I believe it’s important to pay tribute to a man who profoundly championed equity, freedom, peace, and justice. Dr. Martin Luther King, Jr. was not only a visionary leader, but also a tireless advocate for nonviolent action and peaceful solutions to deeply rooted human rights issues. His productivity alone is staggering—he reportedly wrote five books and delivered hundreds of speeches in a single year, more than most of us will produce in a lifetime.
Dr. King’s leadership was instrumental in shaping the modern civil rights movement and influencing the passage of the Civil Rights Act of 1964. That same year, he was awarded one of the world’s highest honors, the Nobel Peace Prize, for his “dynamic leadership of the Civil Rights movement and steadfast commitment to achieving racial justice through nonviolent action.” In a powerful reflection of his values, Dr. King donated the entire prize—$54,123—to support the civil rights movement.
While we often remember Dr. King primarily for his work advancing racial justice, his vision for a better America was far broader. He spoke passionately about poverty, health care, economic justice, and women’s rights, always grounding his advocacy in a belief that real change required both moral courage and collective action. His public career lasted just twelve years—from the Montgomery bus boycott in 1956 to the sanitation workers’ strike in Memphis, where he was assassinated in 1968 at the age of 39. And now, his impact continues to shape our nation.
I see Dr. King’s dream of a more just and compassionate world reflected every day in the work of Iowa’s nonprofit organizations. I also see it in the generosity of the donors who support them—people who believe in advancing missions that strengthen communities and expand opportunity. Many Iowans even choose to extend that support beyond their lifetimes by including charitable legacies in their estate plans.
Dr. King’s example resonates because most of us share his desire to make our own corners of the world better places to live, learn, and grow. Perhaps his insistence on “practicing what you preach” has inspired you to give more generously or more intentionally. Maybe his question—“What’s your life’s blueprint?”—has prompted you to consider starting a nonprofit or formalizing the causes you care about most. However his words have moved you, the important thing is turning inspiration into action.
Martin Luther King Jr. Day may offer a day away from work, but its deeper purpose is reflection and service. Honoring Dr. King means committing ourselves to the advancement of our communities. Hold on to this sentiment by volunteering with an organization that speaks to your heart, supporting causes through charitable giving tools like donor-advised funds, or simply identifying the nonprofits you’d like to include as beneficiaries in your will.
Leaving a legacy is one of the most meaningful things we can do. It allows our values, convictions, and influence to live on through the people and organizations we care about. While our lives may not leave a mark on history like Dr. King’s, our individual legacies are no less significant to our families, our communities, and the missions we support.
So I’ll ask the same question Dr. King posed to so many: What will your legacy be?
If you’d like to explore charitable giving or legacy planning, don’t hesitate to contact me for a free consultation. As Dr. King reminded us, “The time is always right to do what is right.”
To revisit Dr. King’s “I Have a Dream” speech, watch the video below:
https://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.png00Lexi Luneckashttps://www.gordonfischerlawfirm.com/wp-content/uploads/2017/05/GFLF-logo-300x141.pngLexi Luneckas2026-01-19 15:16:522026-01-19 15:17:28Honoring Dr. King’s Legacy Through Service, Giving, and Lasting Impact
Setting Pay the Right Way: Why Your Nonprofit Needs a Clear Compensation Policy
January 14, 2026
I. INTRODUCTION
Setting compensation for employees and contractors is a core task for any nonprofit. These decisions affect people, finances, and public trust, which is why they should be guided by a clear and consistent Compensation Policy. Because compensation decisions are closely tied to a nonprofit’s tax-exempt status and governance obligations, they are also subject to regulatory scrutiny. The IRS underscores this importance by addressing compensation and compensation practices in multiple sections of Form 990.
A well-designed Compensation Policy helps organizations approach these decisions deliberately and with appropriate oversight, setting the stage for the standards discussed below.
