Practical Policies - Easy and Short!

A national speaker who specializes in non-profit law likes to say “The only thing worse than not having a policy is having a policy in place you don’t follow.”
Policies are like seat-belts: they only work if you have installed them in your car AND you use them.
I recently helped an organization dissolve that, even with three bankers on the board, allowed the Executive Director to move bank balances around electronically – eventually $750,000 went right into his bank account.
“It was so convenient,” said one of the bankers miserably. “We didn’t even think to question it when he asked if we could arrange it!. The E.D. is in Mexico, we think….."

The three issues surrounding polices for your organization are:

1. Know that there are two types of policies: Programmatic and Organization
Program policies deal with human resource/employee issues (the executive director should manage these):

• Money and cash handling systems
• Child policies
• Complaints

Organizational policies (Board directed):

• Ethics
• Gifts
• Board reimbursement
• Financial controls
• Board and key staff dismissal
• Media relations
• Public and internal complaints

2. Organizational policies should not only be written down, they should be in every board member’s notebook and presented at every orientation for new board members. Once every year or two, at a board retreat, the policies should be very briefly reviewed.

3. Policies should be as short as possible, put in everyday language, and available at every board meeting to help with decisions. Policies should be made available to the public as part of any transparent organizational documents, and, of course, staff as well as board members should be trained in all policies.

Many people groan when they hear the word “policy.” Remember – policies can and should be short, easy to read, and in place BEFORE there is a problem. The board can gather examples of polices from other organizations, but they should be customized and then checked with an attorney to make sure they comply with state law.
Policies can derail problems before they arise – most of what we hear in the news are the children and embezzlement cases that make front-page headlines. All could have been prevented with a few simple polices that train people to have “check” systems in place and keep moments of “opportunity” from happening: An volunteer alone with a child, a lone employee that counts cash from a workshop, a board treasurer that can write and sign checks no matter what the amount.
It only takes about three months for a special board task force or “governance committee” to develop polices and then train the rest of the Board and key staff in them. But don’t wait – putting on your seat-belt after the crash is not going to save you.

To Manage or Not to Manage – That is the Question for Board Members!

“I am so SICK of my Board Chair,” groans one exasperated Executive Director. “He stops by every other day, and calls me all the time. He made some decisions about one of my programs that were in a press release to the paper before I even knew about them. What a nightmare!”

“My Board is so disengaged they forget to show up at board and committee meetings,” says another E.D. with a forlorn expression on her face. “If the organization folded tomorrow, I wonder if any Board members would care?...Or even notice?”

These are extreme cases, I know, but variations of the “micro-manager” and the “hands-off” style exist to some degree with every Board of Directors. It is a slippery slope either way, but there is clear direction given about the Board role in managing an organization, especially in Oregon.

In the “Guide to Non-Profit Board Service In Oregon,” produced by the Office of the Attorney General, it clearly states that the Board is not expected to manage the day-to-day operations of the charity. It is the responsibility of the Board to hire the CEO or Executive Director to carry out the mission (through the day-to-day operations) of the organization.

Having said that--a good rule of thumb that I always use when training Boards is “nose in, fingers out”. Make sure your financial controls are in place so no one is “tempted” by cash or checks flowing into the office. The Board should require consistent updates on how the Executive Director is accomplishing annual programmatic goals that were formed during the annual strategic plan.

Human resource policies, work safety policies, and board policies should be used to protect and provide a framework within which the Board and key staff can freely function.

The Board should really be able to spend the bulk of its time at meetings focusing on the strategic direction of the organization: looking forward into the coming year to see if the economy is going to throw up any “sneaker waves”, deciding how to build their capacity to govern through new trainings or conferences, planning ways they can promote the mission of the organization in the community, etc.

Too many Boards hope their ED will be their main public speaker – but trust me – it is much more interesting to community members to hear a volunteer board member speak about their passion for the organization then a paid staff person who always look like they are trying to save their job.

Finally, the Board is required by Oregon law to be engaged and able to execute their fiduciary responsibilities. That means Board members come to meetings, ask questions, check the financials regularly, and understand the organizing documents that chartered the organization: the bylaws and the articles of incorporation.

A recent Board we worked with came to a Directors monthly meeting only to discover that they were overdrawn by $2,000 in their checking account. The ED shrugged and told them to "pay more attention". She no longer works there, but she is right - the Board President and Treasurer should have been on top of that. Right now the Board is trying to figure out where the money went and why - but in the meantime, it makes fundraising pretty hard.