3 Things You May Not Know About Not-for-Profit Board Leadership

It is an honor to serve on a nonprofit board. In fact, financial professionals often serve in a leadership role as treasurers or finance committee chairs within the board itself. Though board leadership is certainly a meaningful way to give back in your community, it is not without its challenges. Finance committee chairs and treasurers assume additional leadership responsibilities that go beyond the responsibilities of board members at-large.

Here are three things you may not know about not-for-profit board leadership:

1. Listening skills are paramount and require constant improvement.

You will be working alongside professionals from other fields, typically those with expertise related to the organization’s mission. For example, if your organization serves homeless youth, you may work with professionals from the social-work field. To lend your expertise to business planning and strategy, you will need to spend time talking with your colleagues who are experts on the subject matter and understand the organization’s theory of change. With different viewpoints the board, as a whole, will make better decisions.

2. Making organizational decisions requires a delicate balance of using your head and your heart.

Not-for-profits have two bottom lines: the financial one (think: operating surplus and cash flow) and the mission one (think: lives saved). Financial professionals tend to be risk-averse and heavily fixated on financial sustainability to the point where they may lose sight of the organization’s mission in the community. For example, a colleague of mine was legitimately concerned about an unbudgeted drop in revenues and argued adamantly for the board to pass a revised budget mid-year in order to decrease spending. This was during the Great Recession, which was a time when this organization’s services in low-income communities was greatly needed. In the end, the board did not take the axe to the program budget; rather, it took a calculated risk to borrow from operating reserves and sustain program service levels. It also increased fundraising efforts and focused on backing up appeals for donations with performance metrics that demonstrated how effective and vital the program was for citizens in their community. This was a risky move, but alas, after several months, the organization attracted support from a major foundation that awarded a grant to keep the program afloat.

3. The amount of time spent preparing presentations is more than most would imagine.

As a committee chair or treasurer, you will be expected to give reports to the board and facilitate deliberations. It will take you much longer to prepare your reports than you might expect. Here’s why: If your career is in the corporate world, you are probably accustomed to audiences that have an understanding of financial statements. It takes a lot of time and thought to tease out the most pertinent data and present it to your audience in a way that enables everyone to understand and participate. Without a doubt, you will lose your audience from the start if you use business jargon and rattle off numbers without providing proper context. Keep in mind that some of your board colleagues may not have a business background. Early in my first board experience, I often presented superfluous information and spent far too much time going over every nook and cranny of our organization’s budget. My reports would often be met with blank stares. Fortunately, our board chair pulled me aside and gave me some advice that really stuck with me: “Be brief. Be brilliant. Be gone.” This was a valuable learning experience for me, and it was the impetus for a new resource created by the AICPA Not-for-Profit Section team on how to give a brilliant board report.

The AICPA’s Not-for-Profit Section is a community that supports not-for-profit professionals and business advisors. You can find a number of board governance resources here. Also, the Section is hosting a webcast “Optimizing Your Budgeting Process” taking place on June 15 at 1–3pm ET. The CPE-eligible webcast is available to anyone with an interest in the financial management of NFPs, and it is free for Not-for-Profit Section members. Register here.

Sandi Matthews, CPA, CGMA, Technical Manager, Not-for-Profit Section, American Institute of CPAs. She previously worked at North Carolina Community Foundation and has served on two boards.

3 Things You May Not Know About Not-for-Profit Board Leadership

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