II. WHY HAVE A COMPENSATION POLICY?
A. Employee Care and Morale
Every organization, regardless of size or success, is built on the individuals who carry out its mission. Fair and competitive compensation plays a critical role in employee satisfaction, retention, and morale. Competitive wages allow a nonprofit to attract qualified candidates and build a team that aligns with the organization’s values and goals.
B. Donor Confidence
Donors care not only about a nonprofit’s mission, but also about how that mission is carried out. Compensation practices are one area where donors may look for signs of ethical management and responsible stewardship of resources. A clear and organized Compensation Policy helps demonstrate that the organization takes its obligations seriously, including in how employees are compensated and supported.
C. Consistency
A written Compensation Policy promotes consistency by establishing guidelines, pay standards, and the use of comparability data. This structure reduces the need for ad hoc decision-making and helps save time and administrative resources. The policy can also serve as a helpful reference when responding to questions from donors, employees, or prospective hires, keeping the nonprofit’s messaging consistent.
D. Budget Targeting
Nonprofits operate within defined budgets, which may include restricted funds such as government or corporate grants. A well-drafted Compensation Policy helps ensure that compensation decisions align with budgetary constraints while still supporting recruitment and retention goals.
E. Legal Compliance and Reduced Risks of Lawsuit
A Compensation Policy also supports compliance with state and federal employment laws and plays a role in maintaining tax-exempt status. IRS Form 990 requests compensation-related information in multiple sections, including Part I, Part VI, Part VII, Part IX, and Schedule J. Without a structured policy, nonprofits may face increased risk of disputes or claims of unfair treatment. Having an attorney assist with drafting and periodically reviewing a Compensation Policy can significantly reduce legal and operational risks.
III. WHAT A COMPENSATION POLICY SHOULD INCLUDE
A. Purpose and Scope
A Compensation Policy, like most policies, should explain its own purpose and scope. It should state which forms of compensation it covers and should declare those forms of compensation to be reasonable, fair, and supported by appropriate data. It should also tie compensation back to the organization’s mission and public-charity status.
B. Assignment of Responsibility
A Compensation Policy should clearly identify who is responsible for reviewing and approving compensation decisions. Many organizations delegate this responsibility to a finance committee or similar body, with ultimate oversight resting with the board of directors.
C. Use of Comparability Data
An equitable Compensation Policy relies on comparability data to establish reasonable compensation levels. Comparability data should include, but not be limited to, the following:
1. Salary and benefit studies from independent sources;
2. Written job offers for similar positions at similar organizations (similar in ways like asset
size, geographic location, mission, staff, and services);
3. Documented discussions with similar nonprofit or for-profit organizations; and
4. Information obtained from IRS Form 990 filings of comparable organizations.
All compensation decisions, including the data relied upon and any deviations from it, should be documented and retained in the organization’s records.
D. Conflicts Of Interest
Any board member or member of a finance or similar committee with the power to make compensation-related decisions should, of course, recuse themselves from doing so when they stand to make a personal benefit, such as deciding their own salary, or the salary of a spouse or close family member. While these situations should be majorly addressed in a separate Conflict of Interest Policy, reiterating this requirement in the Compensation Policy helps avoid even the appearance of impropriety.
E. Documentation and Transparency
All compensation decisions should be documented in a timely and consistent manner. A Compensation Policy should promote this by defining documentation practices and standards. Clear records support accountability and compliance with reporting obligations.
F. Periodic Review
As with other key governance policies, a Compensation Policy should be reviewed and approved initially by the board of directors. However, it’s incredibly important that the board is not only involved in the creation of the policy, but also in the maintenance of it. Because it will undoubtedly need updating at some point, the Compensation Policy should address its own amenability, including the specifics of who and under what circumstances it can be reviewed or updated.
IV. CONCLUSION
Nonprofits of all sizes benefit from a clear, equitable Compensation Policy. It provides guidance for leadership, reassurance for employees, transparency for donors, and support for compliance and reporting obligations.
