The finance committee chair is most often the board treasurer, whose specific duties are usually described in the organization’s bylaws. In practice, these duties can vary considerably from a hands-on role, in the case of the “working board” model, to a more supervisory role where transactions are largely handled by staff.
The chair of the finance committee makes sure the committee does its job. Specific duties of the chair include:
Processing the request for payment is the same whether writing checks or making wire transfers or ACH (online) payments. However, the method of making the payment differs.
When making a wire transfer or ACH payment, all documentation and authorizations necessary for any disbursement should be obtained prior to making the transfer. Further, a form should be developed that can be completed by the vendor showing:
How much cash do we have? How much cash will we have? Is there a point where we may run out? What can we do about it now? These are questions an organization’s board and management will be able to address if they make the effort to budget for and project cash flows.
Good internal reports are accurate, timely, and readable. They present relevant financial information, with enough context (numeric data, comparatives, projections, and narrative) to promote a thorough understanding of your status, and what actions may need to be taken.
Formatting reports for maximum readability is an important consideration that is often overlooked. Be kind to your audiences: board members, finance committee members, staff managers, or other stakeholders will appreciate it if you follow the formatting tips below:
If at all possible, an individual other than the person writing checks and making deposits should reconcile the bank account each month. Many organizations hire an outside accountant or bookk
No matter how small your organization is, following solid financial management procedures makes good sense. Doing so helps ensure the staff and board of the organization are fulfilling their stewardship responsibilities and makes it more likely the organization will be sustainable for the long term and able to continue to fulfill its mission. Establishing and regularly updating good financial policies and procedures when the organization is small positions it to grow smoothly without needing to completely redesign its financial operating systems.
Personnel costs are often the largest portion of the budget for most small and midsize nonprofits. Folks who work for small and midsize nonprofit organizations generally are intensely devoted to mission accomplishment, sometimes working longer hours at lower pay than their for-profit counterparts. They deserve good tools and ongoing professional development opportunities and skills training. Budgeting to provide equitable pay and benefits for staffers is also a way to keep those well-trained folks with you.
