Effective Date: [Insert Date]
Approved By: [Board of Directors/Executive Director]
Applies To: All employees, contractors, and volunteers making purchases on behalf of [Nonprofit Name]
1. Purpose
This policy establishes guidelines for purchasing goods and services in a manner that ensures financial responsibility, transparency, and efficiency while differentiating approval levels between Executive Team and Other Staff.
2. Roles & Responsibilities
2.1 Executive Team
Includes:
- Lead Pastor,
- Executive Pastor
- Other designated executives
Responsibilities:
- Approve high-value purchases
- Ensure budget compliance
- Approve vendor contracts over a specific threshold
- Provide oversight for financial stewardship
2.2 Other Staff
Includes:
- Department heads
- General staff
Responsibilities:
- Request purchases as needed
- Obtain proper approvals before making purchases
- Ensure alignment with budget and mission
3. Purchasing Approval Levels
All purchases must fit within approved budgets.
| Purchase Amount | Approval Required | Additional Requirements |
|---|---|---|
| Up to $250 | Any staff member | Must be pre-approved by department head |
| $251 – $1,000 | Department head or manager | Must fit within departmental budget |
| $1,001 – $5,000 | Executive Team member | Requires 2 written quotes for competitive pricing |
| $5,001 – $10,000 | Lead Pastor | Requires 3 written quotes; purchase order (PO) required |
| Above $10,000 | Board of Directors | Requires 3 written quotes; purchase order (PO) required |
4. Special Purchase Categories
4.1 Recurring Expenses (e.g., utilities, rent, software subscriptions)
- Approved by Executive Team during the annual budget process.
- Does not require individual approvals unless over budget.
4.2 Emergency Purchases
- If urgent (e.g., facility repairs, critical needs), approval can be obtained retroactively within 48 hours from an Executive Team member.
4.3 Contracts & Service Agreements
- Any contract exceeding $5,000 requires Executive Team approval.
- Contracts exceeding $10,000 or multi-year commitments require Board of Directors approval.
5. Purchasing Procedure
Step 1: Submit Purchase Request
- Fill out a Purchase Request Form or submit a request through an approved system.
- Attach vendor quotes if required.
Step 2: Approval Process
- Obtain approval based on purchase amount (see Section 3).
Step 3: Vendor Selection & Purchase Order (If Applicable)
- Compare pricing from multiple vendors.
- Submit a Purchase Order (PO) for approval if purchase is over $5,000.
Step 4: Payment Processing
- Approved purchases are processed via credit card, check, or ACH payment through the finance team.
Step 5: Receipt & Reconciliation
- The purchaser must submit receipts and documentation to the finance department within 7 business days.
6. Prohibited Purchases
Employees may not use nonprofit funds for:
- Personal expenses
- Alcohol, tobacco, or controlled substances
- Gifts exceeding approved limits
- Unapproved donations to external organizations