Governance Policies

Every nonprofit is different, but all will want to be able to answer “Yes” to the following questions about governance that are included in the IRS Form 990 (see Part VI, and Schedule M).

Checklist for Basic Governance Practices described by the IRS Form 990:

1. Do you maintain minutes of all board meetings, and committee meetings for committees that are authorized to act on behalf of the board (such as an executive committee) (Part VI, Section A, line 8)
2. Do you provide a copy of the Form 990 to the board before it is filed? (Part VI, Section B, line 11)
3. Have you adopted a written conflict of interest policy? (Part VI, Section B, Line 12)
4. Have you adopted a process for board members to disclose conflicts of interests annually and do you document in minutes of board meetings when the policy is invoked so that the nonprofit can demonstrate that compliance with the policy is regularly and consistently monitored and enforced?
5. Have you adopted a written whistleblower protection policy? (Part VI, Section B, line 13)
6. Have you adopted a written document retention/destruction policy? (Part VI, Section B, line 14)
7. Have you adopted a policy for the board’s review of the executive director/CEO’s compensation and benefits? (Part VI, Section B, line 15)
8. Have you adopted a written gift acceptance policy to govern the receipt of "non-cash" gifts, such as gifts-in-kind, and unusual gifts (land, vehicles, artwork etc.)?
9. If the organization has participated in a joint venture, have you adopted a policy so that the organization will review its participation in partnerships and joint ventures in order to avoid any prohibited private benefit? (Part VI, Section B, line 16)

Need guidance on the governance practices referred to in this checklist and on the IRS Form 990? The National Council has prepared resources to help nonprofits develop governance policies referred to in Section VI, Parts A and B of the Form 990:

Resources to help your nonprofit with these policies: 

• Conflict of Interest
• Whistleblower Protection Policies
• Document Retention and Destruction Policies
• Board’s Review of Compensation Policy 
• Gift Acceptance Policies
• Joint Venture and Partnership Policies

Transparency, specifically about governance policies, encourages the public to trust a nonprofit. Kudos to the Montana Nonprofit Association, which has a link directly from its website to all of its key governance policies.

Tips and Tools

• IRS guidance (6/2011) on the governance questions in Part VI, Form 990
• Electronic Filing Tool: Organizations with gross revenue under $100,000 may file their IRS Form 990 electronically at no charge through the Urban Institute’s eFile program. 
• Learn the significant changes to the revised Form 990 and listen to a recording from a National Council webinar, March 23, 2010, featuring an IRS tax specialist describing ‘lessons learned’ and highlighting new questions on the redesigned Form 990.

Have a question? Review the instructions to the Form 990.