Well-established nonprofits have many policies. Here are just the basic four to get your organization started: 1) Whistleblower Policy, 2) Records Retention Policy, 3) Conflict of Interest Policy (with disclosure statement), and 4) Executive Compensation Policy.
The Internal Revenue Service asks about these policies, and having these policies in place can help keep your organization in compliance with statutory provisions of the Sarbanes–Oxley Act that apply to nonprofits.
You should work with legal counsel to help tailor each of these policies for your organization. Your organization should also make sure that Board members annually sign a Conflict of Interest disclosure statement. Discuss conflicts that arise and any potential conflicts and conflict-of-interest questions with your organization’s legal counsel.
LOANS TO YOUR ORGANIZATION:
If your organization’s founder or any one is loaning funds to the organization for startup (or otherwise), be sure to document that arrangement in writing in the year the loan is made. Our Template Loan Agreement can help, but be sure to have it reviewed and tailored for your organization by your organization’s legal counsel.
Your organization may also want to adopt a policy specifically to authorize certain individuals to make payments on behalf of your organization. See, for example, our template Transaction Approval & Payment Authority Policy. If you decide to have such a policy, be sure to have it reviewed and tailored for your organization by your organization’s legal counsel.