The Best Strategies for Effective Nonprofit Governance

Without good governance, everything would go into complete chaos, and nonprofit organizations are no different. From coordinating volunteers and full-time employees to working with the finances and the charitable cause, there is no shortage of things that could potentially go wrong, leading to conflicts and commercial insurance claims for your nonprofit.

That’s why it’s so important to focus on the likeness of a government, which in turn makes an organization effective. In the end, it comes down to pristine communication skills and the ability to adapt to anyone you come across in the workspace.

Where do you start when it comes down to taking control of your organization? No one likes a tyrant, but no one cares for a pushover either. Getting the best possible balance of pride, priority, and consistency is key for any business to move forward.

There are certain ways to maintain a nonprofit for the long-term that is successful in the present and for years to come. If you’re wondering where you should start to concoct the perfect recipe for a positive workplace, here are some key tips to consider, via the National Council of Nonprofits.

Five Basic Good Governance Practices

Every organization should implement these core governance policies. They will help the organization to run smoothly and will establish a strong precedent to prevent future insurance claims.

  • When board meetings happen, maintain corporate minutes. This also goes for any committee or board meeting that happens on behalf of the organization. These things come in handy for IRS Form 990, Part VI, Section A, line 8. They will also come in handy if anything said or done during or as a result of a board meeting is called into question. Having meticulously documented minutes could be your saving grace.
  • Written policies and questionnaires regarding conflicts of interest should be reviewed annually. Document in each board meeting when the policy is utilized. You’re going to need to know it for IRS Form 990, Part VI, Section B, Line 12. Additionally, documenting your policies will improve transparency and consistency in their application, and updating them regularly will allow you to review what is and isn’t working for you.
  • Executive director and CEO compensations and benefits must be approved, with the board determining what expenditures are appropriate or not. The key is to look for anything that is excessive. This would be for IRS Form 990, Part VI, Section B, line 15.
  • The board must require a copy of the IRS Form 990 before it is filed. This impacts IRS Form 990, Part VI, Section B, line 11. For a smaller nonprofit who only fills out Form 990-N, everyone on the board needs to be aware of when it needs to be filed annually.
  • The last three annual returns from the IRS should be publicly available for everyone to see, as well as tax-exemption applications and anything else related to that.

Other Practices to Include, Just in Case

There are a couple of other things that the IRS Form 990 asks whether a nonprofit has officially adopted. Those specifically include:

  • Written whistleblower protection policy
  • Written document retention/destruction policy
  • Written gift acceptance policy to govern the receipt of “non-cash” gifts, such as gifts-in-kind and unusual gifts like land, vehicles, artwork and more.
  • Joint ventures–With your IRS 990 form, it’s imperative to disclose the steps that were taken to avoid prohibited private benefit. This can be found in Part VI, Section B, line 16.

If you’re worried about your nonprofit commercial insurance, here are some of the multiple practices you can take to improve the life and organization of your nonprofit. Simple things like focusing on inclusion, orientations, conflicts of interest, newsletters or even agendas are some ways that you can start making big changes to your organization.

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