3 Non-Profit Policies to Review Now

As markets shift, inflation persists, and the donor landscape continues to evolve, it is more important than ever to review your organization’s policies and ensure they still align with your goals and the environment we’re operating in. Taking time to review three key areas—your gift acceptance policy, investment policy, and spending policy—can ensure these policies are still supporting your organization's current and long-term goals.

Gift Acceptance Policy: Know What You Can and Should Accept

A well-crafted gift acceptance policy is one of the most important governance documents your non-profit can have, yet it's often one of the most overlooked. At its core, this policy should answer three fundamental questions.

First, what types of gifts can your organization accept? Cash and marketable securities are straightforward, but what about real estate, appreciated stock, cryptocurrency, or personal property? Each of these comes with its own administrative complexities, legal considerations, and potential costs. Your policy should clearly define which gift types are within bounds and which fall outside your organization's capacity or mission.

Second, under what terms will you accept a gift? Some gifts come with strings attached, like donor-imposed restrictions, naming rights, or conditions on how and when funds may be used. Your policy should outline the circumstances under which restricted gifts are appropriate and when they may create more burden than benefit.

Third, and perhaps most importantly, who has the authority to say yes? Without a clear chain of approval, well-meaning staff may inadvertently commit the organization to accepting gifts that create legal and financial burden or reputational risk. Your policy should clearly identify if approval lies with an executive director, the board, a designated gift acceptance committee, or a combination of those three.

Investment Policy: Align Your Portfolio with Today's World

Persistent inflation has reshaped the financial landscape in meaningful ways, and investment policies that made sense a few years ago may now be working against your organization's long-term goals. The increased cost of actually executing your mission means that relying solely on capital preservation tactics may no longer be sufficient. Your organization may need to consider whether a more growth-oriented investment strategy is appropriate.

Start by clearly articulating your organization's current financial goals. What does your portfolio need to accomplish? Are you focused on long-term endowment growth, near-term liquidity, or a balance of both? The answers should help determine your asset allocation guidelines and risk tolerance.

From there, assess whether your policy's existing constraints are still aligned with those goals. Overly conservative guidelines may have made sense in a low-inflation environment but could leave your organization falling further behind today. Conversely, if your policy was written during a period of market optimism, you'll want to ensure you have appropriate safeguards in place.

It’s most important to build in flexibility. A target return or asset allocation that seemed well-calculated at your policy's inception may no longer serve you well as the environment changes. Rather than treating your investment policy as a fixed document, consider including language that explicitly calls for regular review and that gives your investment committee room to adapt as conditions evolve.

Spending Policy: Balance Mission and Sustainability

Inflation doesn't just affect portfolio positioning, it also affects what everything costs. Program delivery, staffing, facilities, and services have all become more expensive, putting pressure on non-profits to spend more in order to maintain the same level of impact. This makes an up-to-date spending policy more important than ever. As you review your spending policy, consider asking a few key questions.

Does it honor donor intent and support your organization's mission?
Spending decisions should always reflect your organization’s core purpose, and donors who placed restrictions on their gifts expect those restrictions to be honored.

Does it reflect your organization's current financial condition?
A spending rate that was sustainable three years ago may look very different today. Be honest about where your organization stands and whether your policy gives you the room to respond.

Does it allow for a reasonable degree of year-to-year predictability?
Inconsistent spending can make planning difficult and undermine confidence among staff, donors, and the communities you serve. A good spending policy strikes a balance between responsiveness and stability.

Does your policy allow spending to adjust with the current environment?
A flexible spending policy should allow for increased spending during strong financial periods while limiting to core commitments during difficult ones. Building in this adaptability can help your organization weather uncertainty without sacrificing long-term sustainability.

The Value of an Outside Perspective

Reviewing policies is a valuable exercise, but it's only part of the picture. Speaking with a trusted financial advisor, one who understands the unique needs and obligations of non-profit organizations, can bring perspective that's difficult to generate from the inside. An advisor can help you assess whether your investment and spending policies are truly aligned, flag potential blind spots in your gift acceptance practices, and stress-test your assumptions against current market conditions.