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FINANCIAL RESPONSIBILITIES: Nonprofit Boards<br />Snowy Range Nonprofit Institute<br />August 4, 2009<br />Bill Taylor, Ar...
BASIC FUNCTIONS<br />Protecting the assets of the organization<br />Collecting income<br />Providing oversight and directi...
FINAL FIDUCIARY DUTY<br />Full board can never delegate its overall fiduciary duty to anyone else<br />Governing board mem...
Committees w/ Financial Responsibilities<br />Finance Committee<br />Oversees proper performance of all financial operatio...
Committees w/ Financial Responsibilities (cont.)<br />Audit Committee<br />Selects auditing firm<br />Accepts and reviews ...
Treasurer<br />Key volunteer financial role for overseeing financial operations<br />Legal responsibility for:<br />Custod...
Chief Executive<br />Shares many of the treasurer’s oversight duties<br />Responsible for hiring and supervising head of a...
Bookkeeper, Controller, Director of Finance<br />Enter financial activity<br />Especially receipts and disbursements<br />...
Internal Control<br />Segregate duties so every transaction or activity involves two people<br />9<br />UWCES Community De...
Questions to Ask<br />How do we divide financial responsibilities among various board committees?<br />Financially, what c...
Fundraising<br />Five sources of revenue:<br />Fees or reimbursement for services<br />Investment earnings<br />For-profit...
Fundraising (cont.)<br />Important boardresponsibility<br />Begins with developing resources to fully fund operating budge...
Fundraising: Strategy<br />Success requires board provide overall strategic guidance & direction<br />Based on strategic p...
Fundraising: Strategic Planning<br />Planning exists at several levels:<br />Determination of the general values, vision, ...
Fundraising: Strategic Planning (cont.)<br />UWCES Community Development Education<br />15<br />Values<br />Vision<br />Mi...
Fundraising: Strategic Planning (cont.)<br />SMART strategic goals<br />Specific<br />Measurable<br />Attainable<br />Rela...
Fundraising: Strategic Planning (cont.)<br />Combined goals and objectives guide fundraising action plan<br />Fundraising ...
Fundraising: Participation<br />Board members have responsibility for approving annual budget and fundraising plan and see...
Fundraising: Participation (cont.)<br />Other ways board members can participate:<br />Introducing staff & volunteers to p...
Fundraising: Oversight<br />Responsibility of board to see strategic plans are followed<br />Board responsible to oversee ...
Questions to Ask<br />Have we participated in forming the organization’s strategic plans for the future?<br />Have we part...
References<br />Lang, Andrew S., CPA. Financial Responsibilities of Nonprofit Boards, Second Edition. BoardSource Governan...
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Financial Responsibilities of Boards

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Financial Responsibilities of Boards

