financial responsibilities of boards

The University of Wyoming is an equal opportunity/affirmative action institution.

FINANCIAL RESPONSIBILITIES:

Nonprofit Boards

Snowy Range Nonprofit Institute

August 4, 2009Bill Taylor, Area Community Development

Educator

2UWCES Community Development Education

BASIC FUNCTIONS

• Protecting the assets of the organization• Collecting income• Providing oversight and direction for fundraising• Paying debts that have been properly documented• Recording receipts, disbursements, and necessary

adjustments• Providing accurate, timely reports


FINAL FIDUCIARY DUTY

• Full board can never delegate its overall fiduciary duty to anyone else

• Governing board members, committee chairs, senior staff should attain basic level of financial literacy


Committees w/ Financial Responsibilities

• Finance Committee– Oversees proper performance of all

financial operations – Regularly reviews all financial activity– Reviews & discusses budget w/ mgmt

before presentation to board


Committees w/ Financial Responsibilities (cont.)

• Audit Committee– Selects auditing firm– Accepts and reviews reports of external auditors

• Investment Committee– Drafts & oversees investment policies– Acts as liaison w/ outside investment advisors– Monitors activities of outside advisor


Treasurer

• Key volunteer financial role for overseeing financial operations

• Legal responsibility for:– Custody of organization funds and securities– Keeping full & accurate account of all receipts &

disbursements, books, financial records– Providing reports to full board

• As size increases, treasurer will transfer more functions to staff


Chief Executive

• Shares many of the treasurer’s oversight duties

• Responsible for hiring and supervising head of accounting staff

• Responsibility for financial records• Level of contractual capability for signing

leases, signing checks, negotiating contracts• Prepares & presents budget to treasurer or

board


Bookkeeper, Controller, Director of Finance

• Enter financial activity– Especially receipts and disbursements

• Produce timely and accurate financial statements

• Monitor cash & investment accounts & reconcile with bank & investment statements

• Prepare payroll


Internal Control

• Segregate duties so every transaction or activity involves two people


Questions to Ask

• How do we divide financial responsibilities among various board committees?

• Financially, what could go wrong in our organization? What procedures do we have in place to prevent or respond to such occurrences?

• Does the audit committee have a private session each year with the auditor?

• Do we have the proper staff for our financial activities?


Fundraising

• Five sources of revenue:– Fees or reimbursement for services– Investment earnings– For-profit enterprises– Gifts, grants, and contributions– Borrowed funds (should not be used for

annual budget needs)


Fundraising (cont.)

• Important board responsibility– Begins with developing resources to fully fund

operating budget it approves

• One source is often annual gifts, grants, contributions (annual fund campaign)– Requires each board member’s active leadership

and support– Often includes expectation of board members’

personal contributions


Fundraising: Strategy

• Success requires board provide overall strategic guidance & direction

• Based on strategic plan, board defines application of financial & human resources


Fundraising: Strategic Planning

• Planning exists at several levels:– Determination of the general values, vision,

mission– Broad strategic goals and plans to fulfill the

mission– Specific tactical objectives to carry out the

strategic goals– Daily operational plans in line with the

objectives

UWCES Community Development Education

15

Fundraising: Strategic Planning (cont.)

Values

Vision

Mission

Strategic Goal

Strategic Goal

Strategic Goal

Strategic Goal

Strategic Goal

Tactical Objective Tactical Objective Tactical Objective

Operational Plan Operational Plan



• SMART strategic goals– Specific– Measurable– Attainable– Related– Time-based

*SMART GOAL HANDOUT



• Combined goals and objectives guide fundraising action plan

• Fundraising action plan establishes types of funds needed based on use– Justifies to perspective donors how their

funds will benefit organization’s constituents


Fundraising: Participation

• Board members have responsibility for approving annual budget and fundraising plan and seeing both are carried out

• May require full participation in fundraising– At minimum, requires board’s expertise &

active engagement to fund priority needs


Fundraising: Participation (cont.)

• Other ways board members can participate:– Introducing staff & volunteers to prospective

donors– Setting up face-to-face meetings w/ donors– Arranging table of prospects as their guests at a

benefit event– Adding signature to event invitations– Sending personal note or making phone call to

donors to thank them for gifts


Fundraising: Oversight

• Responsibility of board to see strategic plans are followed

• Board responsible to oversee faithful use of all funds received in accordance w/ donor restrictions, accounting standards, legal & ethical requirements


Questions to Ask

• Have we participated in forming the organization’s strategic plans for the future?

• Have we participated in the fiscal strategic plan to finance this future?

• Do the organizational fundraising plans and operating policies match these strategies?

• Has the board reviewed and approved the fundraising budget?

• How do we as a board provide leadership to fundraising committees and activities?


References

• Lang, Andrew S., CPA. Financial Responsibilities of Nonprofit Boards, Second Edition. BoardSource Governance Series

• Greenfield, James M., ACFRE, FAHP. Fundraising Responsibilities of Nonprofit Boards, Second Edition. BoardSource Governance Series

• 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

financial responsibilities of boards

Documents

financial activities

financial activityreviews

budget w mgmt

investment policiesacts

liaison w

receipts disbursements

operating budget

various board committees