Download - Financial Responsibilities of Boards
![Page 1: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/1.jpg)
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
![Page 2: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/2.jpg)
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
![Page 3: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/3.jpg)
3UWCES Community Development Education
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
![Page 4: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/4.jpg)
4UWCES Community Development Education
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
![Page 5: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/5.jpg)
5UWCES Community Development Education
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
![Page 6: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/6.jpg)
6UWCES Community Development Education
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
![Page 7: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/7.jpg)
7UWCES Community Development Education
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
![Page 8: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/8.jpg)
8UWCES Community Development Education
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
![Page 9: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/9.jpg)
9UWCES Community Development Education
Internal Control
• Segregate duties so every transaction or activity involves two people
![Page 10: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/10.jpg)
10UWCES Community Development Education
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?
![Page 11: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/11.jpg)
11UWCES Community Development Education
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)
![Page 12: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/12.jpg)
12UWCES Community Development Education
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
![Page 13: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/13.jpg)
13UWCES Community Development Education
Fundraising: Strategy
• Success requires board provide overall strategic guidance & direction
• Based on strategic plan, board defines application of financial & human resources
![Page 14: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/14.jpg)
14UWCES Community Development Education
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
![Page 15: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/15.jpg)
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
![Page 16: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/16.jpg)
16UWCES Community Development Education
Fundraising: Strategic Planning (cont.)
• SMART strategic goals– Specific– Measurable– Attainable– Related– Time-based
*SMART GOAL HANDOUT
![Page 17: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/17.jpg)
17UWCES Community Development Education
Fundraising: Strategic Planning (cont.)
• 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
![Page 18: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/18.jpg)
18UWCES Community Development Education
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
![Page 19: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/19.jpg)
19UWCES Community Development Education
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
![Page 20: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/20.jpg)
20UWCES Community Development Education
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
![Page 21: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/21.jpg)
21UWCES Community Development Education
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?
![Page 22: Financial Responsibilities of Boards](https://reader033.vdocuments.site/reader033/viewer/2022061306/54b393cf4a7959c47f8b45e1/html5/thumbnails/22.jpg)
22UWCES Community Development Education
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