The not-for-profit board, or board of directors, is the legal governing body of a not-for-profit organization. The members of a not-for-profit board are responsible for understanding and enforcing the legal requirements of an organization. They also focus on the high-level strategy, oversight, and accountability of the organization.
While there are many candidates worthy of joining a board, a CPA-certified accountant brings a unique skillset with them and can act as a valuable resource for your not-for-profit. CPAs can especially add value in the following areas:
CPAs are often called upon to act as outsourced Chief Financial Officers while organizations search for their long-term replacement. This firsthand experience grants them insight into the habits and practices of a strong managerial team that they can then share with the board.
CPAs also have expertise in developing and perfecting organizational policies and procedures and assessment of the functional needs of staffing models. This gives them the unique skillset to assess management teams and offer recommendations.
Serving on the board of an organization you’re passionate about is an excellent way to give back to your community. However, given their nature as volunteers, many board members may be unaware of the specific responsibilities they’re beholden to while serving.
A CPA can help guide the board in its legally obligated duties and act as an educator for new board members who are eager to serve but lack a defined understanding of what their role entails.
Ability to Understand and Interpret Financials Statements
One of the core responsibilities of a not-for-profit board is ensuring the organization is being run in a financially responsible manner. Key to this is the ability to understand and interpret the nonprofits’ annual financial statements, which provide insights into how an organization generates revenue, how much it costs the organization to operate, and how efficiently it handles its donations.
Often the financial lead or treasurer is tasked with managing the budgeting, forecasting, and review and oversight of the financial information and financial systems. It significantly adds value to task these responsibilities to a professional with a strong financial background. A trained professional can help spot upcoming issues and opportunities for the board to address.
Stay Up to Date on Fiduciary Requirements
There are two constants with fiduciary requirements: there will always be a new one coming down the pike, and they will not be written in layman’s terms.
A CPA can help translate densely written guidance into actionable steps for your organization, and the requirements of their career means they’re often aware of new requirements well before they become enforceable, giving your organization more time to prepare for the change. A nuanced understanding of the fiduciary requirements also means your organization is likely to stay on the right side of the law.
Capitalizing on Experience Working with Other Not-for-Profits
CPAs who work with not-for-profits have a vast pool of learned experience from helping these organizations through their own obstacles and opportunities. Placing a CPA on your board gives you access to this library of learned experience and a first-hand insight into how other not-for-profits handled scenarios that may be similar to your own. A CPA-certified board member will be able to share what has and hasn’t worked in the past and save your organization the trouble of testing trial-and-error solutions.
Strong Networking Presence in Business Community
One of the benefits of being an accountant is working closely with members of many different organizations, including C-suite executives and other decision makers. A well-connected CPA can leverage their network to assist the organization in various strategic and consulting roles, effectively connecting the organization to the ideal candidate to fulfill their needs. They are also well positioned to tap into their network to recruit other board members and volunteers.
Providing Access to Shared Knowledge Amongst Colleagues
CPA firms house multiple experts within their offices. Chances are, if your CPA board member does not know the answer, they have a wealth of knowledge at their fingertips within their firm. It is prudent to seek out a CPA with a well-established nonprofit tax and assurance practice.
Clark Nuber believes that a large part of being a professional is a commitment to community and finding purpose in your work. We as CPAs relish the opportunity to bring additional purpose and meaning to our work by supporting causes we’re passionate about. Next time you’re looking to fill a board seat, consider reaching out to a CPA that can bring value to your organization in all the ways listed above.
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