Educate. Enrich. Enhance. Engage.

I work with nonprofit organizations throughout the country. Every single one of them should follow these simple principles of reporting to their Board.

Here are some useful tips for you to consider for your own organization.

FINANCIALS: The Board of Directors are THE responsible party for reviewing the financials. Best is monthly. Even if your organization meets quarterly, monthly financials are important enough to be reviewed on a monthly basis. This is also listed in Sarbanes-Oxley as the Board's responsibility.

VOTING ON FINANCIALS: Unless you, Mr./Mrs. Board Member, have a CPA license and have done an audit review of the books in any given month, financials are NOT voted to approve at the Board level. Yes...the Board has every right and every authority to review the monthly financials and have discussions. What they should NEVER, EVER do is to "vote to approve the financials" by way of motion. They merely "place the financials on file for audit". I have seen this one thing blow up in organization's faces when going through a full audit.

DASH BOARDING: The dash boarding of these financials can be made a LOT more simple for the Board to understand. Remember, they are not doing the day-to-day operations so they will need some type of context to give them a better understanding. Such as: Profit & Loss, Budget vs. Actual, Cash accounting versus Accrual, Balance Sheet. If you work in QuickBooks, these are easy reports to generate on a monthly basis.

BUDGET: For the love of everything holy, DO generate a working budget for your organization every single year. Still blows my mind that there are nonprofits who do NOT have a budget. How the hell do they know their income/expenses? I prefer the Treasurer of the Board, Board Chair/President and the Executive Director/President & CEO to help prepare the budget for Board review and acceptance.





The budget, once prepared, can be uploaded into QuickBooks which can produce monthly statements of income/expenses that follow the budget document.

Budgets are breathable/variable documents which means that during the year if new expenses float in, the budget can be reopened by the Board, numbers adjusted, and closed by the Board. The Board must vote to reopen and vote to close. We all know that odd expenses may creep in that needs to be taken care of.

BOARD OF DIRECTORS VOTING: Every single vote by the Board of Directors should be in line with the organization's Mission Statement and the votes are to move the organization forward.

When I am hired to sit through a Board meeting, I am still shocked when I hear them voting on things that have nothing to do with their nonprofit. Stop. Doing. That. Mission creep is a real thing. Creeping off your mission can cost you more than you realize.

NO POLITICS: Both 501c3 and 501c6 organization are still under the Johnson Amendment and it is damn clear about NO politics including lobbying. Now, if your nonprofit is in the business of politics such as a Political Action Organization, then you follow the regulations surrounding that distinction. Some Chambers of Commerce organizations have PAC's. Separate agendas, separate Boards. Chambers may also accept political candidates as members and yes, they can purchase email blasts as long as the Chamber itself adds a disclaimer at the bottom of their eblast.

Everyone else needs to adhere to this Amendment. It's not that hard. Plus, no matter what you do, at least 50% of your audience will be ticked off. Just stay away from it all together.

Bylaws, Legal Policies: Keep them both updated on a yearly basis. These documents can keep your organization in compliance. One time per year!

Thanks for reading,

Sally