Investment Management: The Non-Profit Corporate Officer's Role

Non-profit organisations are typically run by a board of directors, who are responsible for overseeing the high-level legal and financial management of the organisation. The board of directors appoints the officers of a corporation according to company bylaws. Officers are usually appointed to manage the daily affairs of the corporation, and they almost always have the authority to legally bind or act on behalf of the organisation. The treasurer is the individual in charge of the financial management of the corporation, including routine bookkeeping, payroll and disbursements. They maintain the organisation's books, file tax returns and supply a complete financial report, including bank statements, for each board meeting.

The Chief Financial Officer

The CFO is typically appointed by the board of directors and may also serve as a member of the board. In smaller organisations, the CFO may handle routine financial tasks, while in larger organisations, they oversee the financial health of the non-profit.

The CFO's responsibilities include managing the finances, maintaining financial records, filing tax returns, and providing financial reports for board meetings. They play a crucial role in ensuring compliance with regulatory guidelines and financial requirements.

In addition, the CFO must also be vigilant against any appearance of financial conflict of interest. They are responsible for monitoring employees and volunteers to ensure they are not benefiting financially beyond board-approved salaries.

The CFO works closely with the board of directors and other officers to ensure the smooth financial operation of the non-profit and to safeguard the public's best interests.

The Treasurer

In larger organisations, the treasurer role may be filled by a staff member appointed by the board, so that volunteer directors are not involved in the daily financial management of the nonprofit. In some cases, a board member may be given the title of treasurer, and then a staff member is appointed as their assistant.

The President

In some organisations, the President may be the chair of the board, in which case their primary role is to run board meetings and oversee board matters. The President is usually appointed by the board of directors and may be a paid or volunteer staff member.

The Board of Directors

It is important to note that there is a distinction between directors and officers. Directors have a vote on matters before the board and are responsible for contributing to the control of the corporation's affairs and activities. On the other hand, officers have individual duties related to managing specific aspects of the corporation's activities and affairs.

In terms of financial management, the board of directors is responsible for protecting the public benefit. They monitor the use of funds acquired from corporate sponsors and philanthropists, review and approve monthly financial reports, and set policies and directions for the officers to carry out. The board also assists with fundraising efforts and is expected to donate money themselves.

To ensure the smooth functioning of a non-profit organisation, it is crucial for the board of directors and officers to understand their respective roles and how they complement each other. This helps to minimise the risk of conflicts of interest and ensures effective decision-making and day-to-day operations.

The Chief Executive Officer

The role of the CEO varies between organisations, but there are some common responsibilities. These include leadership, fundraising, board development, financial management, human resources, diversity, equity and inclusion, operations and technology, programs and activities, community relations and communication, and compliance and best practices.

Leadership involves articulating the nonprofit’s vision, mission, theory of change, statement of need, unique value proposition, and overall strategy and direction of the organisation. The CEO is also responsible for building alignment across the organisation, serving as the "Chief of Enthusiasm and Optimism", and asking hard questions to guide the organisation.

Fundraising is a key part of nonprofit leadership, and the CEO must provide fundraising leadership and ensure the funds are available to execute the budget. This includes creating the conditions for fundraising success, such as vision, materials, and pitch, and making themselves available to the development staff and board development committee.

Board development involves building, sustaining, and strengthening all board functions, like meetings, policy compliance, and committee work. The CEO should also work to build alignment while maintaining role clarity and supporting the board in their operations, administration, planning, and information dissemination.

Financial management requires the CEO to demonstrate competence in reading, creating, and understanding financial documents, including budgets, cash flow, income statements, balance sheets, and statements of functional expenses. They also need to be familiar with the basics of tax returns, audits, and compliance.

Human resources is another important aspect, encompassing onboarding, recruitment, retention, management, development, and compliance. The CEO is responsible for delegation, decision-making, creating clear staff roles, and supervising collaborative tasks.

In terms of diversity, equity, and inclusion, the CEO will be constantly challenged to ensure that women, people of colour, LGBTQ people, people with disabilities, or religious minorities feel respected and included in their roles. This involves dismantling inequities, training, ongoing conversation, and learning.

Operations and technology is another key area, where the CEO must create the conditions for success at all levels within the nonprofit. This includes ensuring that vendors and staff get paid, obligations are met, meetings aren’t missed, and there are safe working conditions and the necessary hardware and software in place.

The CEO also plays a crucial role in programs and activities, working with the board, staff, and stakeholders to ensure that the mix of programs and activities aligns with the organisation's mission. They set the organisation’s strategy and achieve outcomes, balancing charity vs advocacy, for example.

Community relations and communication is another aspect, where the CEO should develop and maintain strong relationships in their sector and region, with peers, donors, industry associations, and the media. They should also communicate regularly with stakeholders and the public through impact reports, annual reports, public events, or newsletters.

Finally, compliance and best practices are essential to minimise risk. The CEO must stay in compliance with all laws and regulations and create systems to monitor this. They should also ensure the organisation meets the highest standards in its industry and region.

Overall, the role of the CEO in a non-profit organisation is complex and varied, requiring strong leadership, strategic thinking, and a clear understanding of the organisation's mission and goals.

Frequently asked questions