Most pastors or social entrepreneurs don’t start a church or a nonprofit organization out of a burning desire to draft, adopt, and follow exciting policies. But, having good policies provides protection and stability, allowing the organization to fulfill its mission.

Policies Provide Protection

Policies provide protection in the sense that adopting and following policies can prevent tremendous harm to the organization’s mission. For example, adopting and following a transportation policy that details who can and cannot drive a vehicle, as well as how that vehicle must be driven, can prevent terrible tragedies like the one details in the previous blog, Who Should Drive Church-owned or Leased Vehicles?

Policies Provide Stability

In addition to providing protection, adopting and following policies also provides stability to the church or organization. A good policy outlines how something should happen over time—in other words: the staff isn’t left to wonder and guess how to handle routinely occurring events. Instead, there is a plan and procedure in place.

Years ago, when I served as the pastor of a growing church, we had not gotten around to adopting a compensation policy for staff. Every year at budget time, the board grappled with how to reward performance, grant Christmas bonuses or pastor appreciation gifts, and set salaries for new hires. Eventually, the we tired of not having any track to run on and adopted a compensation policy for the staff. A few board members feared adopting a policy would cause them to lose authority to set compensation, but they soon realized the board-approved policy was still under their purview and allowed them to make consistent decisions while giving the church the stability it needed.

Articles of Incorporation, Bylaws, and Policies

A church or nonprofit generally operates according to three different governing documents. First, if the organization is incorporated (which we highly recommend), the Articles of Incorporation is the highest governing document. This document is normally filed with the state and sets out the purpose for the organization, along with some critical information about its governance.

Second, the organization functions under either a constitution and bylaws or simply a set of bylaws. The bylaws are more detailed than the articles of incorporation and set out several key aspects regarding how the organization elects directors and officers, receives and disciplines members, holds property, and several other key areas of concern.

Third, the organization adopts policies that provide stability for the organization’s day to day operations. As far as hierarchy of governance, if there is ever a conflict, the articles of incorporation trump the bylaws and the bylaws trump the policies. With that said, the organization should work to ensure that there is no internal conflict within the governing documents.

The Board’s Role in Adopting and Following Policies

To ensure that policies are enforceable throughout the organization, a policy should be adopted and annually reviewed by the board or a committee with board-delegated committee. Policies allow the board to complete its duties of oversight while not interfering in the daily management of the organization. In other words, with input from the senior leader and staff, the board adopts the policies, and the senior leader and staff implement them. Feedback between the two groups is important in making sure the polices are effective in creating the protection and stability desired.

Suggested Policies

Here are just a few policies recommended for churches and nonprofit organizations:

• Compensation Policy

• Transportation Policy

• Children, Youth, and Volunteer Protection Policy

• Confidentiality Policy

• Conflict of Interest Policy

• Computer Use Policy
  

Reynolds Law Group can help your church or organization draft and/or revise policies to strengthen your organization or to learn more about incorporation, visit www.reynoldslawgroup.com or call 757-219-2500

This is the fifth blog in a series on Seven Responsibilities of Board members, to check out the first blog in the series, click here.