General policy handbook nonprofit organization

These three steps are taken from the regulations that provide c 3 public charities and c 4 organizations with a rebuttable presumption that compensation paid to an insider is reasonable or that amounts paid to purchase property from an insider does not exceed market value, but the Form asks the question about the procedure of every organization filing the Form The regulations that contain the rebuttable presumption procedure are part of the excess benefit rules that apply to insiders of c 3 public charities and c 4 organizations.

Under these rules, if the organization overpays an insider, the insider must repay the overpayment to the organization and pay an excise tax to the IRS equal to 25 percent of the overpayment. The severity of the overpayment taxes makes the rebuttable presumption very useful. Economic benefits provided to an insider but not treated as compensation think spousal travel are automatic excess benefits to the insider of a c 3 public charity or a c 4 organization.

Of course, such benefits provided to the insider of a c 3 private foundation but not treated as compensation are private inurement, and could cause the foundation to lose its exempt status.

Nonprofit organizations need to pay attention to all elements of compensation, be sure to treat them as compensation and be sure that the total compensation paid does not exceed what is reasonable. The procedures outlined in the rebuttable presumption regulations are very helpful, even for nonprofits not subject to the excess benefits rules of which the regulations are a part.

For several years Senator Grassley and others have been questioning whether nonprofit hospitals provide sufficient charity care to justify their tax exemptions.

News reports of nonprofit hospitals using commercial collections procedures have also generated questions. Perhaps as a result of the inquiries, the revised Form in the Schedule H which will be completed by c 3 hospitals beginning next year asks hospitals to quantify the amount of charity care they provide.

Senator Grassley, mostly prior to the recent decline in the value of endowments, has also questioned whether the educational institutions with the largest endowments are providing sufficient charity care.

Many states have begun to look at the value of real estate and sales tax exemptions and some have made a specific level of charity care a requirement for state and local tax exemption. These discussions have prompted many nonprofit organizations that charge fees to think about the level of charity care they provide and to begin to document it. Even if the organization is not required to provide a stated level of charity care and does not wish to have a policy of providing a stated level of care, the board should know how it measures against norms being used by or applied to other organizations.

A discussion at the board level about how collections will be handled is also appropriate. SIX: Spending policy. Private foundations are required to spend annually for charitable purposes an amount equal to 5 percent of the value of their net investment assets. They may choose to spend more, for example, in times when the value of assets has fallen.

Changes in the state laws governing true endowments funds restricted by the donor to the expenditure of income only , permit flexibility in the definition of income. The existence of the policy and procedures for its review provide the board or investment committee the opportunity for addressing how assets are invested and for thinking about what allocations should serve the organization best.

Even a simple gift acceptance policy can provide guidance for a development officer or board member when a gift prospect offers to gift an interest in a partnership or limited liability company. Jump to navigation. The handbook is designed for daily use as a guide for nonprofit leaders and managers who are seeking to implement those plans and policies required to bring about the excellence or quality transformation within their organization and to develop their own policy and practices manual, to draft policy statements, update management procedures, and establish more effective management systems.

Drafts of policies, procedures and statements specifically for nonprofits. Management, quality and continuous improvement practices. Established models for use by staff and volunteer managers. Accepted techniques explained and illustrated.

Sample plans, forms, records, and reports specifically for nonprofits. Implementing total quality management: a proven strategy by Joseph R. Building a total quality culture by Joseph E. Champoux and Lenore B. Problem solving with information and analysis by Gay Lumsden and Donald Lumsden. Leadership, values and the nonprofit organization by Elizabeth Power. Empowerment and teamwork in the quality organization by Denise Gallaro, Michael E.

Knight, Gay Lumsden and Donald Lumsden. Strategic planning and management by objectives by D. Kerry Laycock. The board of directors by Barbara A. The total quality approach to staff development and training by Larry J. Volunteer development: individual and organizational considerations by Janet L. Managing today's volunteers in the training process by Pamela G.

Designing effective personnel policies by Diane M. Performance evaluation by Mark D. Employment-related benefits by Diane M.

Compensation management by Mark D. Fund-raising overview by James M. Direct Mail fund-raising by Constance Clark. Membership development by Constance Clark. Annual giving programs by Nan D. Many policies can be somewhat generic, so you many need additional policies for issues unique to your organization. All important policies should be reviewed by legal counsel before putting them in place.

Otherwise, you may be opening yourself as well as your organization and board of directors to potential liabilities. Guidelines and Template for a Nonprofit Board. Download this E-Book from DonorPerfect to learn how you can fundraise smarter, easier, and make more money for your cause by using tools that are tailored to help your organization succeed.

Please consult with your legal or tax advisor to supplement and verify what you learn here.