Setting policies and procedures
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A guide to laying down the correct policies and procedures in your non profit organisation and how to establish appropriate controls, especially covering money and risk.
Policies and procedures set out how a charity should be run. One of the most important ways that a board can oversee the delegation of its work is via written policies and procedures.
A clear and coherent set of policies and procedures help ensure that the charity or non profit is well run. Policies and procedures provide a framework for delegation by the board to sub-committees and the paid staff or volunteers, by setting out how things should be done and what is expected of people.
They provide clarity and can reassure the board that work will be conducted appropriately and in accordance with the law. You may be able to save time by looking at other organisation’s polices as a starting point. Be sure to check they are appropriate for your charity or not-for-profit organisation, you may need to adapt them for your circumstances. Your organisation’s values should also be a constant guide.
It is not expected that your board will necessarily develop these policies but your board should ensure that those needed are in place, are followed and updated as appropriate.
The scope and complexity of policies will vary according to the size and circumstances of the charity. They might include policies on:
- financial management and fundraising
- people management
- risk management
- information management
- quality management and complaints.
Financial management and fundraising policies
Financial procedures and internal controls (e.g. who keeps records, who authorises expenditure, how cash is handled) a reserves policy, an investment policy. You may also need fundraising polices e.g. on accepting company donations.
For more information on financial procedures see our Financial managment section. See also the Charity Commission’s guidance CC8 - Internal Financial Controls for Charities (pdf 211kb) and the accompanying checklist (pdf 81kb).
People management policies
People management policies are particularly crucial if your organisation has staff. They should include discipline and grievance procedures. See our You and your team section for more information on developing employment policies and procedures including essential human resource policies.
Risk management approach
Other key areas to consider include Health and safety and protection of children and vulnerable adults. See the Charity Commission’s guidance Safeguarding Children, Organisations like NSPCC and Safechild also provide guidance on child protection issues including guidance templates for writing child protection policies and risk assessments.
Information management policies
It’s important you abide by the data protection act. See Lasa's ICT Knowledgebase on developing data protection policies or the Information Commissioner's Office. You may also need ICT policies e.g. on the use of the internet or remote working.
Quality management and complaints systems
It’s worth considering whether your organisation should have a quality management system to ensure that your organisation routinely provides good service.
You should also consider a complaints procedure. In its publication CC10 The hallmarks of an effective charity (pdf 308kb), the Charity Commission recommends that charities have ‘well-publicised, effective and timely procedures for dealing with complaints about the charity and its activities’. You can find more information about the need for effective complaints management in the Charity Commission publication RS11 Cause for Complaint? How charities manage complaints about their services (pdf 989kb).
See the Your organisation section for more on policies your organisation may need. Try not to make your policies and procedures more complicated than they need to be. It also helps to use plain English.
See the Organising yourselves effectively page to find out about what board policies are needed concerning how the board itself works (rather than the organisation).
Have your say
What have you learnt from the governance challenges you have faced in the past? Could you share your experience with others who are just starting out?
Ask questions and exchange ideas on the Governance forum.