The nonprofit treasurer duties include overseeing the organization’s finances and making sure that there are enough funds to pay all expenses, as well as looking into ways to raise more money.
Key finance responsibilities
- Understanding fiduciary responsibility and how it relates to nonprofit organizations.
- Identifying the importance of a sound financial system for nonprofits, including cash flow management.
- Reviewing the importance of understanding the tax implications.
- Understanding how to develop a nonprofit accounting system and maintain proper records.
- Using about financial tools such as budgeting, forecasting, and benchmarking.
Let’s take a deep dive into how to find the right nonprofit treasurer with relevant skills and knowledge.
Does a nonprofit have to have a treasurer?
A nonprofit organization may or may not need a treasurer. A treasurer is a member of the board of directors who is in charge of the finances. Therefore, they should be aware of how to manage money appropriately and responsibly. They are responsible for overseeing assets and liabilities so the organization doesn’t operate at a loss or spend too much money.
Nonprofit board member
State laws determine which officers for the board of directors are required. Boards can add officers and tasks if they choose to. For most nonprofits, the board elects officers among themselves. The bylaws typically decide whether the treasurer has to be a member of the board.
Distinction between accountant and duties of treasurer of nonprofit organization
The person who manages finances does not have to be the treasurer. This job can be handled by anyone who is either a nonprofit accountant or bookkeeper. However, since nonprofits focus on fundraising, it is important to have a competent person fill the board position of treasurer. Some smaller nonprofits are not required to have a treasurer, but it is in their best interest to have a treasurer on the board.
Purpose of a nonprofit treasurer
The purpose of a nonprofit treasurer is to provide financial oversight and management and work closely with the executive director. The responsibilities can be extensive, so it’s important that the right person with relevant skills and knowledge is in place for this position.
Successful candidates for this position are generally certified public accountants or have a similar designation, such as the Certified Management Accountant. Others may be interested in pursuing nonprofit administration certification programs at their local community college.
Difference between nonprofit and for-profit treasurer
A nonprofit treasurer is in charge of overseeing the finances and accounting for an organization, making sure it has enough money to cover all its expenses. The needs for nonprofits are different than those at for-profit businesses.
Role of nonprofit treasurer
The treasurer of a nonprofit is usually a board member. Nonprofit treasurers are responsible for overseeing the finances of their organizations. They ensure all income and expenses are accounted for accurately. They also need to maintain an accurate record of all funds, including investments.
Nonprofit board member treasurer role
- The treasurer approves major expenditures
- Signs large checks and some smaller ones. Two signatures are required on checks over a certain amount with one being the treasurer.
- Prepare, generate and present financial reports at board meetings
- Prepare treasurer’s report for board members.
Oversee funds and investments
The treasurer is responsible for investing funds and managing liquid assets. For example, cash or short term investments that can be quickly turned into cash to meet current or near-term needs. The treasurer also ensures that the nonprofit’s financial records are accurate and up to date. They must monitor proceeds from fundraising campaigns or other sources in order to make certain funds are used for its designated purpose for accountability.
Treasurer duties of non profit
The right nonprofit treasurer will have strong financial skills, an understanding of the tax laws that affect nonprofits and a proven track record in finance.
Oversee financial administration
The treasurer is a mastermind for future opportunities, risks, and tax implications of financial plans.
This includes understanding the following duties of a treasurer of a nonprofit organization:
- The financial system for a nonprofit.
- How taxes work in order for a nonprofit not to lose money on them, specifically when you’re talking about nonprofits.
- Nonprofit accounting system and maintain proper records.
- Financial tools a nonprofit treasurer would need is budgeting, forecasting, and benchmarking.
Board member duties
As for duties as a board member, the treasurer is responsible for:
- Keeping the board informed on grant, proposal, investments and plans regarding unexpected funds and/or cash flow shortages.
- Reducing unnecessary expenses and making the most of your fundraising efforts with real-time, actionable financial data. Management accounting helps directors of non-profits make data-driven decisions.
- Knowing how their organization is performing and what they can do better in order to take it to the next level.
Review and enforce policies
One of the primary responsibilities is safeguarding nonprofit’s finances. Rules can be set up in an accounting system to make things more efficient. The treasurer also ensures the organization complies with all regulatory requirements and reporting obligations. They are accountable to overseers, funders and other stakeholders.
Create a budget
To create a budget, the first step is to collect and understand all of the organization’s financial data. This includes fundraising revenues (in cash or pledges), investments, grants, program revenue, and program expenses.
The next step is to figure out a budget for the coming year by estimating what the organization will need in order to provide its services, as well as any new programs or activities.
As treasurer, you’re responsible for generating accurate and compliant financial reports. These include: Statement of Financial Position, Statement of Activities, Statement of Functional Expenses and Statement of Cash Flows.
A nonprofit treasurer must be knowledgeable about handling money, understand finances, and know how to do these things without losing money. Most importantly, the duties of the nonprofit treasurer ensures the organization has enough money to operate and grow. They must know about accounting systems, how to maintain budgets, and forecasting the organization’s future success.
Want to read more? Check out these insightful articles:
Did you find this article useful? We welcome your thoughts and comments.