3 Essential Responsibilities of a Nonprofit Treasurer

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Your nonprofit’s board of directors plays a key role in your organization’s ability to make a difference. Board members help your nonprofit set goals for the future, develop fundraising initiatives, and get the community involved in furthering your mission. They also provide governance for all of your organization’s operations, ensuring everything runs smoothly and up to standard.

Within your board, there are some specialized roles to fill, and one of these is the position of nonprofit treasurer. Your treasurer is your board’s financial expert, overseeing various fiscal operations at your organization and communicating about your financial situation with internal and external stakeholders.

To help you better understand the role of a nonprofit treasurer, this guide will dive into three of their most important responsibilities:

  1. Providing Financial Oversight for Your Organization
  2. Compiling and Presenting Recurring Reports
  3. Collaborating With Your Nonprofit’s Financial Professionals

Knowing what a nonprofit treasurer does will help you select the right individual for the job —someone dedicated, organized, leadership-minded, and experienced in financial management. Let’s get started!

1. Providing Financial Oversight for Your Organization

Since your board’s main role is to provide oversight for your nonprofit, your treasurer will take on any responsibilities under that umbrella related to your organization’s finances. For example, they’ll likely be in charge of:

  • Setting financial goals in your nonprofit’s strategic plan. As your other board members and executive leadership develop long-term initiatives, your treasurer will estimate how much each one will cost and determine if raising that money is feasible within the suggested time frame.
  • Reviewing fiscal policies and procedures. Your organization should have a fiscal policy handbook that lays out guidelines for how to handle funds on a day-to-day basis. Your treasurer should approve these policies before they go into effect and suggest amendments to them as needed.
  • Supervising financial risk management. Not only will your treasurer ensure that your nonprofit is doing everything possible to prevent financial risks like fraud and non-compliance, but they’ll also oversee the resolution of these issues should they occur.
  • Preparing for audits. If your nonprofit conducts an independent financial audit, your treasurer will play a key role in choosing an auditor, gathering the documentation they request, and implementing their recommendations.
  • Managing investments. Your treasurer will regularly check that any interest earned on endowments, brokerage account funds, or other investments is being used for its intended purpose at your organization.
  • Approving budgets. Most importantly, your nonprofit’s annual operating budget can’t go into effect until your treasurer signs off on it.

Basically, your treasurer ensures that all of your organization’s financial management activities run smoothly, comply with regulations, and function in the best interest of your nonprofit.

2. Compiling and Presenting Recurring Reports

While your treasurer will oversee the creation of various financial reports, such as your nonprofit’s annual financial statements and tax returns, they also compile their own reports. Jitasa’s guide to nonprofit treasurer reports explains that your treasurer can either create detailed monthly reports or more general annual reports. However, both types serve the purpose of updating the board, leadership, and outside stakeholders on your organization’s financial situation.

Elements of a Nonprofit Treasurer Report

At the top of each of their reports, your treasurer should write your nonprofit’s name and the time period the report covers. Then, they’ll dive into the following financial data points:

  • Your organization’s cash balance at the beginning of the reporting period.
  • All of the revenue you brought in during the reporting period, organized by source.
  • All of the expenses your nonprofit incurred during the reporting period, broken down into the functional expense categories of program, administrative, and fundraising costs.
  • Your organization’s cash balance at the end of the reporting period.

This information is the bare minimum of what your treasurer should include in their report—they may also choose to cover budget vs. actual comparisons, bank reconciliations, revenue and expense projections for the next reporting period, or various other types of financial data. Additionally, they should always sign the bottom of the report to prove its legitimacy.

When the Treasurer Will Present the Report

There are many different situations in which your treasurer’s reports can prove useful. Here are just a few examples of when they might share the report:

Your nonprofit treasurer acts as the financial liaison between your board and staff or outside parties. Presenting their reports strategically is one of the best ways for them to fulfill this duty.

3. Collaborating With Your Nonprofit’s Financial Professionals

Nonprofit treasurers don’t work in a vacuum. They often chair your board’s finance or audit committee, and they frequently communicate with other board members and your organization’s executive leadership.

Most importantly, your treasurer will work closely with the other financial professionals on your nonprofit’s team, including your:

  • Chief financial officer (CFO). Your CFO is primarily responsible for the financial planning and strategy-related activities that your treasurer oversees. For instance, your CFO will take point on creating your nonprofit’s annual operating budget before your treasurer approves it.
  • Accountant. Nonprofit accountants take care of most of the financial analysis and reporting tasks at your organization. Your treasurer will not only review your accountant’s reports but also work with them to prepare for audits and manage organizational risks.
  • Bookkeeper. According to NXUnite’s nonprofit bookkeeping guide, a bookkeeper’s main duty is recording and organizing your organization’s financial data—the very same information your treasurer relies on to create their reports.

Delegating your nonprofit’s financial responsibilities among these four individuals (including your treasurer) makes for more effective financial management. When your nonprofit has at least three professionals—a CFO, a bookkeeper, and an accountant—actively working on different aspects of your finances while your treasurer provides oversight, everyone can take the time to check in with each other and ensure everything is done correctly.

Every nonprofit has a unique financial situation, so your organization’s treasurer may operate in slightly different capacities depending on your needs and goals. However, the three responsibilities outlined above are core to the nonprofit treasurer role, so make sure your organization chooses someone for the position who can perform all of them well.