As a nonprofit auditor, I frequently meet with boards of directors that are struggling to properly govern while remaining ministry focused. I always advise implementation of these 5 essential practices.
- Make sure you have the basics covered. Every nonprofit, regardless of size, should have these basic written policies. All of these policies should be reviewed and updated annually and effectively communicated to board members and employees. Click on the links below for some of my favorite resources, samples and templates.
- Retain a schedule of required board meetings and maintain minutes for each meeting. Every ministry is required to have at least one board meeting annually.
- Annually approve executive compensation and benefits and make sure they meet the criteria for reasonable compensation set forth by the IRS?
- Review your 990 in detail with your board of directors. Your 990 is available for all to see and provides a unique opportunity to show your donors how you are meeting your stewardship responsibility.
- Have your financial statements prepared, compiled, reviewed or audited by a CPA, either in-house or by a third party. With the new SSARS 21, CPAs have more flexibility in providing “prepared” financial statements at a reduced cost.
M.E. Sullivan is a cloud based professional services provider specializing in cloud accounting.