The title, “board member” for a not-for-profit (NFP) or government organization isn’t typically coveted. Although the positions are highly respected, the amount of time and effort required to successfully govern one of these organizations tends to keep people from jumping on board. However, professionals who choose to serve a noble cause are responsible for making important decisions, including those regarding the financial health and well-being of the organization.
More often than not, the people who sit on the board for an NFP or government entity have very demanding schedules, and not all of them include working for a CPA firm. Typically, a board of directors has a diverse group of members with various skills and backgrounds. However, each board member has the responsibility to make well-informed and educated decisions to help improve the organization.
According to the AICPA, the board members of any NFP or government entity should be able to do the following:
- Be familiar with the organization’s basic finances.
- Ask questions about the financial standing and use of resources.
- Make sure the investment strategy lines up with the goals set.
- Comprehend and approve the annual budget.
- Confirm that the required filing and tax obligations have been met.
- Evaluate the IRS Form 990, Return of Organization Exempt from Income Tax before it’s filed, if possible.
By following these guidelines, the board ensures that the financial health of the NFP or government entity is in good standing, or that any issues are quickly identified and dealt with accordingly. With just this minor knowledge and standard financial practice of the board members, an organization can help safeguard its future.
If your NFP or government entity needs tax and auditing services, Rodefer Moss would be happy to help. Give us a call, and we can eliminate your worry and get your organization back on track.