As part of our pro bono commitment in the Quad Cities, attorneys at Lane & Waterman serve as speakers at the United Way of the Quad Cities Non-Profit Board Governance Series. Our attorneys collaborate with Deere & Company attorneys and another local law firm to provide guidance on legal issues related to employment law, contractual agreements, financial oversight, and tax matters.

Sam Skorepa, who practices in our Wealth & Succession Planning group, shares his outline from the Fiduciary and Board Best Practices presentation.

1. Ensuring the Financial Viability of the Organization
   • Securing funding
     • Grant writing – Most often led by non-profit staff
     • Marketing materials
     • Fundraising activities
     • Compensation of Directors –Most directors serve in a volunteer capacity.

2. Budgeting: Financial Responsibility Begins With a Budget
   • Establish a Budget/Finance Committee
     • Familiar with prior years activities and strategic plan
     • Desire to serve entire organization rather than a particular project
     • Some knowledge of budgeting (personal or business)
   • Define a budget timeline
   • Develop expected revenue and expenses
   • Prepare final budget
   • Present budget to board for approval
   • Keep budget top of mind-Do not just set aside after it is approved
3. Conducting Financial Audits
   • The board should perform or authorize an external annual audit
   • General Guidelines
     • Total Gross Revenue greater than $1 Million = Independent audit
     • Total Gross Revenue between $250K and $1 Million = Independent CPA
     • Total Gross Revenue less than $250K = Internal audit with outside assistance as needed
   • Audit or financial statements should be made available to all funders, government, and regulators upon request
4. Preventing Against Fraud/Embezzlement
   • All organizations are susceptible
   • Board should be aware of who has access and request ongoing financial information
   • Create a system for checks and balances
   • Develop a Whistle Blower Policy-Report of Fraud
   • Regulatory Issues
     • Proper reporting (timely filing 990’s)
     • Restricted grants (if required, provide reports to funders)
     • Cost of fundraising vs. funds raised
5. Best Practices
   • Board of Directors
     • Ensure independence from executive director/management
     • Diversity in membership (expertise and experience)
   • Bylaws
     • Regularly review of bylaws
     • Consider establishing term limits
     • Allow for alternative meeting structures
     • Create committees, if appropriate
       • Examples: Governance, Finance, Executive, Fundraising, Program
   • Effective meeting planning
     • Clear, focused agenda
     • Schedule time for discussion
     • Attend meetings!
   • Assessments
     • Should review key organizational staff
     • Board should conduct self-assessments
     • Organizational assessment (strategic planning)
   • Continuously review best practices and board effectiveness