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Tailoring Success: The Vital Role of Customized Policies and Procedures for Nonprofits

In the age of the internet, it is easy to become accustomed to the ease of instantly available and relevant information.

It only takes internet access and a few minutes of time to arm yourself with a library of resources that would rival Alexandria’s. While this access to information has leveled the playing field for many, allowing for organizations of all sizes to access the same high-quality material, it is important to recognize that there are limits to the usefulness of free, widely available, and often overly generalized resources on the internet.


Not All Templates Are Created Equal

While there are certainly templates available on reputable websites that can add value to your nonprofit, such as this example conflict of interest policy on the IRS website, it is important to be aware of the risks associated with using generic, stock templates for core policy documents such as your Policies and Procedures Manual.

According to the National Center on Charitable Statistics, about 30% of nonprofits cease to exist after ten years, likely due to dysfunctional governance that is not strategically leading the nonprofit and effectively building financial strength. To keep tax-exempt status and protect an organization’s reputation, effective and engaged nonprofit governance is crucial. Members of the board need to understand their legal duties and liability for their speech, actions, or inactions.

Your nonprofit organization’s policies and procedures are a key component of clearly communicating and documenting your expectations for both board and staff members. While a quick Google search will reveal a variety of paid and free policies and procedures templates available online, it is important to recognize that using a generic template without customization leaves your organization open to risk.

Ideally, a Policies and Procedures template would be analyzed and customized according to the size, mission, and activities of your organization. Customized policies and procedures accurately reflect the specific needs of the organization by providing relevant, clear, and concise information to stakeholders. A well-executed policies and procedures manual also demonstrates strong and effective governance enhancing your nonprofit’s credibility and reputation.

Effective and up-to-date policies and procedures are customized to address the precise laws, regulations, and reporting requirements applicable. They also reflect the nature of operations and culture to support the organization’s values, decision-making processes, and workflows. Additionally, board members, staff, and volunteers that are involved in monitoring and updating policies and procedures are more likely to adhere to and offer ongoing updates to changes in technology, regulations, or best practices.


Risk Vs Reward

However, time and resource constraints mean this customization doesn’t always happen, resulting in policies and procedures that are complex, irrelevant, or not implemented. While the benefits of a cheap and easy document may seem like a good idea at first, generic policies and procedures that are adopted by nonprofits can be a source of risk.

For example, one-size-fits-all policies and procedures tend to leave out legal and regulatory requirements that are relevant to specific jurisdictions and activities which could leave your organization open to potential fines and legal issues. Similarly, many grants require specific policies and procedures to be in writing, leading to potential noncompliance issues.

Additionally, your policies and procedures document should reflect the actual operations of your organization. Many nonprofits adopt templates that contradict their actual practices. Having procedures that don’t align with your true operations can create inefficiencies, errors, and staff confusion.  Further, even organizations that do not adopt conflicting policies may still face communication issues because of nonspecific procedures. Different departments, teams, or individuals may interpret generic information in different ways, leaving your organization susceptible to miscommunication and staff dissatisfaction.

There are a variety of other ways in which a generic manual may leave you open to risk, but the good news is that there is always a better option!


Customized policies and procedures provide a safeguard for your organization.

As trusted advisors, our aim is to encourage and support our nonprofit clients. Creating meaningful policies and procedures that are utilized requires a thoughtful and customized approach. As such, if your organization is looking for guidance on establishing and implementing various policies or procedures, please consider reaching out to our Nonprofit Advisory Services professionals. Our team is well-versed in the nuances of creating policies and procedures for a variety of organizations. We will be able to help you build a manual that echoes the goals, culture, and mission of your specific nonprofit organization.

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