Nonprofit Financial Policies
The Board of Directors have a fiduciary responsibility to the agency and its donors. All assets need to support the mission of the agency and ensure the donor's intent. All boards should adopt financial policies for financial management.
Policies will help to clarify roles and responsibilities and ensure there isn't a conflict of interest within the agency. Policies can include items such as expense reimbursement, gift policies, who does what with cash being accepted, investment policies, annual review of compensation, and the roles of the CEO vs the Board vs the finance committee.
Here are some examples of policies nonprofits should consider:
- Gift policy
- Conflict of interest
- Leadership compensation
- Bonus structure for staff
- Investment policy
Why do I need a CFO?
You didn't start your business or become the head of an organization because you are a financial expert. You are there to grow and succeed. The accounting, bookkeeping and financial aspects of your business are important to how you run your company, but it is time consuming and if not done properly, can lead to more headaches down the road.
Keeping track of your bookkeeping and your financial statements is time consuming and difficult to manage. But most frustrating is understanding and interpreting your financial picture from reports. CFOs are responsible for timely and accurate presentations and financial reports in order to capitalize on your growth.