Many nonprofit organizations have taken a leading role in advancing DEI initiatives in their communities, recognizing that they have a unique opportunity to model best practices and advocate for change. Financial policies are an important aspect of DEI, and organizations should ensure that their policies address financial equity and inclusion, along with other aspects of diversity, equity, and inclusion. Here are few areas to consider when reviewing your policies.
Cash Payments and Receipts - Most organizations have moved away from cash as much as possible. From an internal control standpoint cash is risky - it is hard to track, hard to prove and harder to keep safe than other forms of payment. However, if the population you serve lacks access to technology or transportation, removing cash as an option may severely limit your ability to make change in the community. Make sure to consider what barriers your population might have to noncash transactions (both payments and receipts) and consider updating your internal controls. The risk of loss does not always outweigh what might be gained in community benefit!
Payroll and Expense Reimbursements - Review the frequency and processing time for staff payments. We already know that nonprofit staff are underpaid. Don't add to this financial burden with long payroll periods and processing times. Consider shortening the time between pay periods and processing expense reimbursement as they come in. Better yet - eliminate expense reimbursements with company credit cards or prepaid cards.
Vendor Selection - Consider whether your partners are following similar DEI practices as your organization. Who you pay in the community impacts your community.
Invest in DEI (this means put it in the budget!) - Don't assume all of this work will get done at no cost! This takes time, effort and funds. Sometimes the DEI planning happens in committees that aren't part of the usual budgeting process. Create a process to make sure that planning makes its way to the approved budget, with funding sources identified.
Transparent Financial Policies - Commit to publishing your financial statements regularly and openly sharing information with staff and stakeholders about your investments, expenses, and revenues.
Investment Policies - Prioritize ethical investment practices that align with your DEI values. This includes avoiding investments in companies with a history of engaging in discriminatory or harmful practices, such as exploiting workers, contributing to environmental degradation, or engaging in oppressive political activities. Prioritize social responsibility and sustainability, while also generating financial returns.