Most nonprofit boards have a finance committee made up of at least one or two financial experts who do the heavy lifting when it comes to financial management. Among the committee’s responsibilities include routinely reviewing the budget and performance related to the budget, ensuring financial reports from staff are timely and accurate and making financial policy recommendations to their board.
Many camps rely heavily on their finance committees to manage much of the financial oversight but EVERY board member should, at a minimum, know how to read the following financial statements:
- Budget (Statement of Activities or Income Statement) – this shows your camp’s financial operating results, income, and expenses over a given period of time (like monthly, year-to-date, quarterly, or annually)
- Financial Position or Balance Sheet – this shows your camp’s assets, liabilities, and net worth (net assets) at a particular period in time (the reporting date)
- Statement of Cash Flows – this shows the actual flow of cash into and out of camp
But most likely not all board members will feel comfortable or competent interpreting financial statements or conducting a budget review. Therefore it’s important that financial literacy training be provided to members on a regular basis and ideally be included as part of new board member orientation. The goal of these trainings should be to develop a baseline level of knowledge that members can use to assess your camp’s financial stability.
I came across this blog post by Stephanie Cory called: Take the Fear out of Financial Statements. It includes a sample budget sheet and income statement and explains the benefits of cash vs accrual accounting.
And take a look at Andy Kaplan’s presentation about Financial Literacy from the JCamp 180 Annual Conference if you want to learn more on this topic.
Bottom Line: The more your members as a whole understands their financial responsibilities, the more accountable and better positioned your camp will be.
Written by Tara Acker. Tara is a Mentor with JCamp 180. Her focus areas at JCamp 180 include Jewish Camp Branding, Day Camps, financial literacy for Jewish Camps, and organizational development.
Who we are: JCamp 180 is a program of the Harold Grinspoon Foundation (HGF). Our goal is to significantly enhance the long-term effectiveness of nonprofit Jewish camps in North America. To meet this goal, we provide affiliated Jewish camps with consulting services, annual conferences, shared resources, professional development, and matching grant opportunities. Find more at www.jcamp180.org