Question

Suppose you accept a position as board member of a local nonprofit called “Build Your Future” that works to help low-income high school students get into college or trade school. Based on your accounting experience, they want you to oversee the financial aspects of the organization and help identify members for the new Finance Committee of the board. Name two types of board members you will want for the Finance Committee. What backgrounds do they need to have? Why are they critical for your “Dream Financial Team”? Are there any accounting/finance groups you might turn to for help or guidance? Which one(s) and why?

Answer 1

Two types of board members for the finance committee:

1. A member to authorize and approve the outflows of funds
2. A member to take care of the inflow of the funds

Both the members should be from business administration along with finance background. This is so, because a non-profit organization runs mainly on the funds contributed by various donors and a major part of the contribution would be used towards providing scholarships and financial help to students.

Board members with above such background will help in both collecting funds as well as running the organization efficiently to achieve the purpose of the organization.

Further, a permanent accounting group who would take care of the recording day to day expenses along with the other crucial transaction would be required so as to know the financial position of the organization at any given point. This, in turn would help to know about the availability of funds (surplus/deficit) based on which the board would be able to take better decision with respect to expending of such funds.