By-law is a rule established by an organization to regulate its activities and manage internal affairs. Well defined and clear set of by-laws provide a clear structure to the NGOs and facilitates in smooth functioning. Along with providing consistency in working, by-laws also help in developing networks with local organizations and government entities. It is important for your organization to have a set of by-laws as they will guide you in operating and managing all your activities. Just like Article of Incorporation, different countries will have their own provisions for bye-laws, and a NGO should refer to them before drafting the by-laws. Most often NGOs should have the following information in the by-laws:
- Introduction: This section provides a summary of the by-laws.
- Name, Logo, Address: Mention the organizations name, acronym and a logo (if available). Give details of the location and address office.
- NGO Purpose/ Mission/Vision: Give information related to the NGO mission and vision. You should mention about the activities that the organization will undertake to achieve its objectives.
- Membership Information: If you plan to have some sort of membership in your NGO then give details of the membership process, the fees, member qualification etc. Also mention the roles and responsibilities of the members.
- Governance Structure: Describe the roles and responsibilities of the board, composition, qualification of board members the frequency of meetings, process of election of board members.
- Staff management: Layout details of the staff members, their roles and duties, procedure of board members.
- Auditing: state about the process of conducting audits of finances, projects and other resources.
- Legal Issues: give details about the legal procedure in place, law under which the NGO is formed, resolution of legal matters.
- Amendment in By-laws: process related to the bringing modifications and amendments in the by-laws.
While writing the by-laws for your organization, it is a good practice to refer to by-laws of similar organizations, consult with board members and review the articles regularly. Once the by-laws are written, get them approved by the board members. Be sure that a copy of the bylaws is handy any is put into use. Using the by-laws in everyday activities will lead to smooth functioning of the organization by reducing confusion and chaos.
Registering your organization
Once you have written the by-laws and the articles of incorporation, you can register the organization as per the country norms.
Refer to the country specific guidelines to legally register your organization as per the rules of the country you wish to operate. Registering the organization requires you to submit several documents to the registering authority. You will be required to fill a form and submit the following documents:
- By-laws
- Article of incorporation
- List of Board members
- Mission and vision statement
Registering the organization is often a time consuming process, but there are several advantages once you get registered.
- Enhances organizations credibility
- Hiring of staff becomes easier
- You can seek financial assistance from government agencies and international donors
- You can claim tax benefits
Successful management of your NGO
Congratulations! You just got your dream NGO registered.
You might be really stressed out and tired during the entire process of getting the organization registered, but now is not the time to rest. Getting the organization registered is one thing and successfully managing it, is a different ball game altogether.
Registering a NGO is quite similar to purchasing a piece of agricultural land. Unless and until you plough the field, sow the seeds, timely water the crops, add the right amount of fertilizers, pesticide etc., your field will remain barren. In the same way, you need to do a whole lot of things before your NGO can create a positive impact.
This chapter explores some of the most important issues that should be considered to successfully managing your NGO.
Initial board meeting
Once the NGO comes into existence, you should hold the first meeting with the board members. It is during this meeting that the board members formally adopt the bylaws and also discuss about important issues related to the NGO functioning.
Some of the issues that you can discuss during this meeting are:
- Setting up Office
- Office Supplies
- Hiring of staff
- Project Development
- Communication Strategy
- Policy Development
Policy Matters
Policies are one of the most important documents that will guide the NGO staff in carrying out routine office work. Creation of policies is definitely a time consuming process, but well written and comprehensive policy documents yields several benefits.
Let us fist understand the meaning and the purpose of a Policy:
A policy is a deliberate system of principles to guide decisions and achieve rational outcomes. A policy is a statement of intent, and is implemented as a procedure or protocol. Policies are generally adopted by the Board of or senior governance body within an organization whereas procedures or protocols would be developed and adopted by senior executive officers. Policies can assist in both subjective and objective decision making.
Policies are required to bring operational structure in an organization to ensure effective delivery and working within the organization. Some of the ways in which policies help organizations are as follows:
- Internal control: policies help you to keep internal checks within the organization. Thorough the enforcement of the policy you can maintain a standard protocol for almost all aspects of operations in the organization.
- Effective office management: policies help in managing the office effectively. Be it maintenance of the organization’s books or issuance invoice, payments, banking transactions all of it can be done through proper policy enforcement.
- Receptive staff: Policies allows the NGO staff to clearly understand individual & team responsibilities. This facilitates smooth functioning thereby saving time and resources.
