Jitasa Nonprofit Blog

Achieving Successful Interactions with Your Board Members - Part 1

Part 1 of a 2 part series.

Reporting to your board can be a stressful obligation. However, it doesn’t have to be. Following these helpful tips will keep you on track with your board members, and ensure that your nonprofit’s financial decisions are based on accurate information.

You should be reporting to your board on a quarterly basis, providing them with a clear financial portrait of your programs and operations. Providing accurate information is critical, as it ensures that your board will be able to provide correct advice and proper strategy. Provide your board members a detailed packet at least one week prior to meeting. Use this time to sync agenda items and highlight critical decisions and desired outcomes. You should also provide background reading and reports for your board to review prior to your meeting. These reports should include your executive summary, standard financial reports and any additional reports that the board has requested. These reports should include a higher level of reporting (more extensive than what your Executive Director or CFO view on a monthly basis), including supporting detail.  Example reports could include your statement of financial position, statement of activities, budget vs. actuals statement, and statement of functional expenses.

Detailed definitions of the reports you should be providing your board:

Executive Summary: Also known as a management summary, this will summarize your longer, more detailed reports. Simplifying this information for your board will give them a preview of what you’ll discuss in greater detail in your meeting, and allow them to formulate questions that they will want addressed.

Statement of Financial Position: This report is also known as a balance sheet, and will reflect your assets and liabilities. Watch Video

Statement of Activities: Also known as an income statement, this report will detail your income versus your expenses. Watch Video

Budget vs. Actuals Statement: This report functions as another layer of your Statement of Activities. The projection should include your past and future plans versus the reality of your organization, as well as review any major discrepancies in these areas. You should also take this time to review with your board any line item that has been budgeted, but has no actual expenditures. Watch Video

Statement of Functional Expenses: This report will measure your nonprofit’s efficiency, and is comparative to a net income report in the for-profit world. Its key ratios will measure the percentage your nonprofit spends on programs versus the percentage spent on administration and fundraising expenses. Ideally your nonprofit should seek an 80/20 composition, with 80% of expenses contributing to program functions and 20% contributing to administration and fundraising costs. Watch Video

Renata Poe Massie, Content Writer, Jitasa

Join us Friday, September 20th for Part 2 of this series - Tips for Preparing and Presenting to Your Board

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