THE IMPORTANCE OF POLICIES AND PROCEDURES ROBERT L. SOZA, JR.

Overview Board of Directors Duties of Board of Directors Duties of Officers Legal Protections from Liability Strategic Board Members Policies and Procedures

Board of Directors Duty of Loyalty to the organization’s mission Look to the Articles of Incorporation and IRS Form 990 for the mission Duty of Supervision Should be explicitly set forth in By- Laws

Limits on non-profit liability Many states have adopted a limitation on liability for charitable organizations Require that the Board exercise Business Judgment Many require the organization obtain liability insurance

Directors and Officers Liability State law requirements Organizing documents must provide for indemnification of directors, officers, employees

development Fundraising committee Private foundations must distribute 5% of its assets by making “Qualifying Distributions” annually Includes grants to other non-profits Include foundation deadlines in your fundraising calendar

Policies and Procedures Reimbursement of Expenses Conflict of Interest Setting salary for ED and others Whistleblower Protection Policies and Procedures Nondiscrimination and Sexual Harassment Intellectual Property Document Retention Social Media

Conflict of interest policy

Whistleblower protection Must have a procedure to allow for complaints to be raised about any concern regarding the organization If the operation is sizeable, anonymous hot line should be considered If concern is serious, it must be addressed by the Board, and if it involves a Board member, that member cannot attend final deliberations and vote

Many refer to these as document destruction policies DOCUMENT RETENTION Many refer to these as document destruction policies SOL for tax purposes is 3 years, unless certain exceptions apply Employment tax records may be destroyed after 4 years Audit the recordkeeping on a regular basis: -Are the financial records kept in a manner that demonstrates compliance with the organization’s policies & procedures? -Board meeting minutes are essential to prove that the Board

ON POLICIES AND PROCEDURES TRAINING Look to current developments in the law and in practice Must be done annually Provide a certification of attendance and acknowledgement of understanding ON POLICIES AND PROCEDURES

Revise policies and procedures regularly