Written Policies Required For Nonprofits

New questions are appearing this year on the annual reporting form to the Internal Revenue Service, Form 990 (Return of Organization Exempt From Income Tax). For the first time, the IRS is asking that each tax-exempt organization disclose whether or not that organization has each of the following

(a) Written Conflict of Interest Policy
(b) Written Whistleblower Policy
(c) Written Document Retention and Destruction Policy
(d) Written Compensation Determination & Substantiation Policy
(e) Written Joint-Venture Policy
(f) Written Gift Acceptance Policy

While organizations are not required to have any of these policies in written form, it is prudent business practice to have them, and the fact that the IRS is asking for copies further confirms a trend for the government to ensure that these policies are in place.

Many newer organizations already have a written conflict of interest policy in place since the IRS requests a copy of that with the application for recognition of tax exemption. The other policies, though, may not be. We recommend that even though not required, each organization should consider putting these policies in place.

Golan & Christie assists nonprofit corporations with their operations and also has many clients who serve as directors on a number of nonprofit Boards. We are happy to assist your organization in formulating policies specific to your operations. Please contact Donna F. Hartl, 31 2-696-2035, or dfhartl@golanchristie.com for further assistance.