31+ SAMPLE Nonprofit Agreement

What Is a Nonprofit Agreement?

A nonprofit agreement is a formal written agreement between a nonprofit and an external or third party. The latter may either be an individual such as an employee or volunteer; or an institution such as a local government unit. 

According to an online report published by the Statista Research Department, there are about 1.5 million non profit organizations registered in the United States. The 2021 report also disclosed that expenses of nonprofit organizations reached around $2.48 trillion, while revenue was estimated to be at $2.6 trillion.      

What Makes a Good Nonprofit Organization?

A nonprofit or non-government organization has several characteristics that sets them apart from traditional companies or business organizations. But what makes a nonprofit organization succeed and effect change in the communities they serve? The following examples are just some of the main values and attributes of a good nonprofit organization. 

It is service-oriented. Any genuine and sincere organization is other-centered and puts a high premium on service. Nonprofit organizations are known to support different causes and advocacies. And advocating for something you truly believe in demands a high degree of service and selflessness. Whether it is fighting for women’s rights, environment conservation, social justice or clean water, the aspect of service cannot be removed. There is always someone or something at the receiving end- beneficiaries and targets of the advocacy. Depending on the nature of the nonprofit organization, recipients can be individual scholars, groups of underprivileged people or even an entire marginalized sector among others. Without a genuine attitude of service to drive its programs and projects, nonprofit organizations will not be able to deliver and effect change in the lives of their recipients. Strong leadership is present. Another key characteristic of a good nonprofit organization is its strong and dependable leadership. Nonprofits are still structured organizations; therefore, there is still a hierarchy that exists within its internal laws. So at the helm, all organizations need dedicated and exceptional leaders to help propel their collective objectives forward. Weak or corrupt leadership can hinder growth or worse, it can cause more harm than good for the organization. Nonprofit groups need a leader that not only knows how to handle problems and challenges effectively, but also considers the welfare and interests of all stakeholders involved. The leader must show initiative and exhibit proficiency in both problem solving and crisis communication and management. The spirit of volunteerism is evident. Many non-government organizations are cause-oriented. It is not uncommon for these organizations to source or engage the help of volunteers. Whether they are full-time volunteers or part-time volunteers, they help organizations realize the goals and objectives of their advocacy. Rarely do established nonprofit organizations succeed on their own accord without external help. Whether it is assistance from donors, benefactors or volunteers, the collaboration of various groups and sectors all contribute to the organization’s success. Thus, it is safe to say that dynamic and effective nonprofit groups promote a keen sense of volunteerism that seems to permeate every corner of their work. Volunteers rarely do the work they do in order to obtain rewards; but because of their genuine desire to serve and help a cause that’s dear to them. It is advocacy-driven. As mentioned previously, nonprofits are well-known to support causes and different advocacies. Unlike a typical business or private corporation, profit is usually not the main concern for non-government organizations. Helping other people and promoting development is what drives many nonprofit organizations. Advocacy and the genuine desire to serve are at the core of many of these groups. Some of the more common causes include helping and promoting the needs of persons with disabilities and special needs, homeless, urban poor, cancer patients or the terminally ill.

Types of Nonprofit Agreement

When it comes to nonprofit agreements, it can refer to several contracts. Since nonprofit organizations can work with many partners in advancing their goals and objectives, each formal agreement’s content will naturally vary depending on the nature of the partnership. In other words, an NGO can maintain several possible partnerships over the course of different projects or programs. The following describe just some of the most common types of nonprofit agreements.   

