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Human Resources Policies for Nonprofit Organizations

hr policies for nonprofit organizations

Nonprofit organizations must exercise caution when creating human resources policies for compliance with workplace laws and to foster an enabling organizational culture.

Establishing written personnel policy manuals makes it easier to address conflicts and set expectations between supervisors and employees. Some nonprofits assign HR duties directly, while others hire an outside firm specializing in employee relations to perform these services.


Nonprofit organizations face similar hiring difficulties as for-profit companies; however, nonprofits have their own distinct culture driven by passion and dedication to their cause. A robust nonprofit recruiting process is vital in order to attract top talent.

As part of your hiring policy, it is vital to outline the skills and qualifications necessary for each position. Doing so allows candidates to focus on what’s expected in their jobs while helping you find one who fits your requirements. Your compensation level should also be taken into consideration to ensure it fits with similar nonprofit organizations in terms of salary levels offered.

Consider employing a referral program to find candidates who will fit well into your organization. Studies show that referral candidates tend to be of higher quality and remain longer.

Nonprofits may promote current employees to fill vacant positions within the nonprofit. This can be cost-effective and beneficial to employee morale while simultaneously showing existing staff there is potential for career advancement within your nonprofit. It’s also crucial that charitable nonprofits have access to guidance and resources regarding employment laws; many providers of director and officer liability insurance may offer this as part of their policy benefits.


Nonprofit organizations tend to be smaller than for-profit businesses and typically have less money dedicated to people management, making nonprofit HR specialists all the more invaluable as they abide by employment laws and draft prudent personnel policies. Nonprofits could benefit from working with an expert in nonprofit HR or receiving guidance and resources through their director and officer liability insurance provider.

Non-profit HR departments must commit to transparency and openness when developing policies regarding hiring, promotions and pay. Document these policies so they are available to candidates and employees, while publishing their commitment to diversity, equity and inclusion on their websites.

HR professionals working for nonprofit organizations may feel isolated within their organizations, so it is wise to form a network of peers they can depend on for support and exchange of ideas. One such HR association or online group that shares news, best practices and policies would be ideal. One such event, the Nonprofit Leadership Center’s Nonprofit HR Roundtable brings together HR leaders from different nonprofits together for discussion of problems through peer learning environments.


Nonprofits typically operate under time-limited grants, meaning their staffing levels fluctuate frequently. A strong HR presence is critical in keeping everything running as efficiently as possible within an organization.

HR professionals working for nonprofit organizations often take an extremely hands-on approach to their roles as HR professionals. Depending on the size of the nonprofit, they may be responsible for running payroll, handling employee relations, organizing training courses, ordering office supplies and planning holiday parties in addition to performing their regular responsibilities.

As with any business, nonprofits should also have clear compensation and promotion policies in place. Having these documents will enable HR professionals to implement consistent hiring guidelines when filling new positions; performance reviews; annual raises. Failure to implement such documents could result in legal problems; for example if someone qualifies for overtime as part of their job duties then compensation must be provided appropriately.


Nonprofit organizations should promote open positions across various channels, including their organization’s website and job boards like Indeed, LinkedIn, Monster or Foundation List and Idealist. Doing this helps nonprofit organizations reach candidates from diverse industries more quickly.

Offering attractive compensation packages can be an effective recruitment and employee retention strategy for nonprofits, while increasing employee satisfaction. Nonprofits should remain realistic about what they can afford in terms of salaries and benefits for employees.

Interviewing multiple candidates can help nonprofit organizations select the perfect individual for any given role. Skills or personality assessments may also prove helpful in gauging candidates’ abilities and suitability for the position at hand.

Nonprofits must also review the distinctions between employees and independent contractors to ensure compliance with employment laws, since misclassification can result in fines and back tax payments. Finally, nonprofits may wish to obtain directors and officers (D&O) insurance that covers employment practices liability coverage.


nonprofit organizations differ significantly from for-profit companies in terms of their needs and employment laws; therefore, it’s imperative that nonprofits establish human resources policies that comply with all relevant regulations.

Nonprofit companies must abide by privacy laws regarding employee and volunteer data. To avoid potential issues that could arise, ensure your policy protects confidentiality of all records. Furthermore, create an easily accessible reporting hotline so anyone may report violations or concerns.

HR teams are well suited to shaping culture within an organization. HR can play a powerful role in cultivating a healthy work environment by encouraging a work-life balance, shared values, responsive customer service from HR, training and development programs for employees as well as conflict resolution through clear policies regarding hiring, firing and employee departure. Nonprofit organizations should consider posting their commitment to diversity equity and inclusion on their website to draw potential candidates to join them as employees while also being transparent with regards to compensation practices and benefits so as to attract and retain top talent.

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