Working with the Treasurer and Finance Committee

Each month, Nonprofits Assistance Fund hosts the Financial Management Network.  These free, informal gatherings are opportunities for members of the nonprofit community to get together to discuss different financial topics and network with peers. Key takeaways from these discussions will be posted and form an archive to help promote healthy financial practices.

Working with the Treasurer and Finance Committee (7/22/09)

Kate Barr's article for Nonprofit World, Make Good Use of the Treasurer & Finance Committee, includes the advice: "Don't waste these valuable resources." Knowledgeable treasurers and finance committee members can provide strategic financial leadership and key guidance to staff and other board members. 

The Treasurer

Roles and Responsibilities

The legal role and responsibility of the treasurer is spelled out in the organization's bylaws: Maintaining accurate accounting records and bank accounts, and reporting on financial results to the board.

In reality, things are more complicated.  The actual duties of the treasurer will vary depending on an organization's size.  You may even hear widely different answers as to the treasurer's role between organizations and sometimes within organizations. A former treasurer remembers, "She looked at me in disgust when I didn't know the answer to her question, she thought it was my role to know every line item in the budget!"

For all of these reasons, it's important to clarify roles and responsibilities.

Responsibilities Often Include

  • Oversight of financial staff, alarm sounder
  • Financial/operational duties, e.g. sign checks, bank reconciliation
  • Leadership of finance committee
  • Assures board of financial compliance
  • Analysis/interpretation of financial information
  • Accountability/transparency

Finding/Recruiting Treasurers

Good treasurers are hard to find.  In some organizations, if you miss a board meeting you end up as treasurer. Finding qualified and committed individuals to serve this important function, and then giving them the tools and training they need to be successful, is critical.  

Sample Treasurer Descriptions

What Makes a Treasurer Effective?

  • Understanding financial reports and information and the ability to communicate the information to the board.
  • History with an organization can help a treasurer be effective
    • Need to understand programs, priorities, and organizational culture
    • Know the particulars of the organization's finances, restrictions and requirements
  • Treasurers need training
    • Can be an intimidating position if treasurer lacks knowledge
    • Treasurers often come from the for profit sector (bankers, CPAs, etc)
      • There are significant (and important) difference between nonprofit & for profit finances
      • Without proper training, a treasurer from the business world may try to apply rules that are not appropriate

The Finance Committee

The finance committee also might play different roles in different organizations.

roles of a finance committee

  • Oversight of budget, financial statements, banking, investments
  • Accountability
  • Develop financial policies and procedures
  • Hire/review auditor at the board's request
  • Strategic financial leadership, big picture
  • Risk management

Financial Information for the Board

  • The board holds fiscal responsibility for the organization
  • Read the Duty of Care on the attorney general's website
  • How early do staff give information to the board?
    • Couple days early
    • Our board requests one week
    • Some board members call the Director of Finance with questions prior to the meeting

Working with the Board and Staff

Treasurer's Relationship with Board

  • Treasurer makes sure board gets accurate, timely information to make decisions
    • May serve as an adviser to the board - this is where we as an organization are coming from and this is where we're going
    • Create or interpret a narrative
    • Make link between money and programs
  • Treasurer helps stop board from getting stuck on details

The finance committee's relationship with the board

  • The finance committee can drive financial discussion at the board level
  • Make sure entire board hears from the committee
  • Board should get minutes from committee meetings - your auditor will read these
    • Some committees may give dashboard reports or a summary instead of full minutes

Treasurer's relationship with staff

  • As a staff member, how do you feel when the treasurer is making his/her report?
    • A feeling of shared leadership
    • Shows other board members that one of their peers is taking responsibility
  • Executive Directors often have great leadership skills, but may lack financial skills, the Treasurer can offer assistance
  • Treasurer may be part of the internal controls structure, with direct accountability
  • May be involved in reviewing assets, financing, contracts, insurance
    • In some organizations, finance-related responsibilities end up in treasurer's lap, with no other place to go
  • In larger organizations with professional financial staff, the Treasurer doesn't have direct responsibilities
    • "Functionless"
  • Treasurer might step in if staff not doing well

Communication between treasurer and staff

  • It can be difficult for treasurers to raise hard questions of staff who are clearly overloaded
  • Staff report trouble communicating with treasurers who are very busy
  • Treasurers might communicate through the Executive Director, or with financial staff
  • Direct contact with financial staff can be helpful
  • Quickbooks has an online system - Quickbooks Online
    • Up to 100 people can have access, including treasurer, program people, etc
  • Treasurer and staff (may include Executive Director and financial staff) should work together to write agendas and lead discussion
    • In practice, staff often drive the process

Encouraging Financial Discussion

  • Board members should be asking big picture questions
  • Our finance committee doubled in size, and with more people thinking about finances, the treasurer stepped up and wanted to show what he knew
  • One participant specifically mentioned the board training from Financial Clarity for Nonprofit Boards
    • Put everybody on the same page and evened the playing field
    • Before, our board was split between people who understood finances and people who did not
  • Treasurer, accountant, controller, strategy person (Executive Director) should all meet regularly to discuss financial performance
  • Our discussion of insurance and risk assessment framed as "consulting project" for the finance committee - a project was more exciting for them than the same old review

Other Useful Resources

Interested in Learning More?

View our Resource Collection or check out the Discussion Archive for notes from other Financial Management Networks.


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