance Policy
This policy provides guidance for development staff when a prospective donor offers a gift.
For example, a gift policy may state that the organization does not accept gifts of real estate or that the organization does not accept gifts other than cash. Having this policy in place can help to avoid offending potential donors who offer a gift that the organization is unable to accept.
Executive Compensation Policy
The IRS has parameters for what is permissible for a tax-exempt nonprofit in terms of determining compensation for the organization's executives.
An executive compensation policy should set the process for how an executive’s compensation is determined so that it is in compliance with IRS guidelines.
Whistleblower Protection Policy
Employees who report illegal activities by an employer are protected by state and federal laws that prevent retaliation against whistleblowers for these activities.
Nonprofits need to make it clear that it is the responsibility of their directors, staff, and officers to report breaches in legal or ethical conduct and that these reports will not yield adverse consequences to the reporter.
Board of Directors Nomination & Election Policy
This policy specifies the board recruitment process and how board members are nominated, voted onto the board, and how board officer positions are filled.
Often, this policy will also set the number of board members the nonprofit is required to have. This policy will help to avoid internal conflict among board members when it is election time or when new members want to join the board. This information is often already a part of a nonprofit organization’s bylaws, so you may not even need to create this policy from scratch!
These are just a few of the policies and procedures that a nonprofit organization should have documented in their policy and procedure manual.
Keep reading to learn more about where you can find sample policies and procedures to assist you in creating a manual for your nonprofit!
Free Sample Nonprofit Policies and Procedures Manual Templates
It can feel overwhelming to stare at a blank page and try to create a policy or procedure from scratch. Don’t worry; we’ve got your back!
The below links will show you a variety of nonprofit policy and procedure samples and templates that you can use as inspiration as you embark on your manual-creating journey.
Financial Technologies & Management provides a very comprehensive Financial Policies & Procedures Manual. Financial policies and procedures are arguably some of the most important—so this is a useful tool that you can use as you draft these procedures with your Board of Directors.
MBI Consulting shares another Policies & Procedures Handbook that you can use as inspiration as you work to create one for your organization. This handbook includes bylaws, a conflict of interest and whistleblower policy, an employee manual, and many other useful policies and procedures.
The Nonprofit Leadership Center’s Sample Policies & Forms database includes a sample board giving policy, bylaws, and a sample conflict of interest policy.
The Mississippi Alliance for Nonprofits and Philanthropy’s Nonprofit Policy Toolkit is an incredibly in-depth resource that shares sample personnel policies, organizational policies, and even policies for volunteers.
Tips for Creating a Nonprofit Policies and Procedures Manual
As you begin to craft policies and procedures for your nonprofit, keep the following tips in mind.
It is acceptable for both nonprofit staff and board members to be involved in the creation of policies and procedures for the organization.
However, it is important to clarify roles in policy creation as well as voting procedures for the board. If your organization has a human resources director, it may be most appropriate for them to oversee the initial creation of new policies and procedures. However, the Board of Directors will always have the final say over implementing the policy, and should have a formal vote to adopt.
Drafting a new policy manual will require research. It is necessary to know legal requirements of your state as well as any federal requirements your organization must abide by.
Before voting on a policy, it is important to solicit feedback from key stakeholders (perhaps a board committee, a human resources director, etc.) to try to anticipate any challenges or pushback that may result from the policy.
Nonprofit life is fast-paced and unpredictable. Often, situations arise seemingly out of the blue and require a quick response by nonprofit leaders.
It is a good idea to keep track of these situations and of any other trends you are noticing within your nonprofit that may eventually require a written policy. This will allow you to draft policies proactively, rather than waiting until there is a crisis to determine your stance and expectations. Difficult situations can be avoided if there is a policy in place to provide guidance.
Revise, Revise, Revise
You might not get it right the first time—and that is ok! After you implement a policy, you may realize that it does not have the intended effect or that it creates an unfair burden on staff or volunteers.
Don’t be afraid to revise and tweak policies after they’ve been implemented so that they are providing a benefit to your organization. However, it is important to follow the documented process and get board approval with each revision and update.
Wrapping Up: The Next Steps
In summary, a comprehensive policy and procedure manual is an absolute necessity for any nonprofit. Having your organization's policies and procedures clearly documented will help increase efficiency, ensure equity and consistency, and help protect your organization from adverse legal ramifications.
We’ve shared with you some key policies that should definitely be included in your manual, as well as a handful of free templates and samples to get your creative juices flowing.
You’ve got all the information and tools you need to start working with your team to develop a solid policies and procedure manual for your nonprofit. Good luck!
With the right tools, nonprofits can quickly scale fundraising and programming and take back their time. But, what makes something the “best” tool? And how do you justify an additional expense in a resource-constrained organization? Download this guide to learn more.