💡 Why Financial Policies Matter
Think of financial policies as your nonprofit’s backbone—keeping things upright, protected, and moving forward. They fight fraud, boost transparency, and keep your mission off the “oops” list!
📚 What Are Financial Policies & Procedures?
Policies: What to do (rules for budgeting, spending, and more)
Procedures: How to do it (step-by-step guides; no guesswork!)
Together, they’re the playbook that keeps your books, board, and staff in sync.
🚀 Why Bother? (Hint: More Than Auditors)
Builds donor & board trust
Improves accountability
Reduces fraud risk
Makes audits & reporting a breeze
Sets the stage for bold (and well-managed) growth
🏆 Must-Have Nonprofit Financial Policies
Budgeting: How you plan, approve, and track funds
Internal Controls: Double-checks and balances (think: two signatures on checks ✍️✍️)
Gift Acceptance: What you can—and can’t—accept
Expense Reimbursement: What’s reimbursable and how to submit
Reserve/Cash Flow: Your rainy day plans
Conflict of Interest: Keeping decisions clean and clear
Procurement: Fair vendor selection and contracting
🔎 Essential Procedures to Support Them
Approving invoices
Reconciling bank accounts
Running payroll
Tracking grants
Handling petty cash
Crystal-clear procedures ensure everyone is on the same page (not the memory game).
✂️ Quick Guide to Creating (or Updating)
Start with reputable templates
Customize for your unique needs
Get board approval & review yearly
Train your team—because policies don’t work closed in a binder
Keep it simple and readable
🚩 Common Pitfalls
- No written policies
- Set ‘em and forget ‘em
- Leaving out the board or finance team
- Too much legalese
- Inconsistent enforcement
🎯 Bottom Line
Financial policies aren’t glamorous—but they’re essential for a healthy, thriving nonprofit. Get them in place, keep them fresh, and watch your organization run smoother (and way less stressfully).
