What are some key financial policies that a non profit organization does (or should) have in place? Why are they important?
Key financial policies and procedures for not for profit entities are much the same as for profit entities, but there are some major differences due to the nature of non-profit organizations. In broad terms, NPOs must have:
1. Clear written definitions of the activities and goals
2. Good internal Controls
3. Adequate accounting procedures and record retention
4. Well trained accounting staff
5. Careful cash management policies
First, the NPO must be accountable to the IRS. To achieve and maintain a not for profit status and not pay any income tax requires serious reporting in terms of a complex tax return accompanied by narrative and financial information. Timely reporting to IRS ...
The 455 word solution provides a good response to each part of the question including some examples. The solution also lists five broad mandates for success.