- Improves transparency and accountability.
- Enhances trust amongst stakeholders.
Policies are drafted by board members and once approved by the senior executives they come into force. Most policy documents have a standard format and contain the following components:
- Statement of purpose: A brief statement outlining the purpose of the policy.
- Scope statement: This section describes the scope of the policy, i.e the people and resources that lie within the ambit of the policy.
- Date of commencement: Clearly mention the date indicating when the policy comes into force.
- Responsibilities: this section clearly rolls out roles and responsibilities of staff to carry out policy statements. Each policy brings with a structure that ensures that the policy is implemented effectively.
- Policy statements: this forms the most important section of the policy indicating the specific regulations, requirements, or modifications to organizational behavior that the policy is creating.
There are a whole lot of policies that can be developed by an NGO, however, the following three policies should be developed in the beginning itself.
Finance and Accounting Policy: This document is not just necessary for you to manage your finances and accounts, but this would also help you in complying with legal protocols.
Purpose: The NGO Financial and Accounting policy describes the procedures and systems that the NGOs adopts for managing its finances. The policy will cover the flow of financial data within the organization that would ensure that the health of your NGO in terms of finances remains good. Having a sound financial policy in place will certainly enable you in keeping track of the NGOs expenditure, basis which you can plan your fundraising strategy.
Make sure that the financial policy is a comprehensive documents and covers the following topics:
- Accounting systems
- Cash Handling
- Banking Transactions
- Salaries and Advances
- Payments
- Financial Reporting procedure and format
Human Resource Policy: The Human Resource policy is an important document that will provide the framework by which you manage the employees in the organization. Once your NGO successfully raises funds, you will be hiring staff, this HR policy will then come into play. This policy will clearly spell out the process of hiring, the expectations from employee, leaves, salaries etc.
Purpose: The HR Policy describes the processes, standards and obligations of NGO employees subject to their performing of the duties and responsibilities in their respective job descriptions. The policy will guide you right from the time of hiring to termination of employees. Make sure that the HR Policy is shared with all employees, so that they are aware of the various clauses and adhere to it.
While developing the HR policy for your NGO, you should cover the following point:
- Recruitment process
- Starting on the job
- Payment policies and procedures
- Staff development policies
- Leave policy
- Disciplinary procedures
- Temporary appointments
- Employee welfare
- General policy guidelines
Communication policy: Communications play an important role towards successfully conveying about your organizations mission and goals. The communication policy helps in laying down a framework for all communications (external and internal) within all fields of operation.
Purpose: A communication policy describes the tools and processes to be used for effective communication to enhance transparency, relevance and coordination. The policy lays down the guidelines and give details about the communication protocol, roles of staff members in the communication process, target groups and channels.
While developing the communication policy you can include the following:
- Communication tools (Telephone, Fax, Emails )
- Visual Identity protocol (Use of Logo, Letter head)
- Communication protocol (Font, Format, language)
- Website design and maintenance
- Social Media
- Target Audience (Communities, Donors, Government)
- Media related communication
- Access of staff to the use of phone, mobile, internet etc.
The number of policies that you may want, will largely depend on the decision of the board members, location of work, type of activities, scope and coverage etc. Many organizations also develop policies related to:
- Procurement of products
- Travel and reimbursement
- Computer use
- Safety and security
- Grievance Redressal
- Fixed assets
Remember, there is no rush for developing so many policies right at the beginning, you can always draft a policy as your organization grows.
SWOT: Another tool that can help you in managing the organization is through a SWOT Analysis. Conducting a SWOT analysis is a very effective tool to assess, analyze the current health of your organization and manage the organization successfully. SWOT stands for Strengths, Weaknesses, Opportunities and Threats. SWOT helps an organization to analyze both internal (strengths and weaknesses) as well as external factors (opportunities and threats) which are likely to impact the working of the organization. By conducting a SWOT you can manage the projects as well the organization in a much better way.
Through the SWOT you will be able to conduct a self-analysis of the processes, policies and governance structure of the organization, operations and project issues. Many organizations conduct such analysis only during crisis, however carrying it out on a regular basis (annually) can help the organization in better managing their internal systems and externalities.
During the SWOT the following are analyzed:
- Strengths: characteristics that give you an advantage over others.
- Weaknesses: Characteristics that place you at a disadvantage relative to others.
- Opportunities: External elements that the project be an advantage to expand your work.
- Threats: External elements in the environment that could act as a risk for you.
