If you’re starting a nonprofit organization, you may be wondering how to choose the best treasurer. After all, this job is incredibly important for your organization. It’s your front-line person to the board and other people who might be responsible for forming financial policies. Nonprofit organizations must file a Form 990 annually by the due date. A state treasurer is required to know and follow all applicable laws.
A successful treasurer will develop a system to ensure your organization stays solvent. For example, a high membership renewal rate may mean that you need to make payments for director’s and officers’ insurance, and other anticipated expenses. This position is also responsible for accounting and reporting requirements. An effective treasurer should understand your organization’s financial data and estimate its needs. Here are some guidelines for your nonprofit treasurer. If you’re unsure about the best treasurer for your nonprofit, you should seek legal advice.
Bylaws and Procedures
Once you’ve selected your new treasurer, you should understand your organization’s bylaws and the procedures for managing finances. You’ll need to meet with the outgoing treasurer and obtain previous budget information and financial documentation. Next, create a schedule for your upcoming meetings. A good treasurer should have an electronic calendar that keeps track of important deadlines. It is also vital to follow all procedures and policies that the organization has already established.
Your nonprofit treasurer should have the necessary skills to successfully oversee the organization’s finances. Typically, a nonprofit treasurer’s duties are defined in the organization’s bylaws. Treasurers must be well-versed in accounting and financial matters and have the knowledge to understand the tax implications and future opportunities. In addition, he or she must have a track record of ensuring that all funds go toward their designated purpose.
You’re Treasurer for a Non-profit? Now You’re a CFO!
In addition to these skills, the state treasurer should have some knowledge of nonprofits. California state law requires nonprofits to have a Chief Financial Officer (CFO), which is considered the treasurer’s primary role. While you may not need a CFO, it’s best to look for someone who has some accounting experience and can communicate these in layman’s terms. In addition to being a good financial manager, a treasurer should also have integrity.
In addition to the above-mentioned duties, your nonprofit treasurer should also obtain a Federal Employer Identification Number (FEIN) from the IRS. Banks will also require you to prove your nonprofit status. Your nonprofit treasurer should also provide a copy of the state treasurer’s Form ST-5, which qualifies your organization to be exempt from collecting sales tax on qualified purchases. The nonprofit treasurer should also be in charge of preparing the treasurer’s report for board meetings.
