The Strauss Blog

Boost Your Association’s Financial Knowledge

One of the things I have noticed in my experience as an accounting manager is that when it comes to association finances, in many cases the only people familiar with them are the finance staff and board members. Most of the time this is because that is how it’s always been done. Sometimes board members, staff or association members may be purposely unaware of an association’s finances because they are simply afraid of dealing with numbers.

For some people it can feel like a foreign language, but numbers do not need to be scary. In fact, some of the anxiety of dealing with association finances can be reduced by educating the people involved with money and budgets and showing them how different parts, including their own work, contribute to the whole.

What to Learn

A great starting point when educating board members, staff or association members about an association’s finances is to offer the opportunity to understand standard financial statements, how to read them and what questions to ask. More about this topic can be found in my previous article, The Basics of Reading Association Financial Statements.  Another article you may find useful is Cash Flow Management for Volunteer Board Members.

To begin educating an association’s non-finance staff and volunteer board members, the best place to start is to show them how to create and manage a budget, since this is not something that comes naturally to everyone. Including more people in the budgeting process is a great idea and often you will find that they are able to jump in and help and subsequently will start to take real ownership in the process. Two ways to help them get started would be to work through it the first few times together or provide a template as a starting point.

Ultimately what it comes down to is that understanding the numbers is essential to making smart decisions for and about the association. It’s important that board members are getting clear answers to their questions so they learn from them for future situations and can use their understanding to make decisions that are crucial to the association’s future.

In addition, financial professional development opportunities are available to all board and staffing levels from various sources. For example, LinkedIn offers courses through their inLearning program that offers a month of free learning. Also, https://www.mtec.mb.ca/business-workshops.asp offers education sessions that deal with financial topics. Attending sessions like these can help everyone see why understanding financial concepts are important to the association.

Transparency is Key

Involving more board members, staff and association members in the financials also creates a culture of transparency, which is another growing trend in financial reporting. Having more people involved in the financials aspects of the association will mean that more people are able to see and understand more of the financial data than in the past. This creates an environment of understanding and trust and instills greater confidence in the association from its stakeholders.

Often the financial reports are shared with the board, but sometimes association staff and/or members can be left in the dark. If someone who was not intimately involved views financial data, it may prompt them to raise questions about why something is done a certain way and how it can be improved going forward. Plus, with fresh eyes, they may catch something that someone else has missed!

Educating association board members and staff about an association’s finances doesn’t just help them do their jobs better to help the association, it may also help them personally. It’s an investment in your staff and members. When people understand the bigger picture, they feel more connected and association leaders have better buy-in from them.

The idea that finance is solely the concern of an association’s finance department is an idea that is growing increasingly outdated. In a lot of smaller organizations all of the financial responsibility may fall on the CEO. Having board members, staff and members understand how their involvement affects the association’s bottom line is crucial. Board members with stronger financial knowledge are able to make better decisions regarding the future of the association. Staff with financial knowledge are more likely to consider whether certain costs are necessary and actively work towards the betterment of the association. And association members with more financial knowledge will be able to understand if the association is meeting its goals and whether their membership in the association is meeting the needs, they intended for it to meet.

In all, a more effectively and efficiently run organization!