Best Practices Checklist: How Does Your Nonprofit Measure Up?
Adapted from Is Your Non-Profit Well Run? by Thomas M. Wells, Esq.
Whatever the size of your 501(c)(3) nonprofit organization — be it a large community service provider or a small private foundation — there are certain best practices that all well-run nonprofits should strive to follow.
Read through the checklist below to see how closely your organization adheres to these standards. If it falls short on any of them, then it may be time for some organizational soul searching.
Legalities
Let’s start with the basics:
·Assuming your IRS credentials and requirements are in order — i.e., you have been granted 501(c)(3) status and are filing annual Form 990s —are you legally incorporated as well?
Do you have governing documents in place, including a certification and bylaws?
Most importantly, do you have a strong and clear sense of your organization’s mission or purpose, along with a written statement thereof?
Board of Directors
An organization is only as good as the people who comprise it.
Is there an active Board of Directors made up of appropriately qualified individuals who meet as often as needed?
Are meeting minutes kept, and is there a system of ongoing communication?
Does the Board reevaluate itself periodically and ensure that the organization does likewise?
External Communications
Nowadays, everybody from Apple Inc. to your 12-year-old neighbor, Zak the Tik-Tok influencer, knows that it’s all about branding. At a bare minimum, your nonprofit organization needs:
A professionally designed logo
Brand guidelines/overview – i.e., set colors, fonts, and verbiage to be used in external communications and marketing
A website and social media presence, including a Facebook Business page plus Twitter and LinkedIn accounts (bonus points if you’re on Instagram, too)
An elevator pitch – a synopsis of your nonprofit’s purpose and accomplishments that’s concise enough to be delivered during an elevator ride (shoot for 30-60 seconds in length; make it persuasive and compelling)
Evaluation & Planning
Speaking of your organization’s purpose, is it reviewed from time to time?
Do you have a way to evaluate and measure the impact of your programs?
Does your organization do strategic planning, both short term and long range?
Do you solicit feedback from all of your stakeholders and constituencies?
Policies
Is there a written code of ethics, including a conflict of interest policy?
Are Board members asked to acknowledge these policies each year?
Do you seek out and utilize professional legal and accounting help as necessary?
Human Resources
It bears repeating: An organization is only as good as its people.
Have you created job descriptions for all key staff and volunteers?
Is there an organizational chart?
Do you evaluate job performance at least annually?
Is there a training program, especially for volunteers?
Financial Management
Many a well-intentioned nonprofit organization falters when it comes to financial rigor.
Do you make a budget, then regularly review and approve it?
Do you keep a sharp eye on cash flow?
Are there formal written policies governing financial management, including appropriate internal controls and audit procedures?
If there is an endowment, is it properly protected, managed, and invested?
Are the organization’s expenses reasonable and legitimate?
Do you have a risk management plan, plus insurance if necessary?
Accountability
Is your nonprofit organization transparent in all aspects, to all constituencies?
When commitments are made — monetary and/or otherwise — are they honored in full?
If you can honestly say that your nonprofit checks all of these boxes, then congratulations, and kudos to you and your organization. You’re probably in good shape!
But if anything on this list raises cause for concern, or you just don’t have answers to some of these questions, then it’s time to review, regroup, and revamp accordingly.
For a complete checklist of 50 legal best practices for nonprofit organizations, read Is Your Non-Profit Well Run? by Thomas M. Wells, Esq.