Fiduciary Responsibility
Section 5 (Items 41-50) of the
Annual Checkup: A Board Government Self-Assessment
Annual Checkup: A Board Government Self-Assessment
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41. The budget is your group's statement of priorities and plans for the future. It deserves a lot of board time and attention. Here's a good checklist of budget items to discuss from the Nonprofit Assistance Fund.
42. Financial reports don't have to be overly complicated. Here's a simple example offered by the Charities Review Council. BoardSource chimes in with this fabulous blog explaining what board members need to understand about financial statements. NEW! The new requirements established by the Financial Accounting Standards Board has many nonprofits and their accountants scrambling in 2018. Here's a great primer from the National Council of Nonprofits. 43. Restricted funds are generally program-specific. Organizations also need unrestricted, general donations for organizational costs. The Nonprofit Assistance Fund did a nice overview on Managing Restricted Funds. 44. Kate Barr of the Nonprofit Assistance Fund has done a nice blog post on What Makes a Great Nonprofit Treasurer. For boards with a full finance committee, this BoardSource article on Finance Committee Fundamentals is helpful. 45. Board members who are confident in their understanding of the financials are more likely to bring up concerns. Here's a nice article from Bridgespan on How to Talk About Finances with Nonfinancial People. |
46. When it comes to providing a clear road and criteria for high quality organizational performance, perhaps there is no better resource than the Baldrige Foundation. Here's their Baldrige Performance Excellence Framework.
47. Fiscal responsibility means having strong financial systems and policies in place. Internal controls are not optional. CompassPoint's Checklist is a good place to start. The American Society of Association Executives has published a helpful Investment Policy. The Charities Review Council comes through with a great template for Reimbursements Policy. This Sample Set of Financial Policies was put together for a small nonprofit in Ohio by The Board Doctor's predecessor consulting firm. 48. The Nonprofit Assistance Fund put together these Financial Policy Guidelines to help boards get started. 49. Boards of smaller organizations often struggle with the question of whether or when to commission an external audit of their books. The National Council of Nonprofits put out a great guide. Click here to follow the link. BoardSource's contribution is a description of the Audit Committee's Responsibility. 50. Thank you Blue Avocado for putting together this Board Members Guide to Nonprofit Insurance. Here is BoardEffect's blog called The Value of D&O Insurance. |
Additional Resources:
- Our national nonprofit leadership is in consensus that wrong ideas about administrative costs is keeping the sector under-resourced and weak. Here is a primer published by Guidestar about busting the overhead myth. Stanford's Social Innovation Review weighs in with classic piece called The Nonprofit Starvation Cycle and also this one on Caps on Indirect Costs are a Misguided Invention. BoardSource did a nice article on Discussing Overhead Expenses in the Boardroom.
- The Nonprofit Assistance Fund put together a great brief on The Characteristics of Financially Healthy Nonprofits. (Hint: Board members are involved.)
- How can board members and managers work together to minimize risk? Here's the view from BoardEffect.
- Need a template for a budget? Have a look at this one from CompassPoint.
- Love this info from Charity Lawyer Blog about the Top Five Nonprofit Legal Risks.