When you think about it, it’s a bit inaccurate to refer to your organization as “nonprofit.” In fact, money is rarely far from the minds of your organization’s leaders. At least, it shouldn’t be.

Like your for-profit counterparts, you can’t succeed without maintaining sound fiscal health. That’s why the title of “treasurer” is so much more than an honorific. By watching over your organization’s “treasure,” the person holding that position facilitates the accomplishment of the nonprofit’s greater goals.

The role in a nutshell

The treasurer generally is charged with overseeing the management and reporting of the organization’s finances. In a large nonprofit with accounting staff and a chief financial officer, the treasurer will usually head a finance committee that reports to the board of directors. He or she focuses mainly on reviewing internally prepared financial reports and evaluating financial policies and procedures.

By contrast, in a smaller organization with no internal accounting staff, the treasurer may need to get down in the trenches — writing checks and making deposits, managing and safeguarding funds and maintaining financial integrity. Where applicable, he or she also might oversee outside bookkeepers, tax preparers, fundraisers and investment advisors.

Regardless of the organization’s size, the treasurer typically shepherds the development of the not-for-profit’s financial policies, such as those for investing, borrowing and cash reserves. And he or she presents regular treasurer’s reports to the board of directors. These can range from a simple “dashboard” to more detailed information.

Specific areas of concern

The treasurer must ride herd over several different areas. Depending on the organization’s resources, the treasurer’s degree of involvement will vary. He or she might take on the following duties personally or just provide the necessary oversight to confirm that staff is handling them appropriately.

Budget. The annual budget represents the financial map of the organization’s goals and how it plans to achieve them in the coming year. The treasurer should present the budget for board approval, being realistic about both revenues and expenses. He or she also should review current reports frequently for variances between actual and budgeted figures and determine the reasons for those discrepancies.

Financial reports. The board relies on the treasurer to provide timely and accurate financial information to support its decision-making. In addition to financial statements, the treasurer might supply information on financial ratios and trends that describe the organization’s current and projected financial status.

Compliance. Complying with relevant laws and tax regulations is a top priority. Among other things, the treasurer should work with your CPA and keep a calendar of reporting and filing deadlines to avoid late fees, penalties and the reputational damage they can bring.

Risk management. The treasurer also should coordinate with your CPA and insurance agent to regularly perform assessments that identify and mitigate risks to the organization’s assets, data and confidential information. You might have risks, for instance, related to the use of volunteers in money-handling positions. Mitigation could include internal controls designed to deter and detect fraud.

Audit. Once your nonprofit reaches a certain size, its books should be audited annually by an independent CPA. The treasurer should review the results and recommendations — asking questions where appropriate — and present them to the board.

The right person for the job

With so much responsibility, it’s clear that not just anyone can function well in the treasurer position. You need to be very selective about candidates’ qualifications.

For starters, the treasurer must have a demonstrable financial literacy, including a thorough understanding of the particular financial reports and accounting practices used by nonprofits. He or she also should possess an attention to detail, adherence to deadlines, patience, curiosity and recordkeeping skills. A passion for the cause also is valuable, as the treasurer needs the motivation to make, and keep up with, the ample time commitment required for the job. It helps, too, if the treasurer has some people skills — a grumpy introvert may not work well with staff and other board members.

The bottom line

Although the specific duties treasurers perform will vary depending on the not-for-profit’s circumstances, the importance of the job does not. Without a qualified treasurer performing proper oversight, your organization’s financial health will be in jeopardy. Investing in a thorough search for the right person will pay off in the long run.