Power of Culture Blog
The Cultural Facilities Fund supports local economies across Massachusetts by ensuring our cultural institutions have the capital they need to build, expand, renovate, and continue welcoming visitors.
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In talking with cultural organizations across the state, a common refrain I hear is, “We love our board members, they do so much for us. But how can we get them to embrace financial literacy?”
What should board members know about your finances?
As organization leaders, we look for board members who have experience in for-profit business (Hooray! A banker! An accountant!) and then we are frustrated when they don’t understand how our financial model works. Or we welcome new board members who bring valuable experiences and connections, but they don’t understand financial issues.
Executive leaders do so many things to support new board members in learning how to be good stewards of our organizations. The ‘best practices’ of the nonprofit field tell us to have board orientation materials, mission statements, job descriptions, and to provide budgets and financial statements. We have board retreats, and policies on ethics.
Does that mean we need to conduct actual finance training?
Mostly no. Perhaps we assume that board members already have this knowledge. Perhaps we don’t feel confident of our ability to teach it. After all, many of us are in this field because of our passion for the mission, not because we want to be finance experts.
And yet a board member’s greatest responsibility is for the financial health of the organization. Sometimes we think a board’s financial responsibility only means raising funds.
But that’s not true.
So what should leaders of organizations be doing? (And by leaders, I mean the Executive Director if there is one, or the Board Chair. Or even better – both, working together.)
If you are looking for materials for board or staff finance training, there are a lot of high quality, free materials available. I suggest looking at the resources provided by BoardSource, or the National Council of NonProfits, especially: