This is an excellent, very short, but pertinent article by Ben Youssef. It asks exactly the question that we so often overlook. How often have I seen boards spend valuable board time on developing a future direction but then completely ignore translating the financial implications of future strategies into the budget.
Enjoy the read.
August 31, 2016 By Ben Youssef
Does the budget reflect our priorities?
I return to Chait, Ryan and Taylor’s Governance as Leadership for this week’s “inquiring boards” question. It is an excellent example of fiduciary inquiry – not just tending to spreadsheets from a “do the numbers add up” perspective but really asking if we are good stewards of our funds and our mission.
Some boards spend a lot of time tending to the financials and to oversight functions. That is an important element of governance, clearly. But if all we only ask “Is the budget balanced?” and ignore this question about how that budget feeds our stated priorities, we fall short of our fiduciary responsibilities. I’ve seen too many boards – including boards where I served – miss that critical piece.
- Are we funding our core services at a level that sets them up for success?
- Do we have the staff we need to provide those services? Are they qualified for the responsibilities we assign them, and are we compensating them fairly?
- Are we meeting community needs, and how is that demonstrated in how we allocate our resources?
- Are our funding sources diverse enough to ensure that we are still viable if one takes a hit or disappears?
- Do our grant sources fund stated, mission-advancing priorities; or are we simply following cash where we find it?
- Are our fundraising expenses (including events) in line with the funds gained and the staff and volunteer resources required to generate them?
- Are our financial processes sound? Does our billing system work as it should?
- Does our board receive the information it needs, in a form members find useful, so that the budget can be used as a resource in decision making?
How can you use this question to spark a discussion about how you are supporting your priorities? What additional questions do you need to ask to take that conversation deeper and in a meaningful direction?