What Every Board Member Should Know About Financial Management… and Probably Doesn’t
Written by Andy Robinson for the Grassroots Fundraising Journal in 2011 and republished by the Nonprofit Quarterly on September 13, 2020. Includes the four myths of financial management (seen below) and a series of questions you should be able to answer about your organization if you’re aiming to achieve financial responsibility.
“One can debate what all the dimensions of board leadership entail, but one essential aspect is written into the law governing nonprofit organizations: fiduciary responsibility. These are big words, and they don’t mean simply approving a budget or signing off on an audit. In the deepest sense, accepting fiduciary responsibility means integrating financial thinking into every aspect of board governance. If you don’t know the basic financial information by heart—if you’re not steeped in the numbers and understand why they’re important—it’s very hard to exercise that responsibility.”
Four Myths of Financial Management
- Attention to finances detracts from the “real work.”
- Only people who understand finances need to look at the numbers.
- My questions are so basic (and dumb). I’ll look foolish asking them.
- I don’t understand the language; therefore I can’t understand the concepts.