If you’d like guidance on drafting, updating, or reviewing your Compensation Policy, I’m happy to help. Reach out anytime at gordon@gordonfischerlawfirm.comto start the conversation. I offer a free consultation!
Every nonprofit, every year, must complete and file a version of Form 990, which the IRS calls its “Return of Organization Exempt From Income Tax.” The long version of IRS Form 990 asks about many financial matters, including but not limited to donations, money on hand, non-cash assets, and breakdowns of expenses.
IRS Form 990 goes even further and asks nonprofits if they have in place certain policies. In fact, the IRS asks about ten (10) specific policies on Form 990. The IRS does not mandate adopting these ten (10) policies. The IRS is at the very least signaling what policies nonprofits should have in place. This helps show nonprofits what the IRS considers to be best practices.
II. REASONS AND BENEFITS TO ADOPT THESE TEN (10) POLICIES
One might ask, if these policies are not absolutely required, why should a nonprofit invest the time and effort to adopt them? Without clear and properly enforced governance policies, an Iowa nonprofit may face regulatory scrutiny, potential penalties, and reputational harm that can negatively impact donor confidence and fundraising efforts. Beyond risk management, these ten (10) policies provide substantial and practical benefits for nonprofits, including but not limited to the following:
Enhanced confidence among donors and other stakeholders.
A consistent framework for sound decision making.
Improved compliance with federal and state laws.
Reduced risk to the nonprofit and its management and governing board.
The existence of a policy does not, by itself, guarantee compliance. However, having written policies in place establishes expectations and provides guidance for board members, employees, donors, volunteers, and other stakeholders. When issues arise, these policies serve as a clear reference point for addressing concerns in a consistent and responsible manner. Another important reason to adopt these policies is that the IRS audits tax exempt nonprofits. Having appropriate governance policies in place can benefit a nonprofit during an audit by demonstrating a commitment to transparency, accountability, and compliance. In addition, well drafted policies provide a solid foundation for soliciting, accepting, and managing charitable donations.
Finally, Form 990 is publicly available and often reviewed by major donors, foundations, and other stakeholders. When completed thoughtfully, it can serve as a valuable public relations tool that reflects a nonprofit’s commitment to good governance, financial responsibility, and alignment with its mission.
III. WHAT POLICIES ARE WE TALKING ABOUT?
The IRS revised Form 990 in 2008. The old version focused largely on financial data. Now Form 990 reports extensive information on operations such as board governance, fundraising, non-cash assets, and more. Below are the ten (10) policies in alphabetical order.
COMPENSATION
Competitive and fair compensation is just as important for nonprofit employees as it is for employees in the for profit sector. A well written compensation policy establishes objective salary ranges for positions, incorporates updated job descriptions, and outlines performance management and evaluation standards.
A strong compensation policy should also include a statement of compensation philosophy and strategy, explaining how compensation practices support the nonprofit’s mission and values. By setting clear and consistent guidelines, this policy promotes fairness, transparency, and accountability in how employees and executives are compensated.
Panoramic image, Man hand holding piggy bank on wood table. Save money and financial investment
CONFLICT OF INTEREST
A conflict of interest policy serves two essential purposes. First, it requires board members, officers, and key employees to disclose any actual or potential conflicts. Second, it ensures that individuals with a conflict are excluded from voting on matters in which they have a personal or financial interest.
Form 990 defines a conflict of interest as a situation in which a person in a position of authority can benefit financially from a decision, including indirect benefits to family members or closely associated businesses. A clear and well enforced conflict of interest policy helps protect the nonprofit’s integrity, promotes ethical decision making, and reduces the risk of regulatory and legal sanctions by ensuring that conflicts are properly disclosed, evaluated, and managed in a transparent and ethical manner.
