Your R+S On Nonprofit Finance

In this issue, we provide essential resources to empower nonprofit board members to enhance their financial oversight. From a primer on reading financial statements to seven key questions to ask during budget reviews, these guides are designed to support informed decision-making. You’ll also find a glossary of financial terms every board member should know, plus answers to frequently asked questions about critical nonprofit financial issues. Read on to ensure your board is equipped with the financial knowledge they need to lead confidently and effectively.

In this issue:

• Welcome to Your Financial Statements: A Primer for Nonprofit Board Members

• 7 Questions to Ask When Reviewing the Annual Budget

• Nonprofit Financial Terms Glossary

• Financial Issues — FAQs

A Helpful Guide to Nonprofit Financial Statements

Every board member needs to be able to read and interpret their organization’s financial statements, including a balance sheet and income statement. This primer includes an annotated sample balance sheet and income statement, definitions of key terms, an introduction to important financial ratios, and helpful tips on how to interpret the numbers. Grab your copy and start exploring our introductory guide to your financial statements.

7 Questions to Ask When Reviewing the Annual Budget

This article lists seven essential questions nonprofit boards may ask when reviewing the organization's annual operating budget. From ensuring the budget aligns with the mission to understanding revenue sources and operating ratios, this guide helps board members make informed financial decisions and assess the organization's fiscal health. Stay prepared with insights on budget flexibility, benchmarks, and the importance of regular financial reporting.

Nonprofit Financial Terms Glossary

Nonprofit boards play a crucial role in supervising their organization's financial matters. Each board member has a responsibility to read and understand the basics of their organization's finances. This glossary provides a comprehensive list of terms that board members may find necessary to know, including accrued liabilities, internal controls, private inurement, and more.

FAQs on Nonprofit Financial Issues 

BoardSource has been answering governance-related questions for over 30 years, and in this article, we tackle some of the most common financial issues faced by nonprofit boards. From understanding executive compensation and internal audits to navigating intermediate sanctions, this guide covers key financial questions every board should ask. Learn how to ensure financial propriety, prevent fraud, and make informed decisions that protect your organization's mission and integrity.