Whistleblower policies protect individuals who risk their careers — or take other kinds of risks — to report illegal or unethical practices. Although no federal law specifically requires not-for-profits to have such policies in place, several state laws do. Moreover, IRS Form 990 asks not-for-profits to state whether they have adopted a whistleblower policy.
Adopting a whistleblower policy increases the odds that you’ll learn about activities before the media, law enforcement or regulators do. Encouraging stakeholders to speak up also sends a message about your commitment to good governance and ethical behavior.