Balancing the Mission Checkbook

What makes a great Board Treasurer?

Mike Burns posted an entry on his Nonprofit Board Crisis blog this week about the important and underrated role of the board secretary. I’ve been thinking along the same lines about the board treasurers. A couple of weeks ago I was asked by a friend who had just become board treasurer for a nonprofit what they should learn or read to become good at the job. I suggested a couple of workshops, articles and blogs. Shortly after that conversation I attended a board meeting of a nonprofit to talk about their financial reports and learned that they don’t have a treasurer. No one wants the job. I worked hard to make the role sounds exciting and glamorous, but I don’t think that anyone was buying it.

If you read the by-laws of most nonprofits it’s no wonder that the role is seen as dull and/or daunting. Here’s an example from one of many templates available:

The Treasurer, subject to the order of the Board of Directors, shall have the care and custody of the money, funds, valuable papers, and documents of the Corporation and shall have and exercise, under the supervision of the Board of Directors, all the powers and duties commonly incident to such office. The Treasurer shall deposit all funds of the Corporation in such bank or banks as the Board of Directors shall designate. The Treasurer may endorse for deposit or collection all checks and notes payable to the Corporation or to its order, may accept drafts on behalf of the Corporation. The Treasurer shall keep accurate books of account of the Corporation’s transactions which shall be the property of the Corporation, and shall be subject at all times to the inspection and control of the Board of Directors.

This sounds like the bookkeepers’ job description with legal responsibilities. I can tell you that even as a person with good finance and accounting experience I don’t want that job. Fortunately, nonprofits that are large enough to have paid staff to handle accounting and daily financial management don’t need the treasurer to make deposits or keep the books. What they need is a board treasurer who is willing and able to provide leadership in the financial life of the organization.

That financial leadership requires a combination of skills and characteristics. A great treasurer balances these responsibilities:

  • Knowledge – Thorough understanding of the financial reports. It helps to have some financial background, which may require some supplemental training in nonprofit financial terminology and requirements.
  • Communications – Able to translate financial information and financial concepts for the board. The treasurer doesn’t necessarily have to present the financial reports at board meetings, but they may need to help to explain and re-frame until everyone understands the reports. It’s also the treasurer’s role to interpret and translate the board’s questions, goals, or concerns about the financial information or financial situation to the staff.
  • Planning – Partner with the staff leadership to develop a useful budget. The treasurer can bring great value in preparing for budget discussions and conveying budget information to the board. Budgets are the financial version of an annual or strategic plan and the treasurer is in the best position to make sure that budget priorities and decisions reflect the intentions and objectives of the board.
  • Strategy - Great treasurers go beyond annual budgets, audits, and financial reports to bring financial leadership to the organization. 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.

Come to think of it, I think it sounds pretty exciting and glamorous. Sign me up.

 

Kate Barr believes that every nonprofit financial question relates to strategy, structure and mission impact. She enjoys interpreting financial information to find stories numbers can tell. She loves writing, teaching, and talking with interesting people.