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NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean? WHY DOES THE BOARD NEED TO KNOW HOW TO READ BETWEEN THE LINES? Yvonne Norton.

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Presentation on theme: "NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean? WHY DOES THE BOARD NEED TO KNOW HOW TO READ BETWEEN THE LINES? Yvonne Norton."— Presentation transcript:

1 NEW INSIGHTS ON BOARD RESPONSIBILITIES What Do These Financial Statements Mean? WHY DOES THE BOARD NEED TO KNOW HOW TO READ BETWEEN THE LINES? Yvonne Norton Leung, Consultant to Nonprofits DEAL MAKERS MARKETPLACE 2006Omaha Nebraska

2 z“An organization is only as effective as it has resources to meet its purposes. Providing adequate resources is first and foremost a Board responsibility.” Richard Ingram. Ten Basic Responsibilities of Nonprofit Boards

3 US Charitable Giving in 2004 totaled $249 Billion zIndividuals – 84% y76% current + 8% bequests zCorporations – 5% zFoundations – 12% zSource: AAFRC, Giving USA 2003

4 BOARD’S LEGAL DUTIES zDUTY OF OBEDIENCE yCarry out the mission legally zDUTY OF CARE yOperate in good faith, with reasonable care, in the best interests of the organization zDUTY OF LOYALTY yAvoid conflicts of interest, maintain confidentiality and discretion

5 BOARD OF DIRECTORS CHARGE zSTEWARDSHIP OF THE MISSION Ensure that services support the mission Function within the legal parameters zSTRATEGIC LEADERSHIP AND DIRECTION Advocate for the mission Utilize corporate planning system strategically Approve the corporate goals, action plan and budget zFISCAL STEWARDSHIP OF THE CORPORATION Develop annual & long-range fund development plans Ensure adequate human resources

6 BOARD RESPONSIBILITY FOR FINANCIAL OVERSIGHT zChecks and balances zBudget review and approval zAudit review and approval zTimely accounting reports, GAAP zPolicies on grants sustainability, reserves, investments, property zSetting goals and outcomes

7 CURRENT ISSUES zSarbanes-Oxley Act zFiduciary Stewardship, Ethics, Conflicts of Interest zFinancial Accounting Standards Board zInternal Revenue Service, 990s zNonprofit Corporation Act zFederal Election Commission/501 c 4 zUS Patriot’s Act zFederal/State Legislation Proposals

8 TOOLS AND RESOURCES zAudit, IRS Form 990, and Management Letter zAccountant and Auditor zFive-year Analysis zPrior Financial Data zMonthly or quarterly statements zTraining and Courses

9 RULES FOR FUND DEVELOPMENT zWhat does your organization do? zWho does it help? zWhat difference does it make to a life or difference to the world? zHow long have you been going? zWhat are your plans for the future? zHow are you funded? All sources and uses. zPrepare case studies of good examples of work you have done.

10 RULES FOR SUSTAINABILITY zThink and act strategically zLeadership balanced with continuity zActively manage people and resources through policies and budget zLink organizational goals to systems, budget, and human resources zFocus on core competencies and build new ones zForm partnerships and alliances zLearn from high performers

11 ONLINE RESOURCES zwww.milanomix.org Management Information Exchange (MiX) Living Cities & Milano Grad School of Management and Urban Policy. zwww.knowledgeplex.org Fannie Mae Foundation - best practices, discussions, & research. zwww.nifa.org Neb Investment Finance Authority zwww.neded.gov Neb Department of Economic Development zwww.housingdevelopers.org


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