![]() I’d suggest you stop thinking of a nonprofit as “a business that doesn’t make a profit.” And instead, think of it as a business where the ‘profit’ must be directly reinvested to support its stated mission. Unlike a for-profit company, a nonprofit organization doesn’t have an “owner.” Instead, it is funded by and belongs to the public.īut the term “nonprofit” itself can be misleading. You hear the term financial oversight in the nonprofit world and less in the for-profit world, largely due to the structure of a nonprofit. ![]() Nonprofits are fundamentally different from other businesses And why the board of directors plays the primary role in providing financial oversight. A few of the primary components include:īut before we dig into what those look like, let’s talk about why fiduciary responsibility is such a big deal in nonprofits. So rather than trying to define it, let’s look at some guidelines for what financial oversight looks like in real-life.įinancial oversight refers to a broad range of responsibilities. And they create a lot of confusion for people new to the nonprofit sector. ![]() According to the National Council of Nonprofits, the board has a responsibility to “steer the organization towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies.”īut, in practice, the terms fiduciary duty or financial oversight are a bit ambiguous. Financial oversight is one of the primary roles of your nonprofit board of directors.Įvery nonprofit is required to have a board of directors. ![]()
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