Nonprofit organizations grow and succeed not only with the support of the community and grant funding, but also with the continuous implementation of good management practices. We compiled a few recommendations of best principles and practices for nonprofit management.
– Independent Board.
It is very important to have like-minded, knowledgeable, and resourceful individuals to serve on the board of directors. It is beneficial when board members have some experience in both business and nonprofit management, which can significantly help your organization steer towards achieving its goals. It is recommended that board members are unrelated to each other through family or business.
– No Inurement.
Avoid situations of benefitting the organization’s insiders (directors, officers, or members). A typical example of private inurement would be paying for the insider’s personal (not related to the organization’s activities) expenses. This conduct may result in monetary penalties from the IRS and possible 501c3 status revocation.
– Organized Staff.
Whether you are dealing with paid personnel or volunteers, you are responsible for their oversight. Nonprofits should follow all legal employment requirements and provide a safe work space. It is also advised to implement specific and clear policies for the staff to follow to help the organization achieve its mission.
– Transparent Financial Records.
Throughout the year, nonprofits should keep a good track of their revenues and expenses. If this is properly exercised, preparation and filing an annual return 990 will be a less intimidating task. Charities are required to file a return with the IRS for each year of their existence. Filing a 990 in a timely manner not only keeps a nonprofit in compliance with the IRS, but also benefits its donors by showing them financial transparency. Current and potential donors will be able to see the program accomplishments, board of directors’ information, and how the organization distributed its funding.
– Strategic Planning of Effective Programs.
Each nonprofit should develop a solid plan on how to advance its mission. It can be a short term or a long term plan. For example, a short term plan can be to feed the homeless every Sunday. A long term plan can be opening a homeless shelter and resource center. While planning, you have to account for available finances, staff, location, etc.
– Use of Technology and Information Systems.
Nowadays, nonprofits are using a wide variety of technology and information systems that help them stay efficient, cost effective, accurate, and compliant. Social media help them stay in touch with current donors and gain new contributors, and various software assist them with bookkeeping, staff management, grants tracking, etc. Using proper technology will enable nonprofits to grow and evolve.