DOCUMENT RETENTION AND DESTRUCTION
A document retention and destruction policy explains what types of records should be retained, how they should be stored, and how long they must be kept. It also outlines appropriate methods for the secure destruction of documents that are no longer required. This policy helps ensure that important financial, employment, contract, and governance records are preserved for legal, tax, and regulatory purposes. In addition to supporting compliance, a clear document retention policy helps nonprofits manage storage efficiently, reduce unnecessary record keeping, and respond appropriately if litigation, audits, or government investigations arise.
FINANCIAL POLICIES AND PROCEDURES
Financial policies and procedures guide how a nonprofit manages its finances on a day to day basis. These policies address budgeting, financial reporting, internal controls, account management, and audit practices. They also establish expectations for transparency, accuracy, and responsible stewardship of nonprofit funds. By providing a consistent framework for financial decision making, these policies help protect the organization’s assets, support regulatory compliance, and promote confidence among donors, board members, and other stakeholders.
FORM 990 REVIEW
Form 990 asks whether a complete copy of the return is provided to all members of the governing body before it is filed. A Form 990 review policy outlines how and when the return is distributed to board members and describes the process used to review the information for accuracy and completeness.
This policy encourages accountability and informed oversight by the board of directors. It also helps ensure that leadership understands the information being reported to the IRS and the public, reducing the risk of errors and misunderstandings.
Form 990 Return of Organization Exempt From Income Tax inscription on the sheet.
FUNDRAISING
Almost every nonprofit engages in some form of charitable fundraising. A fundraising policy addresses compliance with local, state, and federal laws, as well as the ethical standards the nonprofit chooses to follow in its fundraising efforts.
This policy should also clarify appropriate practices for both soliciting and receiving donations. By establishing clear guidelines, a fundraising policy promotes transparency, accountability, and donor confidence while helping the nonprofit conduct its fundraising activities responsibly.
GIFT ACCEPTANCE
While related to the fundraising policy, the gift acceptance policy focuses on how a nonprofit evaluates and manages certain types of donated assets. This policy provides clear guidance for board members and staff when considering proposed non-cash donations, including real estate, equipment, or other complex assets.
A well drafted gift acceptance policy also helps a nonprofit identify and decline gifts that may carry unwanted liabilities, restrictions, or ongoing obligations that the organization is not prepared to manage. This protects the nonprofit from financial, legal, and operational risks associated with unsuitable donations.
INVESTMENT
An investment policy defines who is responsible for making investment decisions and how the nonprofit’s assets will be managed, protected, and grown. It also establishes guidelines for risk management, diversification, and maintaining appropriate access to cash when needed.
By outlining both management authority and board oversight, an investment policy helps ensure that financial resources are used prudently and in furtherance of the nonprofit’s mission. It also promotes long term financial stability and responsible stewardship of charitable assets.
PUBLIC DISCLOSURE
A public disclosure policy explains which nonprofit documents must be made available to the public and which may remain internal. Certain records, such as governing documents, financial statements, and Form 990, are often subject to public inspection.
This policy helps ensure compliance with disclosure requirements while allowing the nonprofit to maintain appropriate confidentiality for sensitive internal information. It also supports transparency and public trust.
WHISTLEBLOWER
A whistleblower policy establishes a process for reporting suspected illegal conduct, financial mismanagement, or violations of nonprofit policies. It also protects individuals who report concerns from retaliation.
By encouraging staff and volunteers to raise issues in good faith, this policy helps nonprofits identify and address problems early, promote ethical behavior, and reduce the risk of legal or regulatory violations.
IV. CONCLUSION
With passion leading the way and strong policies guiding your efforts, your nonprofit can operate more effectively, ethically, and confidently. These ten (10) policies help protect, strengthen, and support your organization’s long term success.
Clear and well drafted governance policies provide a framework for responsible decision making, promote transparency and accountability, and help ensure compliance with federal and state law. They also build trust with donors, volunteers, and the communities your nonprofit serves.
