IRS recommends governance policies
Sound nonprofit governance, while not dictated by federal tax law, is important to the successful operation of tax-exempt groups, the IRS says in an article posted on its website.
To encourage such internal oversight, the IRS “commends” a series of policies and practices, which it says are directed to public charities, but also can be beneficial to private foundations and other exempt groups.
The article covers a number of topics, including a nonprofit’s mission, governing body, governance and management policies, financial statements and 990 reporting, and transparency and accountability.
There are several specific areas for which the IRS recommends adoption of formal policies, says the Nonprofit Risk Management Center in its March 19 newsletter.
Those include policies on executive compensation, conflicts of interest, investments, fundraising, how governance decisions are documented, the retention destruction of documents and processes for handling claims by whistleblowers.