Frequently Asked Questions
Human Resources
Some Common & Less Common Questions on Human Resources Issues In Nonprofits. In HR a simple question often does not have a simple answer. Here are some examples that caused Executive Directors to ask for our help:
Answer: Yes. Exempt employees are salaried. A salary anticipates that there may be in excess of 40 hours for work in a week and the hours over 40 are not subject to additional compensation. However, while under no obligation, you may choose to develop a policy to award paid time off for unusual hours worked. We suggest you call it something other than comp time, say bonus time or flex time. Comp time is by law, used in the public sector, and the terminology could be confusing. Note that non-exempt employees must be paid for all hours over 40 in a workweek—no bonus time.

Nonprofit Governance & Management
Board Activities
Often, the number of board members will be governed by state law. Your legal counsel can assist with your specific requirements. From a best-practice perspective, it is generally recommended that the board of a not-for-profit have at least 3-5 members, the majority of which are unrelated to each other.
Financial Reporting
IRS Form 990 is an informational return that most not-for-profit organizations are required to file annually. It is a public document and the primary source of information regarding the finances, operations, executives, fundraising efforts, etc. of the filing not-for-profit. Form 990 should be annually reviewed by the board (or a subcommittee thereof) BEFORE it is filed with the IRS. Board members should fully understand and verify the information in the form 990, and should feel comfortable asking questions until they are satisfied. A good industry practice is to post the public inspection copy of the filed Form 990 on the organization’s website.
Other Considerations
An operating reserve can be a valuable tool to help a not-for-profit entity respond to temporary changes in circumstances or in its environment. By building and maintaining an operating reserve, an organization can better manage its cash flow on a day-to-day basis.