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NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean?

NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean?. WHY DOES THE BOARD NEED TO KNOW HOW TO READ BETWEEN THE LINES? Yvonne Norton Leung, Consultant to Nonprofits DEAL MAKERS MARKETPLACE 2006 Omaha Nebraska.

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NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean?

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  1. NEW INSIGHTS ON BOARD RESPONSIBILITIESWhat Do These Financial Statements Mean? WHY DOES THE BOARD NEED TO KNOW HOW TO READ BETWEEN THE LINES? Yvonne Norton Leung, Consultant to Nonprofits DEAL MAKERS MARKETPLACE 2006 Omaha Nebraska

  2. “An organization is only as effective as it has resources to meet its purposes. Providing adequate resources is first and foremost a Board responsibility.” Richard Ingram. Ten Basic Responsibilities of Nonprofit Boards

  3. US Charitable Giving in 2004 totaled $249 Billion • Individuals – 84% • 76% current + 8% bequests • Corporations –5% • Foundations –12% • Source: AAFRC, Giving USA 2003

  4. BOARD’S LEGAL DUTIES • DUTY OF OBEDIENCE • Carry out the mission legally • DUTY OF CARE • Operate in good faith, with reasonable care, in the best interests of the organization • DUTY OF LOYALTY • Avoid conflicts of interest, maintain confidentiality and discretion

  5. BOARD OF DIRECTORS CHARGE • STEWARDSHIP OF THE MISSION Ensure that services support the mission Function within the legal parameters • STRATEGIC LEADERSHIP AND DIRECTION Advocate for the mission Utilize corporate planning system strategically Approve the corporate goals, action plan and budget • FISCAL STEWARDSHIP OF THE CORPORATION Develop annual & long-range fund development plans Ensure adequate human resources

  6. BOARD RESPONSIBILITY FOR FINANCIAL OVERSIGHT • Checks and balances • Budget review and approval • Audit review and approval • Timely accounting reports, GAAP • Policies on grants sustainability, reserves, investments, property • Setting goals and outcomes

  7. CURRENT ISSUES • Sarbanes-Oxley Act • Fiduciary Stewardship, Ethics, Conflicts of Interest • Financial Accounting Standards Board • Internal Revenue Service, 990s • Nonprofit Corporation Act • Federal Election Commission/501 c 4 • US Patriot’s Act • Federal/State Legislation Proposals

  8. TOOLS AND RESOURCES • Audit, IRS Form 990, and Management Letter • Accountant and Auditor • Five-year Analysis • Prior Financial Data • Monthly or quarterly statements • Training and Courses

  9. RULES FOR FUND DEVELOPMENT • What does your organization do? • Who does it help? • What difference does it make to a life or difference to the world? • How long have you been going? • What are your plans for the future? • How are you funded? All sources and uses. • Prepare case studies of good examples of work you have done.

  10. RULES FOR SUSTAINABILITY • Think and act strategically • Leadership balanced with continuity • Actively manage people and resources through policies and budget • Link organizational goals to systems, budget, and human resources • Focus on core competencies and build new ones • Form partnerships and alliances • Learn from high performers

  11. ONLINE RESOURCES • www.milanomix.org Management Information Exchange (MiX) Living Cities & Milano Grad School of Management and Urban Policy. • www.knowledgeplex.org Fannie Mae Foundation - best practices, discussions, & research. • www.nifa.org Neb Investment Finance Authority • www.neded.gov Neb Department of Economic Development • www.housingdevelopers.org

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