The finances of a nonprofit organization can range in complexity from simple donations-based accounting to an organization that uses many grants and government funding.
Determining who should have access to financial information within your nonprofit organization depends largely on how complex your financing is, but three basic financial functions should always be present: clerical, operational, and strategic. As long as you have staff for all three of these functions, you should be able to have adequate control over your nonprofit’s finances.
Clerical Support Staff
Your nonprofit should have people who handle the organizational and clerical aspects of accounting. Basically, clerical staff assists by filing, copying, and making deposits. They provide support and take care of much of the mundane tasks necessary for meticulous bookkeeping. Only a basic knowledge of accounting principles is required, but attention to detail is crucial.
Operational staff takes care of a wider range of functions, including compiling financial statements and paying bills. This requires a greater understanding of nonprofit accounting, and therefore staff should have relevant experience managing grants and working for nonprofits.
Finally, strategic staff will guide the development of your nonprofit’s financial goals. This will include analytics and planning, and would require a high level of knowledge and skills about accounting and many years of experience.
It’s possible to cover all three of these areas without hiring a large full-time staff. Many smaller nonprofits will hire financial consultants to work on a part-time basis. You can also use accounting software, which takes much of the burden off of the clerical and operational staff, as well as helping with the analytics and planning of the strategic staff.
Whether your staff is large or small, your finances need to be clearly mapped out. Executives must have complete control over the financial functions of the organization. The people who have access to financial information within your organization should be part of your overall accounting strategy, either working in the clerical, operational, or strategic functions.