  1. 1. FINANCIAL RESPONSIBILITIES: Nonprofit Boards<br />Snowy Range Nonprofit Institute<br />August 4, 2009<br />Bill Taylor, Area Community Development Educator<br />The University of Wyoming is an equal opportunity/affirmative action institution.<br />
  2. 2. BASIC FUNCTIONS<br />Protecting the assets of the organization<br />Collecting income<br />Providing oversight and direction for fundraising<br />Paying debts that have been properly documented<br />Recording receipts, disbursements, and necessary adjustments<br />Providing accurate, timely reports<br />UWCES Community Development Education<br />2<br />
  3. 3. FINAL FIDUCIARY DUTY<br />Full board can never delegate its overall fiduciary duty to anyone else<br />Governing board members, committee chairs, senior staff should attain basic level of financial literacy<br />UWCES Community Development Education<br />3<br />
  4. 4. Committees w/ Financial Responsibilities<br />Finance Committee<br />Oversees proper performance of all financial operations <br />Regularly reviews all financial activity<br />Reviews & discusses budget w/ mgmt before presentation to board<br />UWCES Community Development Education<br />4<br />
  5. 5. Committees w/ Financial Responsibilities (cont.)<br />Audit Committee<br />Selects auditing firm<br />Accepts and reviews reports of external auditors<br />Investment Committee<br />Drafts & oversees investment policies<br />Acts as liaison w/ outside investment advisors<br />Monitors activities of outside advisor<br />5<br />UWCES Community Development Education<br />
  6. 6. Treasurer<br />Key volunteer financial role for overseeing financial operations<br />Legal responsibility for:<br />Custody of organization funds and securities<br />Keeping full & accurate account of all receipts & disbursements, books, financial records<br />Providing reports to full board<br />As size increases, treasurer will transfer more functions to staff<br />6<br />UWCES Community Development Education<br />
  7. 7. Chief Executive<br />Shares many of the treasurer’s oversight duties<br />Responsible for hiring and supervising head of accounting staff<br />Responsibility for financial records<br />Level of contractual capability for signing leases, signing checks, negotiating contracts<br />Prepares & presents budget to treasurer or board<br />7<br />UWCES Community Development Education<br />
  8. 8. Bookkeeper, Controller, Director of Finance<br />Enter financial activity<br />Especially receipts and disbursements<br />Produce timely and accurate financial statements<br />Monitor cash & investment accounts & reconcile with bank & investment statements<br />Prepare payroll<br />8<br />UWCES Community Development Education<br />
  9. 9. Internal Control<br />Segregate duties so every transaction or activity involves two people<br />9<br />UWCES Community Development Education<br />
  10. 10. Questions to Ask<br />How do we divide financial responsibilities among various board committees?<br />Financially, what could go wrong in our organization? What procedures do we have in place to prevent or respond to such occurrences?<br />Does the audit committee have a private session each year with the auditor?<br />Do we have the proper staff for our financial activities?<br />10<br />UWCES Community Development Education<br />
  11. 11. Fundraising<br />Five sources of revenue:<br />Fees or reimbursement for services<br />Investment earnings<br />For-profit enterprises<br />Gifts, grants, and contributions<br />Borrowed funds (should not be used for annual budget needs)<br />11<br />UWCES Community Development Education<br />
  12. 12. Fundraising (cont.)<br />Important boardresponsibility<br />Begins with developing resources to fully fund operating budget it approves<br />One source is often annual gifts, grants, contributions (annual fund campaign)<br />Requires each board member’s active leadership and support<br />Often includes expectation of board members’ personal contributions<br />12<br />UWCES Community Development Education<br />
  13. 13. Fundraising: Strategy<br />Success requires board provide overall strategic guidance & direction<br />Based on strategic plan, board defines application of financial & human resources<br />13<br />UWCES Community Development Education<br />
  14. 14. Fundraising: Strategic Planning<br />Planning exists at several levels:<br />Determination of the general values, vision, mission<br />Broad strategic goals and plans to fulfill the mission<br />Specific tactical objectives to carry out the strategic goals<br />Daily operational plans in line with the objectives<br />14<br />UWCES Community Development Education<br />
  15. 15. Fundraising: Strategic Planning (cont.)<br />UWCES Community Development Education<br />15<br />Values<br />Vision<br />Mission<br />Strategic Goal<br />Strategic Goal<br />Strategic Goal<br />Strategic Goal<br />Strategic Goal<br />Tactical Objective<br />Tactical Objective<br />Tactical Objective<br />Operational Plan<br />Operational Plan<br />
  16. 16. Fundraising: Strategic Planning (cont.)<br />SMART strategic goals<br />Specific<br />Measurable<br />Attainable<br />Related<br />Time-based<br />16<br />UWCES Community Development Education<br />*SMART GOAL HANDOUT<br />
  17. 17. Fundraising: Strategic Planning (cont.)<br />Combined goals and objectives guide fundraising action plan<br />Fundraising action plan establishes types of funds needed based on use<br />Justifies to perspective donors how their funds will benefit organization’s constituents<br />17<br />UWCES Community Development Education<br />
  18. 18. Fundraising: Participation<br />Board members have responsibility for approving annual budget and fundraising plan and seeing both are carried out<br />May require full participation in fundraising<br />At minimum, requires board’s expertise & active engagement to fund priority needs<br />18<br />UWCES Community Development Education<br />
  19. 19. Fundraising: Participation (cont.)<br />Other ways board members can participate:<br />Introducing staff & volunteers to prospective donors<br />Setting up face-to-face meetings w/ donors<br />Arranging table of prospects as their guests at a benefit event<br />Adding signature to event invitations<br />Sending personal note or making phone call to donors to thank them for gifts<br />19<br />UWCES Community Development Education<br />
  20. 20. Fundraising: Oversight<br />Responsibility of board to see strategic plans are followed<br />Board responsible to oversee faithful use of all funds received in accordance w/ donor restrictions, accounting standards, legal & ethical requirements<br />20<br />UWCES Community Development Education<br />
  21. 21. Questions to Ask<br />Have we participated in forming the organization’s strategic plans for the future?<br />Have we participated in the fiscal strategic plan to finance this future?<br />Do the organizational fundraising plans and operating policies match these strategies?<br />Has the board reviewed and approved the fundraising budget?<br />How do we as a board provide leadership to fundraising committees and activities?<br />21<br />UWCES Community Development Education<br />
  22. 22. References<br />Lang, Andrew S., CPA. Financial Responsibilities of Nonprofit Boards, Second Edition. BoardSource Governance Series<br />Greenfield, James M., ACFRE, FAHP. Fundraising Responsibilities of Nonprofit Boards, Second Edition. BoardSource Governance Series<br />Taylor, William R.; Hewlett, John P.; Weigel, Randolph R. Strategic Planning and Goal Setting. Enterprising Rural Families: Making It Work, University of Wyoming Cooperative Extension Service<br />22<br />UWCES Community Development Education<br />

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