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HR Policies for Nonprofits

hr policies for nonprofits

HR functions in nonprofits often differ significantly from their counterparts across industries, with specific challenges specific to these organizations posed by human resource policies that improve productivity while keeping staff and volunteers focused on fulfilling the organization’s mission.

Implementing an effective policy system helps nonprofits with limited budgets comply with workplace regulations, an especially vital consideration.


An effective policy system is the cornerstone of a healthy nonprofit. This is especially true when it comes to payroll, where accurate, timely information is vitally important for both employees and volunteers. Policies outlining how your organization will organize and digitize documents like grants, volunteer applications and lease agreements also play a vital role in keeping records safely. Likewise, policies outlining how data destruction occurs help your organization adhere to any legal requirements regarding document destruction.

Promotion and compensation HR policies offer nonprofits a simple yet fair system for determining salaries, wages and benefits for their employees. This ensures a diverse and inclusive workplace that stays within tax-exempt guidelines while still managing to attract top talent despite limited resources; strong HR policies help your nonprofit create a positive work culture that attracts top performers while making it easier for your team to meet organizational objectives.

As part of best practice for nonprofit HR policies, it’s recommended to post them online so prospective applicants can easily review them. You should also require all new hires to sign an acknowledgement that they received a copy of your organization’s policies – this can protect the organization in case an employee claims they weren’t aware of the rules.

Promotions and Compensation

Nonprofits have more freedom in setting their salary policies, but must still comply with federal and state wage laws to safeguard employees and remain compliant. This may involve minimum wage requirements, insurance regulations and overtime compensation guidelines.

Nonprofits who fail to abide by IRS guidelines could face penalties from them and run out of funds for programming. To safeguard themselves from this scenario, implementing an effective promotion and compensation policy for nonprofits is key.

Review your salary policy annually as this can ensure your nonprofit stays abreast of industry trends and best practices, and ensures its salary offerings remain comparable with similar organizations.

Establishing an effective promotion and compensation policy can also serve as an effective recruitment strategy for nonprofits. Prospective employees will be drawn to salary packages that align with what other nonprofits are offering in their job postings. Recognizing your staff’s hard work goes beyond offering competitive wages; bonuses for performance or career development can help. Another incentive could include providing flexible working hours. Finally, many nonprofits are now following in the footsteps of for-profit businesses by offering variable payments such as stock options or bonus checks to top performers in their teams. Such rewards can keep employees happy and productive while pushing your organization closer towards its mission goals.

Employee Manuals

An organization’s human resources policies should be clear and consistent to help staff better understand expectations, promote an equitable and productive work environment, and support an equitable work culture. Nonprofit HR departments must take into account an organization’s mission and values when setting human resources policies to allow employees to better support the mission while increasing employee engagement while building a cohesive culture within their workplace.

Nonprofit organizations depend heavily on policies like the Whistleblower Policy, Record Retention Policy and Anti-Discrimination Policy to encourage employees to report any concerns or violations of company guidelines without fear of retaliation from management. By including these policies in their employee manual, nonprofit organizations ensure their employees feel comfortable raising concerns without fear of reprisals and thus contribute to creating a safe and healthy workplace environment.

An employee handbook should include more than technical policies; it should include a statement on at-will employment and grievance and complaint procedures as well. An at-will employment policy makes clear that employees can be hired and fired at will without contract or agreement; grievance and complaint procedures provide step-by-step guides for reporting grievances or concerns which is essential in maintaining fairness and transparency within an organization.

Employee manuals contain training modules, summaries of legal statutes and policies, pay rates charts outlining frequency/method for regular paychecks/final pay as well as personnel file sections addressing how information stored in employee files must be protected in compliance with state/federal regulations. Regular reviews allow organizations to adapt these sections as their goals or operating model changes over time.

Legal Compliance

Nonprofits must comply with a variety of state and federal laws. Unfortunately, nonprofits usually don’t have enough resources to hire legal and compliance departments; therefore an individual should be designated the task of overseeing all compliance obligations across their organization and ensure all members understand them and execute on them consistently.

Nonprofit organizations must comply with various legal compliance policies, including fundraising legal requirements, data privacy laws and immigration rules for employees. Nonprofits should take time periodically to review these obligations and seek legal advice if uncertain of their obligations.

Strong record-keeping practices are also vitally important. Doing so makes compliance with various state and federal regulations, such as those related to charitable solicitation reporting and tax-exempt status easier, so it is advised to store documents in a secure board portal system like BoardEffect, which offers unlimited storage capacity while quickly providing access to essential records.

Nonprofits must ensure they use best practices to keep staff and volunteers safe and healthy, in addition to legal compliance policies. One effective method for this is through regular training sessions which foster an atmosphere of safety and conduct. Furthermore, nonprofits should set clear expectations of board members in order to avoid conflicts of interest or ethical issues that could arise in the future.

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