10 Keys to Effective Nonprofit Board Reporting and Financial Governance

Effective reporting to a nonprofit organization’s board of directors is a critical function. It is crucial that your organization can deliver high-quality and functional board reports with relevant levels of detail, transparency, and accountability. The best reports provide the board the ability and confidence to effectively govern the organization and align the efforts of the organization’s management and board. The goal of most nonprofit board reporting is to inform, engage, and align the board with the organization’s mission and strategic direction.

If you are a new executive director looking for guidance on nonprofit board reporting or you need a more streamlined approach, check out these 10 essential characteristics that should be part of your nonprofit board report:

1. Executive Summary: This section includes a brief overview of the organization’s overall performance, key achievements, and the challenges it faces in the short-and long-term. In addition, this area of a nonprofit board report highlights critical issues, challenges or decisions that the board needs to make.

2. Mission and Impact: A summary of your organization’s mission and impact is important to ensure the alignment of the board to the mission. Sharing stories or examples of how the organization has made a positive impact with its key stakeholders is critical here.

3. Financial Health: One of the most fundamental and important parts of board governance reporting is, of course, financial reporting.

Beyond simply providing financial statements incorporating the Statement of Financial Position, Statement of Activities, and Statement of Cash Flow; performance against budget and projected results are key indicators to inform and assist with board financial governance. Consultance Accounting provides written summaries and insights to create more comprehensive board reporting for your nonprofit.

4. Program Updates: Details the major program activities, deliverables, and outcomes related to your nonprofit’s mission. Highlighting successful partnerships, new collaborations and important projects should be included here.

5. Governance and Compliance: Update the board on compliance with legal requirements, regulations, and internal policies.

Changes to bylaws and organizational policies should be detailed here.

6. Risk Management: Board reporting on risks allows the board to review and create a course of action to help mitigate risks arising from digital, market, or interpersonal issues. In this section, explain the steps needed to reduce organizational risks and get the board’s take on these measures.

7. Fundraising and Development: Monitoring the success of fundraising efforts, donor relations, and grant applications will ensure the board is aware of income derived from these sources, the level of support for the organization, and key donors and supporters who are involved.

This report section can also discuss fundraising goals and new fundraising initiatives.

8. Staff and Volunteer Updates: The nonprofit board members should have a summary of any acknowledgments of staff and volunteer contributions so they can thank these individuals and be aware of the service they are providing.

Staffing changes, professional development initiatives, and volunteer activities should all be noted as well.

9. Strategic Goals and Planning: Remind the board of the long-term vision of your nonprofit and include progress toward strategic goals and objectives.

If necessary, include a discussion on any changes or adjustments that affect the strategic plan and how to chart a path for the future.

10. Appendices: Include any relevant additional materials, including financial reports, donor or patron feedback, contracts, audit reports, and other supporting information.

Working with Consultance Accounting’s specialized nonprofit accounting team can ensure that your nonprofit board reporting is completed consistently, accurately, and efficiently. Consultance can save your nonprofit organization time while supporting your team in answering questions from the board and providing any additional information your board requires. Contact us today to learn more about how we can assist with your nonprofit board reporting.

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