If your organization does not yet have these ten (10) policies in place, or if your current policies need to be updated, I can help. I offer customized drafting of all ten (10) policies for Iowa nonprofits.
To learn more, please contact me at gordon@gordonfischerlawfirm.com.
Honoring Dr. King’s Legacy Through Service, Giving, and Lasting Impact
Charitable GivingJanuary 19, 2026
I believe it’s important to pay tribute to a man who profoundly championed equity, freedom, peace, and justice. Dr. Martin Luther King, Jr. was not only a visionary leader, but also a tireless advocate for nonviolent action and peaceful solutions to deeply rooted human rights issues. His productivity alone is staggering—he reportedly wrote five books and delivered hundreds of speeches in a single year, more than most of us will produce in a lifetime.
Dr. King’s leadership was instrumental in shaping the modern civil rights movement and influencing the passage of the Civil Rights Act of 1964. That same year, he was awarded one of the world’s highest honors, the Nobel Peace Prize, for his “dynamic leadership of the Civil Rights movement and steadfast commitment to achieving racial justice through nonviolent action.” In a powerful reflection of his values, Dr. King donated the entire prize—$54,123—to support the civil rights movement.
While we often remember Dr. King primarily for his work advancing racial justice, his vision for a better America was far broader. He spoke passionately about poverty, health care, economic justice, and women’s rights, always grounding his advocacy in a belief that real change required both moral courage and collective action. His public career lasted just twelve years—from the Montgomery bus boycott in 1956 to the sanitation workers’ strike in Memphis, where he was assassinated in 1968 at the age of 39. And now, his impact continues to shape our nation.
I see Dr. King’s dream of a more just and compassionate world reflected every day in the work of Iowa’s nonprofit organizations. I also see it in the generosity of the donors who support them—people who believe in advancing missions that strengthen communities and expand opportunity. Many Iowans even choose to extend that support beyond their lifetimes by including charitable legacies in their estate plans.
Dr. King’s example resonates because most of us share his desire to make our own corners of the world better places to live, learn, and grow. Perhaps his insistence on “practicing what you preach” has inspired you to give more generously or more intentionally. Maybe his question—“What’s your life’s blueprint?”—has prompted you to consider starting a nonprofit or formalizing the causes you care about most. However his words have moved you, the important thing is turning inspiration into action.
Martin Luther King Jr. Day may offer a day away from work, but its deeper purpose is reflection and service. Honoring Dr. King means committing ourselves to the advancement of our communities. Hold on to this sentiment by volunteering with an organization that speaks to your heart, supporting causes through charitable giving tools like donor-advised funds, or simply identifying the nonprofits you’d like to include as beneficiaries in your will.
Leaving a legacy is one of the most meaningful things we can do. It allows our values, convictions, and influence to live on through the people and organizations we care about. While our lives may not leave a mark on history like Dr. King’s, our individual legacies are no less significant to our families, our communities, and the missions we support.
So I’ll ask the same question Dr. King posed to so many: What will your legacy be?
If you’d like to explore charitable giving or legacy planning, don’t hesitate to contact me for a free consultation. As Dr. King reminded us, “The time is always right to do what is right.”
To revisit Dr. King’s “I Have a Dream” speech, watch the video below:
Why Your Nonprofit Needs a Clear Compensation Policy
NonprofitsSetting Pay the Right Way: Why Your Nonprofit Needs a Clear Compensation Policy
January 14, 2026
I. INTRODUCTION
Setting compensation for employees and contractors is a core task for any nonprofit. These decisions affect people, finances, and public trust, which is why they should be guided by a clear and consistent Compensation Policy. Because compensation decisions are closely tied to a nonprofit’s tax-exempt status and governance obligations, they are also subject to regulatory scrutiny. The IRS underscores this importance by addressing compensation and compensation practices in multiple sections of Form 990.
A well-designed Compensation Policy helps organizations approach these decisions deliberately and with appropriate oversight, setting the stage for the standards discussed below.
