As a small non profit are we required to have a vesting schedule for our 403(b)
( 1yr, step down, 2yr 100 %) or can we immediately vest employer contributions?

The answer is a definite "no," unless I am misunderstanding your question. What makes you think that you might have to have a vesting schedule for employer contributions?

H1! Thanks!
Well, until now we have had a 403(b) in which only the employee made contributions. Our finance commitee has just made a recommendation to the full board in order to allow the employer to match contributions. One of the board members has posed some questions regarding the new plan which included:
Is there a vesting period for employer contributions?

I would like to answer her NO, if the decision is up to MGMT. I was not sure if there was some regulation that requires vesting!

Careful reading of the original post will indicate that two (opposite) questions are asked.
To which question are you answering "no"?

Maybe this works: There is no requirement under section 403(b) to subject any amount to vesting.

Whoops; you're right. My "no" was a "no, there is no requirement to have delayed or graduated vesting."