Corporate Governance

Every not-for-profit organisation is established for the benefit of its members and other groups that it deals with. In order for this to occur effectively and efficiently, a clear set of goals and objectives is needed so that your organisation can reach the heights that it intends to. Put simply, this is what corporate governance is all about. Think of it as a “plan and road-map to success” which allows your organisation to combine your intended community service objectives with the financial objectives that need to be achieved.

After having established the “road-map”, which includes listing the core vision and values of the organisation as well as clear performance targets to move towards the organisation’s objectives, it is important to assess whether or not the organisation is achieving its intended aims. Such evaluation is an integral part of the process so that the organisation is accountable to the members, who are then assured that the organisation is acting in their best interests.

An effectively managed not-for-profit organisation, with proven performance and leadership by a capable board/committee of management, will not only ensure that the organisation survives during the tough times, but thrives at all times. This benefits members in countless ways and enables the organisation to achieve further growth with more people willing to join the organisation in its ventures (increased membership, higher reputation in the field and the possibility of establishing further links with other stakeholders in the form of sponsorship).

How much more will your organisation benefit from an enhanced corporate governance structure?

How To Teach Finance To Your Board

As Treasurer, the management and control of the financial reports falls to you. Aren’t you lucky?

If you have read some of our interviews with treasurers, you will have noticed that they comment on how big that responsibility is especially when the members of the board or committee don’t really understand what you are talking about.  Many reports are approved on sheer trust and that isn’t a good basis for decision making.  It leaves treasurers feeling very vulnerable.

Sometimes it will fall to you to teach the board about how to read the reports and what they really mean. You might even have to show them that they are responsible for the contents of the report, whether or not they understand it.  For some members you might have to start at the beginning and show them what basic accounting and finance is all about.

Our Community has developed a simple, online course that will help you teach finance to the members of your committee.

The course starts at the very beginning and explains what financial reports are and what they should cover.  It gives readers a basic view of accounting, bookkeeping and financial controls.  It isn’t an in-depth course but it will give the members of a committee a better understanding of the role of the treasurer and what the reports actually mean.

The course is free to do and will help the members of your committee to support you better in your work as treasurer.

Heart and Soul Grants for Your Organisation

This clever competition will make you think.  It's exclusively open to NFP's and voluntary organisations in Australia and New Zealand.  It's a little different because it asks you to be creative with your entry.  In fact, it asks you to be poetic about your mission.  If you are clever enough, you will win a Heart and Soul grant.

So, its fun and rewarding.  I wish you luck.


CTK Foundation Heart and Soul Australia New Zealand Announcement from Community TechKnowledge on Vimeo.

Looking for exposure?

Cavill and Co have published an offer that might be of interest to not-for-profit organisations.

They are working with a leading FMCG (fast moving consumer goods) client that is seeking to establish a partnership and make a significant investment into an Australian charity and provide mass market exposure via promotion on its product.

Does this sound like something that would be of benefit to your organisation?

You can apply on site.  The process is broken down into simple steps, each with advice.  You have nothing to lose so why not have a go?

The closing date for submissions from potential NPO partners is Thursday 4 August at 5pm.

Interview With A Treasurer

We recently spoke to the treasurer of a community group about their role in the organisation and the challenges they face.

1. What do you love about the role of treasurer?

I know that people tend to think of small not-for-profit organisations as casual and with no real budget to worry about. That couldn’t be further from the truth. We are not-for-profit, yes, but we have a budget of hundreds of thousands of dollars to manage. We have all the demands of a regular workplace – salaries, overheads, budget limitations and the lot. You can’t just leave it to anyone to manage the budget. You have to know what you are doing. That’s why I took on the role.

2. What has been the hardest part of your job?

Well, when I first took over this role there was a big mess that I had to clean up. The previous treasurer had done some account fiddling and there was money missing. I had to go back through our financial history and look for irregularities and make sure that we were still financially viable as an organisation.

It was very fiddly and detailed work and even worse, there were a lot of people in the organisation who were quite upset at being duped. They blamed themselves for not keeping an eye on the accounts, too. And they should have.

3. So should the treasurer be accountable to someone?

Of course. For the safety of the individual as much as the safety of the organisation, the finances should never be left to one person to manage. I report to a board of management but even so, they don’t quite understand the accounts fully. Part of my job is to teach them so that they get the whole picture and not just what the treasurer tells them.

4. What would you like to change?

I’d like to change the attitude to the role. Everyone thinks that treasurers have a boring job but really it’s dynamic and involving. It’s strategic, too, not just about counting the numbers. It’s about long term planning so that the organisation can stay in business.

Without good monetary control that goes beyond keeping track of your bills, no committee or organisation will be able to function.

Free NFP Success Course

How successful is your NFP? If it’s struggling, you could probably do with some help. That’s where Westpac comes in.

7 Steps to Successful NFP is a free course offered by the Davidson Institute as part of Westpac’s commitment to financial education. The course offers an introduction to key financial management concepts in an easy to follow, practical format.

The course description says:

“This short course will provide you with valuable tips and tools that can assist you in understanding the key financial drivers of a successful organisation.”

At only 1 ½ hours in length, this course won’t eat into your day but it will make a difference to the way you operate.

The course is being presented around the country during the first week of July and places are still available.

To check the dates and locations of this course visit the Davidson Institute now.

Passing The Buck

When your term of office as a Treasurer comes to an end, there is a simple but clear process for handing over the bookkeeping responsibilities to the new Treasurer.

Firstly, it is imperative that you make sure that all of your financial records are up to date, even if there are monies outstanding or invoices unpaid for some reason. As long as you have it all clearly recorded, the new office bearer can move easily into the role and the financial administration can continue to run smoothly.

Many committees don't remember to have their books audited but it makes sense to have a complete audit before you hand the books over to someone new. You will then have a clear record of the state of the finances at the point of handover. Many accountants will offer their auditing services free of charge if you are a small NFP organisation so make enquiries with your local accounting services.

When you contact the bank to organise for any new signatories to be added to the account, don’t forget to get the necessary paperwork for removing anyone who no longer holds a role as signatory within your organisation. Otherwise you can end up with a long list of people who can move money in and out of the NF’s bank account/s and it can become very difficult to maintain accurate banking records. That can obviously expose you to some risk.

Always hand over every historical financial record to the new Treasurer. Although legally you are only required to keep records for the past seven years, it can be a handy reference tool when it comes to expenses and investments, so it often pays for an NFP to keep them for much longer.

Finally, spend some time with the new treasurer and show them how the system works. Every system is a little different and it is important that they can follow an audit trail if they need to look up an older transaction.

A good handover means a smooth progression for the role so take the time you need together.