II. WHY HAVE A COMPENSATION POLICY?
A. Employee Care and Morale
Every organization, regardless of size or success, is built on the individuals who carry out its mission. Fair and competitive compensation plays a critical role in employee satisfaction, retention, and morale. Competitive wages allow a nonprofit to attract qualified candidates and build a team that aligns with the organization’s values and goals.
B. Donor Confidence
Donors care not only about a nonprofit’s mission, but also about how that mission is carried out. Compensation practices are one area where donors may look for signs of ethical management and responsible stewardship of resources. A clear and organized Compensation Policy helps demonstrate that the organization takes its obligations seriously, including in how employees are compensated and supported.
C. Consistency
A written Compensation Policy promotes consistency by establishing guidelines, pay standards, and the use of comparability data. This structure reduces the need for ad hoc decision-making and helps save time and administrative resources. The policy can also serve as a helpful reference when responding to questions from donors, employees, or prospective hires, keeping the nonprofit’s messaging consistent.
D. Budget Targeting
Nonprofits operate within defined budgets, which may include restricted funds such as government or corporate grants. A well-drafted Compensation Policy helps ensure that compensation decisions align with budgetary constraints while still supporting recruitment and retention goals.
E. Legal Compliance and Reduced Risks of Lawsuit
A Compensation Policy also supports compliance with state and federal employment laws and plays a role in maintaining tax-exempt status. IRS Form 990 requests compensation-related information in multiple sections, including Part I, Part VI, Part VII, Part IX, and Schedule J. Without a structured policy, nonprofits may face increased risk of disputes or claims of unfair treatment. Having an attorney assist with drafting and periodically reviewing a Compensation Policy can significantly reduce legal and operational risks.
III. WHAT A COMPENSATION POLICY SHOULD INCLUDE
A. Purpose and Scope
A Compensation Policy, like most policies, should explain its own purpose and scope. It should state which forms of compensation it covers and should declare those forms of compensation to be reasonable, fair, and supported by appropriate data. It should also tie compensation back to the organization’s mission and public-charity status.
B. Assignment of Responsibility
A Compensation Policy should clearly identify who is responsible for reviewing and approving compensation decisions. Many organizations delegate this responsibility to a finance committee or similar body, with ultimate oversight resting with the board of directors.
C. Use of Comparability Data
An equitable Compensation Policy relies on comparability data to establish reasonable compensation levels. Comparability data should include, but not be limited to, the following:
1. Salary and benefit studies from independent sources;
2. Written job offers for similar positions at similar organizations (similar in ways like asset
size, geographic location, mission, staff, and services);
3. Documented discussions with similar nonprofit or for-profit organizations; and
4. Information obtained from IRS Form 990 filings of comparable organizations.
All compensation decisions, including the data relied upon and any deviations from it, should be documented and retained in the organization’s records.
D. Conflicts Of Interest
Any board member or member of a finance or similar committee with the power to make compensation-related decisions should, of course, recuse themselves from doing so when they stand to make a personal benefit, such as deciding their own salary, or the salary of a spouse or close family member. While these situations should be majorly addressed in a separate Conflict of Interest Policy, reiterating this requirement in the Compensation Policy helps avoid even the appearance of impropriety.
E. Documentation and Transparency
All compensation decisions should be documented in a timely and consistent manner. A Compensation Policy should promote this by defining documentation practices and standards. Clear records support accountability and compliance with reporting obligations.
F. Periodic Review
As with other key governance policies, a Compensation Policy should be reviewed and approved initially by the board of directors. However, it’s incredibly important that the board is not only involved in the creation of the policy, but also in the maintenance of it. Because it will undoubtedly need updating at some point, the Compensation Policy should address its own amenability, including the specifics of who and under what circumstances it can be reviewed or updated.
