A treasurer is a key position in any organization. In the nonprofit sector, the treasurer usually helps the board navigate the finances for the organization and reports on them to ensure that the nonprofit organization can fulfill its mission. The treasurer generally reports to the board of directors, presenting financial information to the board throughout the year. It's typically a supporting role in the organization rather than a salaried position itself.
The treasurer's responsibilities should be outlined in the bylaws of the organization, but in general, the treasurer's main duty is to keep track of the financial aspects of the 501(c)(3) nonprofit organization. They are responsible for maintaining the organization's finances and financial stability.
Treasurer duties may include tracking the income and expenses of the nonprofit and preparing an annual report for the board of directors, donors, supporters, and any interested public party. A treasurer also needs to know where money is coming from and where money is going.
The treasurer should be an experienced business person who knows how to manage money and has an understanding of how to keep accurate records. The treasurer should also be aware of any outstanding bills or debts, as well as who can access the funds inside the organization. We'll examine the duties and responsibilities of a nonprofit treasurer below.
The treasurer should review the organization's annual budget, which is a document that outlines the projected revenues and expenses for the upcoming year. Having a budget helps nonprofit organizations understand where their money is coming from and where it's going. A budget can also help define the organization's priorities. If your nonprofit doesn't have a clear budget, you may be spending your money in a way that does not align with the organization's mission.
The treasurer should review the budget and have it approved by the nonprofit's board. Although the board is ultimately responsible for the budget, treasurers should be prepared to explain and justify the budget recommendations as well as the financial statements.
The purpose of these various financial reports is to inform the board, donors, and supporters about how the nonprofit is performing financially. Financial reports are critical in any organization because they play a vital role in helping management make decisions.
Financial reports usually include budgets, bank account statements, comparative Income Statements, Balance Sheets, and cash flow statements. They also include tax documents, such as your IRS Form 990.
While the treasurer is primarily responsible for ensuring the financial well-being of the nonprofit, they are also responsible for ensuring the organization's ongoing solvency by overseeing the systems that are in place. Treasurers would be part of the development of the organization's financial policies, working with the executive director to ensure that the organization has the sufficient cash flow to cover its expenses.
The treasurer will have access to all financial records within the organization. It is their responsibility to maintain compliance, which means following all financial reporting rules and regulations set by the organization's governing body.
The treasurer should make sure that the organization's accounts are protected from theft and fraud. The treasurer also needs to ensure that the organization's property is properly safeguarded. It may be necessary to have a finance committee to make sure that all financial matters are handled appropriately and that the organization's financial statements are accurate and up to date.
Nonprofits should establish internal controls, such as the separation of duties to ensure that no single individual has too much access to the organization's funds. They should also use dual signatories on spending accounts, and keep careful documentation of all incoming and outgoing dollars to build a strong paper trail of the organization's finances.
Treasurers are responsible for reporting on and interpreting financial data for the board, especially when the Chief Financial Officer isn't available. Board members who are not financially savvy may feel intimidated and uncomfortable asking financial questions. Treasurers need to be able to explain financial concepts clearly to board members so they can understand them. In doing so, board members will often feel more comfortable asking financial questions and participating in financial discussions, which can benefit the organization as a whole.
Aplos provides helpful resources, but it is not meant to be a substitute for professional services. Always consult a CPA or trusted professional when seeking tax or accounting advice.