financial responsibilities of boards
DESCRIPTION
TRANSCRIPT
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
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
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
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
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
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
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
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Internal Control
• Segregate duties so every transaction or activity involves two people
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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?
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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)
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
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Fundraising: Strategy
• Success requires board provide overall strategic guidance & direction
• Based on strategic plan, board defines application of financial & human resources
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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
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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
16UWCES Community Development Education
Fundraising: Strategic Planning (cont.)
• SMART strategic goals– Specific– Measurable– Attainable– Related– Time-based
*SMART GOAL HANDOUT
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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
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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
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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
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
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?
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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