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Policies are required for every nonprofit. Policies are different than Bylaws. Read that again.
No longer can Boards state "we didn't know" or my favorite, "we haven't been caught yet". Sheesh, already.
Policies differ from Bylaws.
Bylaws can only be amended/updated one time per year. Once.
Policies can change as often as needed.
What policies do nonprofits really need? There are 3 policy manuals that every nonprofit SHOULD have.
Operations: The top paid executive should keep an Operations Manual that lists and holds all the policies set forth to run that nonprofit. Remember, the Board does not need to vote on operational policies.
A short list of what should go into an Operational Manual:
Recruitment and hiring:
-How to find and hire employees.
-Attendance: What to do when employees are absent.
-Confidentiality: How to protect sensitive information.
-Workplace safety: How to ensure a safe working environment.
-Customer service: How to handle customer inquiries and complaints.
-Data handling: How to collect, store, and use data.
Benefits:
Well-defined operational policies can lead to:
*Improved efficiency and productivity.
*Reduced errors and risks.
*Enhanced consistency and accountability.
*Better employee understanding and compliance.
Financial: Financial policies define a shared understanding of how the organization will develop its financial practices and manage its resources to provide the best value to the community. Define boundaries. Financial policies define limits on the actions staff may take.
Examples of financial policies commonly used by nonprofits include a policy that describes:
-How cash is handled
-Whether and how a board member or an employee’s travel expenses will be reimbursed
-The board's role in reviewing the executive director's compensation
-How the nonprofit’s assets are invested
-Internal financial controls
-Checks and balances used
when state and federal reporting is due and who does it
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