Whilst ALL Board members have a shared responsibility for the financial health of any organisation they govern, the Treasurer has a particularly key role in ensuring the Board’s effective financial oversight of their organisation. And while the Treasurer may work alongside other financial professionals, such as an accountant, a bookkeeper, and possibly staff with responsibility for financial management, the scope of the Treasurer’s role extends beyond simple bookkeeping – demanding vigilance, ethical leadership, and a deep understanding of the financial mechanisms that support the organisation’s effective functioning.
The role of Treasurer generally includes:
1. Ensuring sound Financial Management for the Organisation
Essentially, the Treasurer is responsible for managing (or oversighting the management of) the organisation’s finances. This includes maintaining accurate financial records, managing cash flow, overseeing bank accounts, processing payments and receipts, and managing investments if applicable. Treasurers (or Executive delegate/s) are also tasked with reconciling accounts to ensure that all financial transactions are properly recorded and that the organisation’s financial statements reflect an accurate picture of its financial position.
In smaller organisations, this might mean that the Treasurer takes on a hands-on role in bookkeeping and financial record-keeping. Larger not-for-profits might employ professional accountants and/or bookkeepers and possibly dedicated finance staff to do the actual work, but the Treasurer is still responsible for ensuring that financial records are properly maintained and can be audited if or when necessary.
In many instances, the Treasurer is also the Chair of the Board’s Finance Sub-committee which is effectively the Board’s ‘arms and legs’ when it comes to oversighting or managing the organisation’s finances.
2. Leading the annual Budgeting and Financial Planning process for the Board
Another of the key duties of a Treasurer is developing and overseeing the organisation’s budget. This includes forecasting income and expenses for a defined period (typically a financial year), taking into account potential sources of funding, grants, and donations. A well-structured budget provides a framework for making decisions about allocating resources in alignment with the organisation’s strategic goals and operational needs, and good strategic financial advice for the Board from the Treasurer will help the Board to effectively oversee the deliver of the organisation’s Purposes, Vision and Mission.
In drafting the budget, the Treasurer collaborates with other Board members (and any senior managers) to set realistic financial goals that meet the needs and profile of the organisation. For instance, the Treasurer must assess whether the organisation can fund a new program or initiative and offer guidance on how to do so without jeopardising existing operations. Strategic financial planning is essential for ensuring that the organisation remains solvent and sustainable, especially given that funding sources in the not-for-profit sector can often be unpredictable.
3. Providing robust Financial Reports and ensuring finance-related Compliance
Obviously, transparency and accountability are paramount, and the not-for-profit Treasurer is responsible for ensuring that accurate financial reports are prepared for both the Board and external stakeholders. Presenting clear, complete and accurate finance reports for all Board members to use to inform financial decision-making is an important element of the Treasurer’s role. And external stakeholders such as donors, grant providers, and regulatory bodies also rely on such reports to assess the financial health and integrity of the organisation.
Not-for-profits are required to comply with specific legal requirements, particularly if they are charities registered with the Australian Charities and Not-for-profits Commission (ACNC). It is the Treasurer’s job to ensure that financial reports comply with the ACNC’s requirements (where applicable), as well as the relevant state or territory legislation. For incorporated associations, this may involve the preparation of annual financial statements, lodgement of financial reports, and, depending on the size of the organisation, an audit or review by an external accountant.
4. Leading Fundraising and overseeing Grant Management
Many not-for-profits rely heavily on donations, grants, and fundraising activities to support their operations. The Treasurer generally plays an important role in overseeing the financial aspects of these fundraising efforts. This involves ensuring that all funds raised are properly accounted for, relationships with donors are properly managed, and compliance with any conditions attached to grants or donations (including fundraising legislation) are met.
The Treasurer may also be responsible for preparing financial reports to funders to acquit the funds provided, detailing how the funds were used and providing evidence that they were used in accordance with the grant agreement. In some cases, this might involve working closely with project managers or program directors to ensure that project budgets align with the organisation’s overall financial plan.
Common challenges faced by not-for-profit Treasurers
While the Treasurer’s role is essential, it also comes with significant challenges. Managing the finances of a not-for-profit can be complex, especially given the sector’s reliance on unpredictable revenue streams, such as donations, grants, and fundraising. Treasurers often face the challenge of managing cash flow during periods of financial uncertainty.
Additionally, compliance requirements can be significant. Legislation governing not-for-profits can be complex, and Treasurers need to ensure that they stay informed about the relevant laws and regulations. This includes not only financial reporting requirements but also governance obligations such as ensuring that the organisation’s funds are spent appropriately on activities which align with its constitution and Purposes.
Skills and Qualities of an Effective Treasurer
An effective Treasurer needs to posses a unique blend of financial acumen, strategic insight, and ethical leadership. First and foremost, the Treasurer must have a solid understanding of financial management principles, including budgeting, accounting, and cash flow management. In many cases, Treasurers will have formal qualifications in accounting or finance, but practical experience and a commitment to learning can also be sufficient.
A good Treasurer is detail-oriented and thorough, with a strong commitment to maintaining accurate records. They must be able to communicate complex financial information clearly and accessibly to the rest of the Board and external stakeholders who may not have a financial background. This requires both good communication skills and a collaborative mindset, for the Treasurer to work closely with other Board members to ensure that financial decisions are aligned with the organisation’s broader goals.
In a nutshell, the not-for-profit Treasurer is the linchpin of the financial health of the organisation, leading the rest of the Board in ensuring the financial wellbeing that enables an organisation to deliver on its Purpose, Vision and Mission.
If you think I can help you (or your Board Treasurer) to better fulfil this critical role within your not-for-profit, do get in touch with me at megan@mjbconsulting.net.au, or book in a zoom Discovery Call with me HERE to talk about what YOU need.
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