The Mystery of Nonprofit Financials with Rob Lane

On episode 8 of I 501(c) You, we are speaking with Rob Lane, Managing Shareholder of Kerkering Barberio and board member of several organizations. Rob helps us clear up the mystery of nonprofit financials and the responsibility of the board. We have worked with Rob through several organizations. He is deeply entrenched in the community and provides assistance to so many organizations locally. His expertise and dedication to giving back has truly made a positive impact on our community.

Rob shares some great information about what a board member should understand about financials, which financial statements a nonprofit organization should be producing and sharing with its board, and the form 990.

We also dive into some financial best practices board members should be participating in, the differences between the audit, finance, and investment committees, and we touch on deferred compensation.

We had a great time speaking with Rob, and we love discussing nonprofit financials because we know how important it is and how misunderstood it can be.

Key Takeaways:

1. Know how to best engage your board members. Each one has a unique skill and expertise, set yourself up for success by having them help you with what they are best at.
2. The 990 is one of the most transparent documents you will share with the public. It is important that more than just the accountant and CPA firm are involved with the creation of the 990.
3. Ensure you have controls around restricted gifts. You want to be able to show your donors that you can preserve their intentions.

Timestamps:

00:45 - Interview starts

01:57 - Rob’s experience serving on Boards

03:17 - What should a board member understand about the finances of an organization?

05:00 - How those who are not finance professionals can still provide assistance to the organization in discussions about finance

06:40 - Which financial statement should a nonprofit organization produce?

09:55 - When should those financial statements be produced and shared with the board?

10:45 - Investment, finance, audit committees

11:58 - Does every nonprofit have to have an audit?

13:30 - Difference between an audit and review

16:20 - The auditors can help you improve your operations

18:12 - Should there be interaction throughout the year between the auditing firm and the organization?

19:15 - The Form 990

23:11 - Are there best practices you regularly see?

25:00 - Amount of reserves you encourage an organization to have?

26:35 - When would you start considering an endowment?

28:06 - Deferred compensation in nonprofit organizations

29:58 - Any last thoughts?

33:54 - Recapping with Read

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