Finance Unlocked for Nonprofits Boost #1

First, let's remember what we talked about.

The goal of this quiz is not to test your knowledge, but rather to reinforce the most important pieces that you learned about nonprofit boards. If you don't answer a question correctly, don't worry. Read the correct answer and think about why how this applies to your board.

As always, if you have questions please get in touch with us: learning@washingtonnonprofits.org or (855) 299-2922.

QUESTION 1: A BALANCE SHEET might have which of these on it?
A) Assets
B) Budget
C) Reserves
D) Liabilities

Hint

QUESTION 2: Accounting rules recently changed. Your balance sheet should now show your NET ASSETS divided into what two buckets?
A) Board reserve / all other funds
B) Without donor restriction / with donor restriction
C) Assets / liabilities
D) Cash / cash equivalents

Hint

QUESTION 3: Three of the following statements about an INCOME STATEMENT are true. Which ones?
A) It covers a period of time.
B) It typically includes your budget, your financial plan.
C) It shows your overall net worth.
D) It includes actuals, or true financial results.

It is important to understand the basics of Balance Sheets and Income Statements so that your board can make good decisions. Think about a decision that has come—or will soon be coming—in front of your board. What INFORMATION could you get from these financial statements that could INFORM YOUR DECISION?

Hint

Second, watch this video

We talked about the Balance Sheet, a snapshot of your organization’s finances at any time. This is one of two financial reports a board member should get on a regularly basis. Watch this video to refresh your understanding of a Balance Sheet and what 3 things you should be thinking about.

Third, take Two Steps Forward

We invite you to take two steps forward from where you are now. Here are two topics to explore and bring back to your organization.

  1. Deepen your understanding of the three lenses of decision-making. If you have attended the Boards in Gear training, you know that boards can look at any issue through three lenses: fiduciary (oversight), strategic (foresight), and generative (insight). Boards often start with oversight and move into strategic thinking (then generative discussions). Some issues are better going the other way: start trying to make sense of an issue and then work towards financial stewardship.
  2. Become a financial leader. In “An Executive Director’s Guide to Financial Leadership,” Kate Barr and Jeanne Bell outline 8 “must do’s” to move from management to leadership. Have your board read the article. As an activity, hand out the last page and invite people to circle the issue they feel is most needed or they most want to work on.

 

 

Fourth, share what you’ve learned

Find the entire Finance Unlocked for Nonprofits curriculum, videos, kit, and key documents here. Invite fellow board members to watch a video.

Have questions? Connect with your peers in the nonprofit sector through the Next Level Nonprofit LinkedIn group.