Knowledge, Communications, Planning, Strategy.
By Michele Colopy
The Treasurer of any all-volunteer organization has the most daunting of “job” duties. Yet the treasurer “plays a critical role in sustaining the organization, maintaining essential stakeholder confidence and supporting overall mission effectiveness.”1 The treasurer “provides the leadership in the financial life of the organization.”2 Treasurers for all volunteer nonprofits need a “combination of skills and characteristics” to balance the following responsibilities as defined by blogger, Kate Barr:
- Knowledge- Thorough understanding of financial reports.
- Communications- Able to translate financial information and financial concepts for the board.
- Planning- The treasurer can bring great value in preparing for budget discussions and conveying budget information to the board.
- Strategy- Great treasurers look down the road to find the financial options and decisions needed for longer term goals and initiate discussions to connect finance and mission.
Treasurers, and their supportive finance/audit committees, are accountable, and desire transparency for the utmost integrity. Accountant Dennis Walsh lists the Eight Key Responsibilities of treasurers:
- Handle the money with high standards and set a tone of integrity.
- Manage the filings for the IRS 990 annual reporting, as well as any state filings by nonprofits. Additionally, speakers for bee clubs and conferences are required to complete W-9s for any paid services to the nonprofit by non-employees. Also, check your state for the regulations concerning raffles: Kansas did not allow nonprofits to conduct raffles until last year.
- Identify and manage risk. Talk to an insurance agent who specializes in nonprofit coverage. It is the cost of defending yourself due to an accident at a bee club activity that can decimate personal finances. Directors and Officers Liability insurance can be costly, but so much cheaper for you and your fellow Board members if a legal action is filed against you and the bee club.
- Confirm contributions. Whether it is via email or a typed and mailed thank you note – thank your donors, acknowledge their support of your organization, show your appreciation of their faith in you to manage their donation well.
- Track volunteer time. The annual IRS 990 report asks the average weekly hours of each Board member, so track it. Volunteers at the bee club’s County Fair Honey booth, at school beekeeping presentations, at meetings to determine your State Pollinator Plan all add up to commitment, time, energy, and volunteer matching hours that can be used as “in-kind” support to the nonprofit. Tracking the time is second though to recognizing your volunteers, and all that they do for the bee club. A “thank you” is invaluable!
- Plan and evaluate with a budget. “Preparing an effective budget starts with asking leaders to estimate what they’ll need and to provide specific proposals for financing it. . . Expressed in financial terms, a budget is a map that shows what you plan to do and how you plan to get there. It’s a key tool for getting everyone to agree on what your group will and won’t do in the coming year.”
- Prepare timely financial reports. Timely and reliable financial reports support “good stewardship and sound financial decision making” in order to track budget performance.
- Recruit the next treasurer. “Like other volunteers, the treasurer will not serve indefinitely. Unfortunately, some all-volunteer organization treasurers entrench themselves and resist transfer of control. Throughout their term of service, effective treasurers encourage and equip fellow volunteers to participate in financial management duties. When it is time to pass the baton, these all volunteer organizations will enjoy the least disruption.”
All board members should work with the treasurer toward their own financial literacy. Far too often Board members will sit in a meeting and act like they understand the budget and financial reports. They need to understand them; it is their fiduciary responsibility to the bee club, and to the members who elected them to the Board. The National Council of Nonprofits has a number of helpful guides to assist Board members with their financial literacy. (see the end of this article for links) Board members need to understand the financial guidelines when accepting grant funds, donor restricted funds, and awarding valuable member donations to others for research or special projects. Boards are accountable to the membership, and to the IRS, and to their State Attorney General for the management of the nonprofit bee club’s monies. Board members need to be aware that IRS 990 annual reports are public record easily accessed through the IRS Business Master File online, or even at websites such as Guidestar. What are the public disclosure guidelines for your state? Do Board members understand financial terms and the difference between a balance sheet and a profit and loss statement? What internal controls does the bee club have to control the funds; what are your checks and balances to ensure the donations and member dues are protected?
Lastly, Boards need to understand the meaning of an audit. Far too many bee clubs simply perform a comparison of receipts and checks and the bank statement by two other Board members at the end of the year. That is not an audit! An audit, or “audited financial statements” refers to “the work product resulting from the independent examination of a nonprofit’s financial records by a licensed certified public accountant.”5 “As an alternative to an independent audit, auditors can provide either a financial statement “review” or a “compilation.”” These are not substitutions for an independent audit, but may be suggested in lieu of the costly audit requested by a funder. During the review, the auditor only reviews the nonprofit’s financial statements, but does not examine internal controls; so transactions by the organization are not reviewed and validated. A compilation simply compiles the financial records “into a format required by accounting standards.”6 Audits are required at certain financial thresholds by registered nonprofits in each state; and each state has their own financial threshold. Check with your State Attorney General/Secretary of State for your reporting thresholds which trigger an audit. Some funders may require an audit, and will specify such in the grant application, and the grant contract. Nonprofits receiving more than $750,000 in federal grant funds are required to conduct an audit. If you have questions concerning your audit thresholds, consult a CPA. The resources in the Nonprofit Audit Guide are offered for informational purposes only, as is this article. This author, and the National Council of Nonprofits recommend consulting a lawyer or accountant who has expertise in accounting rules for charitable nonprofits so that you can be confident that your charitable nonprofit is in compliance with all legal requirements.
Treasurers of All-Volunteer Organizations: Eight Key Responsibilities, Dennis Walsh, CPA, page 5, http://www.blueavocado.org/content/treasurers-all-voluneer-organizations-eight-key-responsibilities
What Makes A Good Board Treasurer? Kate Barr, Nonprofits Assistance Fund, page 2, https://nonprofitsassistancefund.org/blog/2010/09/what-makes-a-great-board-treasurer
Treasurers of All-Volunteer Organizations: Eight Key Responsibilities, Dennis Walsh, CPA, page 4
Ibid, page 5
Nonprofit Audit Guide, National Council of Nonprofits, https://www.councilofnonprofits.org/nonprofit-audit-guide
Financial Literacy for Nonprofit Boards, National Council of Nonprofits, https://www.councilofnonprofits.org/tools-resources/financial-literacy-nonprofit-boards
Michele Colopy is the Program Director for the Pollinator Stewardship Council. She holds a Master’s degree in Arts Administration/Nonprofit Management from The University of Akron, and has created, revitalized and held leadership roles in nonprofit organizations for 20 years.