How to Manage Finances for Community Organisation Board and Committee Members
Navigating the labyrinthine financial landscape of not-for-profit and charity organisations can pose an arduous challenge for board and committee members, particularly when one must balance purpose-driven objectives with financial sustainability in the face of limited resources. This conundrum requires a multifaceted approach to effectively manage finances. In this article, I will provide salient insights on how to navigate the complexities of managing finances as a board or committee member of a not-for-profit or charity organisation in Australia.
A cardinal first step in effectively managing finances for not-for-profit and charity organisations is to develop a clear financial strategy that accounts for the diverse perspectives of all stakeholders, including board members, committee members, staff, and volunteers. This strategy must lay out the organisation's financial objectives, including revenue targets, budgetary guidelines, and expenditure priorities. Additionally, it must incorporate the organisation's long-term financial sustainability and resilience objectives, such as fundraising plans, grant applications, and diverse revenue streams.
Board and committee members must possess a thorough understanding of the intricate financial landscape of not-for-profit and charity organisations in Australia to manage finances efficiently. This includes a grasp of pertinent regulations, compliance requirements, tax laws, and accounting standards. Furthermore, board and committee members must have knowledge of the manifold revenue streams available to not-for-profit and charity organisations, ranging from government grants, philanthropic donations, corporate sponsorships, to fundraising events.
Developing an efficacious financial reporting system that provides timely, accurate, and comprehensive financial reports is critical to effectively managing finances. These reports must include regular updates on revenue, expenses, cash flow, and balance sheets. Board and committee members should also receive periodic updates on the organisation's financial performance vis-à-vis budget and critical financial indicators. The presentation of financial reports must be readily accessible and intelligible to facilitate informed decision-making.
Effective financial governance is essential to ensure the long-term financial sustainability and resilience of not-for-profit and charity organisations. This entails establishing clear lines of accountability for financial management, with defined roles and responsibilities for board and committee members, staff, and volunteers. It also involves ensuring the implementation of appropriate financial controls and processes, including the use of accounting software and regular audits by independent auditors.
Investing in financial capability building is another key facet of managing finances effectively. Board and committee members must possess the requisite knowledge and skills to manage finances adroitly. This can be accomplished through training on financial management and accounting, access to financial mentors and coaches, and regular updates on changes to regulations and compliance requirements.
Managing finances as a board or committee member of a not-for-profit or charity organisation in Australia demands a holistic approach. This includes developing a clear financial strategy, comprehending the financial landscape, implementing a robust financial reporting system, practicing effective financial governance, and investing in financial capability building. By implementing these measures, organisations can safeguard their long-term financial sustainability and resilience, pursue their mission-driven objectives, and make a positive impact on the communities they serve. As business consultants, we have observed firsthand the transformative power of effective financial management in not-for-profit and charity organisations. By adopting these measures, organisations can inspire confidence and trust among their stakeholders, enhance their financial performance, and navigate the challenges and opportunities of the future with aplomb.
