Many of the governance items in this section will require board involvement. Therefore, a board should have a sufficient understanding of this section. The IRS Code does not require these governance provisions, but the public viewing your Form 990 will certainly look at your responses. Your board should determine which governance and management items are most applicable to your organization. We suggest outlining a priority list and working on implementing as many of the provisions as make sense for your organization.
Some items to pay particular attention to:
- Governing body review of Form 990 (The IRS suggests board review before it is filed. This may not make sense for some organizations. Your SS&G representative can assist you in determining the best approach.) The organization cannot respond yes to this question unless a full copy of the Form 990, with no redactions, is provided to the full board before filing.
- Conflict of Interest policy. (Currently a standard of the industry. If your organization does not have one in place, we suggest you implement one. This also includes an annual disclosure of potential conflicts and a procedure for enforcement of the policy.)
- Whistleblower policy
- Document retention policy
- Process for determining compensation
You are only permitted to respond “yes” to a policy if the board or a committee delegated authority by the board has adopted the policy by the end of the tax year.
Should you need additional explanation for any of these items, we encourage you to contact your SS&G representative or Annette Hoelzer, nonprofit tax director.