The Nonprofit Treasurer

Your Core Responsibilities: The Fiduciary Duties

• Steward the Budget: You lead the creation, monitoring, and reporting of the annual budget. You translate board decisions into a financial plan and track progress against it.

• Safeguard Assets: You implement and oversee internal controls. This means separating financial duties, authorizing payments, and regularly reviewing bank statements to prevent errors or fraud.

• Ensure Compliance: You are responsible for filing accurate Form 990s and maintaining state charitable registrations. You ensure spending follows donor restrictions and manage the annual audit process.

• Report with Clarity: You present financial statements to the board in an understandable way, connecting numbers to program impact. You prepare clear reports that tell the financial story to staff and stakeholders.

The Nonprofit Difference: Key Things to Know

For-profit accounting principles don’t fully apply here. You must master fund accounting, where money is tracked in separate buckets based on donor restrictions (unrestricted, temporarily restricted, permanently restricted). Software or dedicated fund accounting systems is necessary, not optional.

Your public reporting, especially the Form 990, is a transparency document. Donors, watchdogs, and grantmakers use it to judge your credibility and efficiency.

Building an Effective Financial Practice

Start by reviewing your last three board financial packages. Were they clear? Did they highlight cash runway and program cost ratios? Next, walk through your payment process: who approves invoices, who signs checks, who reconciles the bank statement? Ensure no single person controls all steps.

Develop a simple dashboard for board meetings. Focus on three things: Cash Position (can we pay our bills?), Budget Variance (are we on plan?), and Program Efficiency (what percentage of expenses go directly to our mission?).

Connect finances to mission constantly. When reviewing reports, ask: “Do these numbers show we are effectively resourcing our goals?” Your ultimate job is to provide the financial confidence that allows the organization to focus on its purpose.