Almost all nonprofit organizations have a finance committee and most mid to large size nonprofit organizations have an audit committee. However, for most nonprofit organizations, these two very important committees exist in name only with little to no “Thoughtful Structure” or working rules to guide them.
Enhancing and empowering these committees with a “Strong Sense of Purpose” will positively impact organizational financial health, improve utilization of financial resources, foster financial oversight and monitoring, and help your organization to better position strategically to advance on mission delivery now and in the future.
The key elements to consider are adding the following component parts and objectives to your finance and audit committees:
- Purpose – the “Why We are Needed as a Committee”
- Structure – clear “How We Will Work as a Committee”
- Working Rules and Work Plan – the “How the Game will be Played” – Big help to the Committee Chair
- Role with Governance – Reporting of Information, Approvals vs. Recommendations and Coordination between Board and Other Committees
- Compliance Roles, Stewardship and Oversight – the “How Does the Committee Fit In To the Internal Control and Risk Assessment Structures”
- Strategic Roles and Related Interactions with Management and the Board – the “How do We Make a Difference in the Future”
The use of these key component parts and objectives will make serving on these committees meaningful to both the committee members and the organization they serve.
One last thought; give these important committees the opportunity to shape the future and not let them live only in an oversight and “looking back role”. The key for these committee members is having a role in steering where the organization will go in the future and vesting in their ownership of this important role.
A. Michael Gellman, CPA, CGMA, is an independent Fiscal and Financial Strategist (CFSO) for Nonprofit Organizations and a founding principal partner for Fiscal Strategies “4” Nonprofits, LLC where the primary focus is helping legacy organizations and new organizations build and achieve a sustainable and financially healthy future. Mr. Gellman was a former 20-year Shareholder for Rubino & Company, Chartered, CPA’s and Consultants. Mr. Gellman has more than 35 years’ experience in nonprofit fiscal, financial and accounting systems working as a chief financial, fiscal and management consultant where he has focused on specialized management and advisory services for trade and professional associations, public charities and endowment based foundations. Mr. Gellman has also developed comprehensive budget and projection-based systems in support of senior management and organizational leadership.
For more information about Mr. Gellman and the courses in nonprofit finance, budget and management he teaches, please contact him directly at firstname.lastname@example.org