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Drafting a governance policy is an important step in ensuring that your Non-Profit is up-to-date on the important features of a comprehensive governance policy. When the IRS reviews an application for a 501(c)(3) Tax-Exempt Organization, it will look for the following established policies:
1. bylaws that govern the non-profit, including how the Board of Directors is elected
2. a conflict of interest policy
3. a compensation policy
4. an investments policy
5. a fundraising policy
6. documentation of governance decisions
7. document retention and destruction
8. a whistleblower claims policy
The governance policy is most importantly applied to the Board as it relates to their fiduciary duty to the non-profit.
An extensive discussion on the contents of an effective governance policy are discussed in an IRS publication.]