Surprise, surprise! Responsibilities of a nonprofit treasurer do not typically include managing the day-to-day financial operations of the nonprofit but more so interacting with those who do. Sometimes, especially in smaller organizations, the Board Treasurer gets involved at a granular level, but it is typically not their primary job.
The role of the Board Treasurer consists of things like enforcing policies and procedures, advising the board as it relates to financial strategy, assisting with the budgeting process, liaising with the accountant, financial controller, and CFO, etc.
Why Treasurers Become Frustrated
If the first few years, getting an organization off the ground can be a grassroots efforts and the most involved and knowledgeable team members might contribute their time and energy to get the ball rolling, or pinch-hit for a little while in various capacities, but as the organization grows and brings on new team members, the goal is to streamline efforts by hiring individuals who specialize.
The Board Treasurer probably became more involved than they initially planned due to their passion, connections, and big-picture goal setting—they hit the ground running and ready to make a difference with that seemingly inexhaustible joie de vivre that got them where they are today—a distinguished and honored member of the board. But now, whether out of necessity or curiosity, the Board Treasurer has found themselves over-involved, over-booked, and overworked.
If they were initially involved in the granular details and are trying to take a step back and reclaim a higher-level perspective, specifics like tracking spending, understanding what gets booked where, and when it gets booked, etc. is not appropriate engagement with the executive board when the organization is in a position for growth.
So while admittedly the Board Treasurer tends to take on a lot more work initially by managing the day-to-day, it is not ideal. Let us remove them from the nitty-gritty groundwork and enable them to bring the big ideas to the table by empowering them with the bookkeeping, tracking, and financial reporting that they need to make big decisions and power moves.
Additionally, accounting and auditing may not be the Board Treasurer’s specialty, or they may have limited knowledge and minimal experience in tactical, financial areas. If these are challenges the organization is facing either due to internal structure or due to board members over-extension, it just exacerbates the stress on all parties. It is a good idea to understand their background and evaluate their desired level of involvement and play to the individual’s strengths—why did you invite them to join the board as Treasurer? Was the goal to have them keep books in addition to directing the organization or to temporarily fill a variety of roles? If they are not well-versed in nonprofit accounting, the rules and regulations and compliance, their position on the board may start to feel burdensome. Likewise, they may no longer have the time available that they previously devoted to managing and reporting on the financial operations. Maybe it is time to create space and structure for success.
The organization is growing. Fund are rolling in. The transactions are becoming more and more complex. The contracts are new. There are bigger contracts than the organization has seen before. Funding has reached beyond the capacity to manage it from a grassroots level. What is next?
At this stage, most nonprofits realize that what they were doing before is not going to work now because things are expanding. These are growing pains and they can be a really great opportunity for the organization. It is time to look at staffing, and rethink who is involved and how they are best utilized. If your Board Treasurer was helping and needs to take a more supervisory role, or just becomes involved during period of negotiation and fundraising as their relationships are leveraged, a Financial Controller can help with role reassessment, forecasting, planning, and creative separation between the board’s executive leadership role, and the accounting and program management aspect of the important work you are doing.
It is always the right move to bring on an advisor or a team who can help your organization level up.
What The Role of the Treasurer is Best Suited for
You want the Board Treasurer to be tapping into the strategy. You want them to be determining the direction that your organization is going to be going financially. They are your chosen team member who provide input on the best use of funds, the direction that the organization needs to be taking, and how best to manage the funding opportunities the organization is receiving. For example:
Oversee donor funds and garner trust
Build and navigate key relationships
Oversee the organization's financial administration
Advise the board on financial strategy and fundraising
The Controller Solution
What you really need is a financial controller. The financial controller is the person/ role that is responsible for accounting from start to finish. They oversee the bookkeeper or other day-to-day staff that work on accounting, they keep up with the compliance, and they make sure that there are policies and procedures in place.
Additionally, the controller manages the audit process. Growth and expansion, while exciting, also include certain federal and state mandates and often requires independent audits. Depending on the programs in place, that can include both programmatic audits and agency audits. Who is running point? A controller is perfect for this position.
With a background in formal auditing, I can tell you right now that it can get incredibly detailed. Very intricate. Not ideal for a Board Treasurer, let alone the Executive Director who is also managing the other organizational officers.
The controller role, should not just be reactive when it comes to accounting and auditing. The role of the controller provides a framework for success. They should look backwards, and then forward.
Why not A CFO?
Depending on the size of your nonprofit, there may not be a need for a CFO. If the nonprofit is borrowing funds, managing a line of credit, seeking funding from banks and financing sources and operating around a $10M+ budget, it might be time to consider a CFO, but for smaller organizations with a more traditional set up and staffing needs, a controller is the perfect fit.
While a CFO is an expert in all things financial, do not expect the CFO to be heavily involved in the day-to-day accounting. The CFO role will be no good to your organization if the accounting is not correct. They use that information to be able to draw conclusions about what's happening in the organization, to assess the financial performance and to see what trajectory the organization is on. Even the CFO needs a team or a person to rely on to put the policies and procedures in place and require conformity from the staff and consistency in reporting.
If your Treasurer is overworked and facing burnout, it’s time to get them some help. They’re of better use to your organization when they can step out of the day to day and fully step into the lead role of financial management.