IV. CONCLUSION
Nonprofits of all sizes benefit from a clear, equitable Compensation Policy. It provides guidance for leadership, reassurance for employees, transparency for donors, and support for compliance and reporting obligations.
If you’d like guidance on drafting, updating, or reviewing your Compensation Policy, I’m happy to help. Reach out anytime at gordon@gordonfischerlawfirm.com to start the conversation. I offer a free consultation!
Your Iowa Nonprofit Needs These 10 Policies
NonprofitsJanuary 12, 2026
10 Policies Every Nonprofit Should Have in Place
I. IRS FORM 990
Every nonprofit, every year, must complete and file a version of Form 990, which the IRS calls its “Return of Organization Exempt From Income Tax.” The long version of IRS Form 990 asks about many financial matters, including but not limited to donations, money on hand, non-cash assets, and breakdowns of expenses.
IRS Form 990 goes even further and asks nonprofits if they have in place certain policies. In fact, the IRS asks about ten (10) specific policies on Form 990. The IRS does not mandate adopting these ten (10) policies. The IRS is at the very least signaling what policies nonprofits should have in place. This helps show nonprofits what the IRS considers to be best practices.
II. REASONS AND BENEFITS TO ADOPT THESE TEN (10) POLICIES
One might ask, if these policies are not absolutely required, why should a nonprofit invest the time and effort to adopt them? Without clear and properly enforced governance policies, an Iowa nonprofit may face regulatory scrutiny, potential penalties, and reputational harm that can negatively impact donor confidence and fundraising efforts. Beyond risk management, these ten (10) policies provide substantial and practical benefits for nonprofits, including but not limited to the following:
The existence of a policy does not, by itself, guarantee compliance. However, having written policies in place establishes expectations and provides guidance for board members, employees, donors, volunteers, and other stakeholders. When issues arise, these policies serve as a clear reference point for addressing concerns in a consistent and responsible manner. Another important reason to adopt these policies is that the IRS audits tax exempt nonprofits. Having appropriate governance policies in place can benefit a nonprofit during an audit by demonstrating a commitment to transparency, accountability, and compliance. In addition, well drafted policies provide a solid foundation for soliciting, accepting, and managing charitable donations.
Finally, Form 990 is publicly available and often reviewed by major donors, foundations, and other stakeholders. When completed thoughtfully, it can serve as a valuable public relations tool that reflects a nonprofit’s commitment to good governance, financial responsibility, and alignment with its mission.
III. WHAT POLICIES ARE WE TALKING ABOUT?
The IRS revised Form 990 in 2008. The old version focused largely on financial data. Now Form 990 reports extensive information on operations such as board governance, fundraising, non-cash assets, and more. Below are the ten (10) policies in alphabetical order.
Competitive and fair compensation is just as important for nonprofit employees as it is for employees in the for profit sector. A well written compensation policy establishes objective salary ranges for positions, incorporates updated job descriptions, and outlines performance management and evaluation standards.
A strong compensation policy should also include a statement of compensation philosophy and strategy, explaining how compensation practices support the nonprofit’s mission and values. By setting clear and consistent guidelines, this policy promotes fairness, transparency, and accountability in how employees and executives are compensated.
Panoramic image, Man hand holding piggy bank on wood table. Save money and financial investment
A conflict of interest policy serves two essential purposes. First, it requires board members, officers, and key employees to disclose any actual or potential conflicts. Second, it ensures that individuals with a conflict are excluded from voting on matters in which they have a personal or financial interest.
Form 990 defines a conflict of interest as a situation in which a person in a position of authority can benefit financially from a decision, including indirect benefits to family members or closely associated businesses. A clear and well enforced conflict of interest policy helps protect the nonprofit’s integrity, promotes ethical decision making, and reduces the risk of regulatory and legal sanctions by ensuring that conflicts are properly disclosed, evaluated, and managed in a transparent and ethical manner.
