Nonprofit Governing Board Analysis

813 Words2 Pages

Although the financial responsibility of a nonprofit governing board includes its ability to achieve the organization’s mission over time, the board and CEO must together address several important directives such as, compliance with state and federal regulations, investment risk assessment, legal financial accountability measures established and ensure financial transparency. The board is additionally responsible for maintaining internal control protocols
Since a nonprofit is a tax-exempt organization that may receive government funding, philanthropic endowments, in addition to receiving profits from fundraising activities. Protocols must be established to ensure that no individuals, to include the board, CEO, volunteers, donors or any shareholders …show more content…

This also helps to determine the risks and benefits for responsible decision making. It is prudent that the CEO and Chairman of the board work together on these assessments that all constituents are functioning in accordance to a nonprofits governance protocol. The checklist assessment will also include protocols for planning, evaluation, personal and financial management compliance. Management of personal and financial functions are also assessed such as, independent auditors, preparation of reports, consistency of reports, job descriptions, and other operational procedures. It is imperative that the team works together to make sure that fundraising strategies are appropriate to achieve the nonprofits objectives without causing harm internally or externally to the overall mission of the organization. This means that risk management and enterprise risk management are both analyzed for vulnerabilities strategically, operational, financial, compliance issues, reputational etc. (Matan & Hartnet, 2011). The board must also have an established sound investment policy for surplus funds that is distinguishable from operating, reserve, capitol, endowments and working cash funds (Young, 2007). Policy should also include a detailed vetting, evaluating and questioning process for investment managers. Policy should also include guidelines for diversification …show more content…

(2016). Fundraising for Social Change, 7th Ed. Hoboken, New Jersey: John Wiley and Sons Inc.
Matan, R., & Hartnett, B. (2011). How Nonprofit Organizations Manage Risk. Retrieved August 06, 2017, from
McLaughlin, Thomas A. (2016). Streetsmart Financial Basics for Nonprofit Managers, 4th ed. New York: John Wiley & Sons, Inc.
Salamon, L., & Geller, S. (2005). Nonprofit Governance and Accountability: John Hopkins Nonprofit Listening Post Project. Retrieved August 6, 2017 from
Young, Dennis R. ed. (2007). Financing Nonprofits; Putting Theory into Practice. Lanham, MD: AltaMira Press and the National Center on Nonprofit

Open Document