Finance for charities

The Institute of Community Directors Australia has released a new guide for board members titled Damn good advice for board members: Twenty-five questions a not-for-profit board member needs to ask about the finances.

The guide is designed to assist directors in keeping their charity’s finances in order and states while overseeing the finances of a company may not be the most important task of a board member, that doesn’t mean it can be overlooked.

The guide stresses every board member has undivided responsibility for what happens. It adds that while board members are entitled to take the treasurer’s word for things rather than going through all the paperwork, there is a point at which this stops, stressing that ignorance of the accounts is not an excuse.

“You’re obliged to know enough about finance to know what the financial statements are telling you, and to see where there are inconsistencies, errors or warning signs,” the guide states.

“You’re obliged to ask questions if there are gaps. You’re obliged to handle the organisation’s money with as much care and attention as if it were your own, and everybody else will expect you to handle the money with as much dedication to duty as if it were theirs.”

The guide outlines 25 key considerations for not-for-profit board members including legal information, understanding financials such as profit margins and fundraising and the sort of questions board members and directors should be asking.

The guide can be found here.