A document retention and destruction policy explains what types of records should be retained, how they should be stored, and how long they must be kept. It also outlines appropriate methods for the secure destruction of documents that are no longer required. This policy helps ensure that important financial, employment, contract, and governance records are preserved for legal, tax, and regulatory purposes. In addition to supporting compliance, a clear document retention policy helps nonprofits manage storage efficiently, reduce unnecessary record keeping, and respond appropriately if litigation, audits, or government investigations arise.
Financial policies and procedures guide how a nonprofit manages its finances on a day to day basis. These policies address budgeting, financial reporting, internal controls, account management, and audit practices. They also establish expectations for transparency, accuracy, and responsible stewardship of nonprofit funds. By providing a consistent framework for financial decision making, these policies help protect the organization’s assets, support regulatory compliance, and promote confidence among donors, board members, and other stakeholders.
Form 990 asks whether a complete copy of the return is provided to all members of the governing body before it is filed. A Form 990 review policy outlines how and when the return is distributed to board members and describes the process used to review the information for accuracy and completeness.
This policy encourages accountability and informed oversight by the board of directors. It also helps ensure that leadership understands the information being reported to the IRS and the public, reducing the risk of errors and misunderstandings.
Form 990 Return of Organization Exempt From Income Tax inscription on the sheet.
Almost every nonprofit engages in some form of charitable fundraising. A fundraising policy addresses compliance with local, state, and federal laws, as well as the ethical standards the nonprofit chooses to follow in its fundraising efforts.
This policy should also clarify appropriate practices for both soliciting and receiving donations. By establishing clear guidelines, a fundraising policy promotes transparency, accountability, and donor confidence while helping the nonprofit conduct its fundraising activities responsibly.
While related to the fundraising policy, the gift acceptance policy focuses on how a nonprofit evaluates and manages certain types of donated assets. This policy provides clear guidance for board members and staff when considering proposed non-cash donations, including real estate, equipment, or other complex assets.
A well drafted gift acceptance policy also helps a nonprofit identify and decline gifts that may carry unwanted liabilities, restrictions, or ongoing obligations that the organization is not prepared to manage. This protects the nonprofit from financial, legal, and operational risks associated with unsuitable donations.
An investment policy defines who is responsible for making investment decisions and how the nonprofit’s assets will be managed, protected, and grown. It also establishes guidelines for risk management, diversification, and maintaining appropriate access to cash when needed.
By outlining both management authority and board oversight, an investment policy helps ensure that financial resources are used prudently and in furtherance of the nonprofit’s mission. It also promotes long term financial stability and responsible stewardship of charitable assets.
A public disclosure policy explains which nonprofit documents must be made available to the public and which may remain internal. Certain records, such as governing documents, financial statements, and Form 990, are often subject to public inspection.
This policy helps ensure compliance with disclosure requirements while allowing the nonprofit to maintain appropriate confidentiality for sensitive internal information. It also supports transparency and public trust.
WHISTLEBLOWER
A whistleblower policy establishes a process for reporting suspected illegal conduct, financial mismanagement, or violations of nonprofit policies. It also protects individuals who report concerns from retaliation.
By encouraging staff and volunteers to raise issues in good faith, this policy helps nonprofits identify and address problems early, promote ethical behavior, and reduce the risk of legal or regulatory violations.
IV. CONCLUSION
With passion leading the way and strong policies guiding your efforts, your nonprofit can operate more effectively, ethically, and confidently. These ten (10) policies help protect, strengthen, and support your organization’s long term success.
Clear and well drafted governance policies provide a framework for responsible decision making, promote transparency and accountability, and help ensure compliance with federal and state law. They also build trust with donors, volunteers, and the communities your nonprofit serves.
If your organization does not yet have these ten (10) policies in place, or if your current policies need to be updated, I can help. I offer customized drafting of all ten (10) policies for Iowa nonprofits.
To learn more, please contact me at gordon@gordonfischerlawfirm.com.