Sponsorship Agreement. A common partner for most nonprofit organizations are donors or sponsors. Since the nature of these organizations are not for-profit, they are mostly dependent on the generosity from external partners and supporters. Funding for projects and programs are important for an non-government organization to mobilize and realize its goals. Thus, sponsors and benefactors play a key role. Aside from offering financial support, they can provide other forms of assistance like logistical needs, manpower, and other resources. To formalize a partnership like this, a sound sponsorship agreement should be in place between the two parties, namely the nonprofit organization and the benefactor or sponsor. Employee Agreement. Another common nonprofit agreement involves employees or sometimes even volunteers. An organization is nothing without the people behind it and running its daily operations. The NGO sector employs millions of people around the world. There are full-time and regular employees, but there are also contractual workers and part-time volunteers. Whatever the nature of employment, it is the responsibility of the nonprofit organization to establish the terms of agreement regarding the service of the individual. It is important for both the worker and the NGO to know their responsibilities and what is expected of either party. This must be clearly defined and indicated in a formal mutual agreement. Partnership Agreement. Since it is the nature of most non-government organizations to collaborate with multiple stakeholders and partners, a mutually beneficial contract must be in place. Partners can refer to a wide range of actors or institutions such as local governments, independent service providers, suppliers, contractors, donors, or even members. For each of these partners, terms and conditions will vary. Thus, it is crucial to draft a partnership agreement according to the needs of both parties. The agreement should not only favor or protect just one party’s interests, but both parties. A true partnership is a fair and dynamic collaboration. It is rarely one-sided. If you want a successful and fruitful partnership with a vendor or any ally, then you need to take into consideration their rights and needs as well as your own.

How to Create a Nonprofit Agreement

To create a nonprofit agreement, you need to establish a mutual understanding between parties. If you are looking for time-saving templates, choose any free sample agreement from the collection above to edit and customize. Select one that suits your needs and follow the basic step-by-step guide below. 

Step 1: Introduce the Parties

The first step in creating a formal nonprofit agreement is to identify the parties entering into the contract. This section will serve as your introduction. As explained previously, a nonprofit agreement can apply to several actors or parties. An NGO or nonprofit organization can establish ties with all kinds of partners including vendors, members, volunteers, and benefactors. It is important to specify who the external party is. Make sure to state the complete name and provide the complete business address. With regard to the format, you can emphasize the parties’ identities by using bold or underscored text.    

Step 2: Define the Roles and Responsibilities

Once you have determined the parties involved, the next step is to lay out the different roles and functions of either party. In the case of a nonprofit agreement, responsibilities and tasks may vary depending on the nature of the partnership. For example, a volunteer would have a different job description from that of an independent contractor. Thus, it is critical to be specific and concrete when defining the roles of either party. When enumerating the job functions or tasks of a party, you can use bullet points to make it appear more organized.  

Step 3: Set the Terms and Conditions

An essential part of any formal agreement are the terms and provisions. Any agreement or contract of parties needs to have a set of guidelines or ground rules that will help direct the relationship. It is important that these conditions are mutually agreed upon by both parties. The terms can either be general or specific, depending on the contract. Typical terms include confidentiality statements, salary grade, termination of contract, schedule of payments, benefit packages, etc.    

Step 4: Confirm the Agreement

Lastly, your nonprofit agreement should end with a formal declaration affirming that both parties consent and agree to the aforementioned terms. This statement does not need to be long. A brief sentence or two should be enough. The purpose of the formal statement is merely to confirm the agreement contract of the participating parties. In addition, make sure to leave adequate space for both parties to affix their names, signatures, and the date of agreement.    


What policies should a nonprofit have?

A nonprofit organization’s policies and ground rules would vary depending on a number of factors including leadership, organizational structure and core values among others. But in a general sense, universal and common policies would focus on areas such as sponsorship, fundraising, budgeting, confidentiality and privacy.

What are the types of non profit organizations?

According to an article by Indeed, some of the common types of nonprofit organizations are social advocacy groups, public charities, private foundations, employee associations, trade associations and fraternal societies.

Can the founder of a non profit receive a salary?

Generally, yes. A founder of a nonprofit group may dedicate a fair wage for himself or herself. Many big and established NGOs employ full-time workers and offer their employees regular salaries and benefits.

According to an online article published by Legal Zoom, a non profit organization can organize itself under four main classifications, namely an unincorporated association, a trust, a corporation, or a limited liability company.

Can a non profit organization be listed?

In the most general sense, a nonprofit or nongovernment organization cannot sell shares or stock like a regular for-profit organizations and companies.

If you are tasked to draft a nonprofit agreement, you need to ensure that it is comprehensive, coherent, and fair. And if it is convenience and efficiency you’re looking for, using a ready-made template can save you a lot of time and energy. Browse the sample templates above and start customizing your own agreement today!