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Nonprofit Accounting Basics
To avoid or diminish financial and accounting risks that might threaten the organization’s existence or decrease its effectiveness, the board needs to be aware of proper financial processes and pra
The board is the accountable and liable body for the organization.
There is no federal law that prohibits nonprofits from compensating their board members but some states may forbid compensation for board service.
Bylaws form a legally binding document that outlines the organizational authority levels, how the board functions, and how it is structured.
One of the most constructive and proactive ways a board can send a message that its organization is committed to accountability, responsiveness, and stewardship is to draft a code of ethics to guid
One of the legal obligations for board members is a duty of loyalty. One aspect of this duty expects board members to keep confidential issues confidential.
A conflict of interest arises when a board or a staff member is in a situation where his decision making may be impaired by personal, financial, or other busin
Reserves have been a topic long debated amongst management and boards alike. What are reserves? What’s so important about reserves? How much is enough? These are hard questions to answer.
Directors and Officers (D&O) liability insurance is an extension of all the other protection mechanisms for board members and the organization.
An endowment refers to a fund or funds that are generally kept permanently. Their interest income provides for the overall operations of the organization.
The board must ensure adequate resources to allow the organization to carry on its mandate. Financial resources feed into the health and stability of the organization.
In our article “Confused About Reserves?”, we explored different ways an organization might define its reserves.
The purpose of the general liability insurance is to pay for damages that the organization is liable for and to cover legal costs for its defense.
A gift acceptance policy allows the board to define the parameters and guidelines for eliminating controversial or risky donations. Unwelcome donations might include gifts that:
As you work with confidential financial data and personal information performing your daily business tasks, follow these straightforward guidelines to help maintain information security and be a mo
Through incorporation the board and the managers create a legal entity that will protect them from potential personal financial losses.
By incorporating your nonprofit you create a legal entity whose primary function is to provide limited personal liability protection to those managing the organization.
Indemnification is the organization’s direct expression of willingness to protect its board members (and its senior staff) from the financial burdens of liability.
Board members must realize they have personal expectations and responsibilities for their board service.
Investment policies refer to policies the board has defined and/or approved guiding how the various organizational funds should be invested.
To protect the organization, itself, and its members, the board must start by following the legal obligations common to all boards: duty of care, duty of loyalty, and duty of obedience.
Over the last two months, we have explored different ways an organization might define its reserves and the importance of establishing and maintaining those reserves.
Nonprofits spend a lot of time and energy reviewing financial data.
A board officer is a board member with additional duties and responsibilities. State laws stipulate which officer positions a nonprofit must have.
As the fiduciary of the organization, the board as a body and each individual board member must always act for the good of the nonprofit.