I recently delivered a presentation at the Essex County Institute for Trustees, a full day conference for board members and executive directors of nonprofit organizations. While the subject I covered, nonprofit finance, is by no means a new subject, many organizations still struggle to optimize their operations in order to make the most impact with limited financial resources.
Overall, financial and operational reviews help to deliver insight, allowing organizations to look beyond budgets and expenses summaries into staffing, policies, and processes. Only after learning to assess the financial viability and effectiveness of an organization’s programs can an executive director or board member develop the financial insight they need in order to make strategic decisions.
The presentation, slides of which are available here, is designed to answer the following 10 questions:
1) As a board member or executive director, why should you care about finance?
2) How do budgeting and financial reporting help you determine the financial effectiveness of programs?
3) Specifically, what financial ratios should you review to analyze an organization’s financial viability?
4) What are the most common financial pitfalls that organizations should avoid?
5) What are examples of policies, procedures and checklists, and how can they be used to prevent organizational fraud?
6) What is one example of how proper internal controls can limit fraud?
7) What is a financial operations review and how can it help an organization?
8) What are some of the common challenges faced by nonprofits trying to address gaps in their organizations?
9) How can accounting outsourcing, shared services, and diligent system selection help address gaps in organizational operations?
10) What are some best practices for being a knowledgeable, engaged board member?