Financial Management |
Article by Phil Tahey, independent consultant, and Ron Salluzzo, Attain, LLC
From the July/August 2020 Net Assets magazine
The following is not an uncommon scenario in higher education — is it the case at your school?
Members of the school’s board of trustees are committed and willing to help the institution in any way they can. Yet despite being leaders of their own companies or organizations in various industries, even members of the finance committee may struggle to comprehend the unique fundamentals of nonprofit educational finance and do not always fully understand the numbers presented to them at board meetings. Finance committee meetings, held only three or four times annually, address topics that are not critical to the institution. Committee members received plenty of data but little context or analysis.
By Phil Tahey and Ron Salluzzo
Foreword by John Gulla
Each chapter includes
Seeing an opportunity to elevate boards’ strategic discussions and decisions regarding schools’ fiscal health, we have partnered with NBOA and authored “Effective Financial Governance for Independent School Trustees.” This follows a similar volume we wrote in 2018 for smaller private colleges, which often struggle financially and need effective oversight. After working with NBOA and NAIS for about four years on the Composite Financial Index to help school leaders make long-term strategic decisions about their financial future, we have now developed a finance primer for independent school trustees. This publication was reviewed by a dozen leaders in independent school governance and finance to ensure it addresses the top issues faced by boards today.
The book aims to help boards and finance committees understand the business model of a nonprofit K–12 independent school and enhance comprehension of their stewardship requirements. The book not only provides background knowledge but outlines questions for trustees, particularly those serving on financially-charged committees, to ask the school’s finance management team. It also references NBOA tools and resources to help both school management and the board ensure the financial health of their schools in perpetuity.
All board members, whether they are on the finance committee or not, are responsible for sound financial governance at their schools. This fiduciary responsibility is statutory, as defined in federal and state not-for-profit statutes and regulations. Beyond that, financially literate boards govern more effectively. We firmly believe that finances are either an enabler or an inhibitor of the school’s strategies, goals and action that are needed to attain the school’s mission and vision.
Purchase at nboa.org/books.
Process and Content
Download a PDF of this article.
Projections: A Truly New School Year (September 2020)
Practical Guidance During Unprecedented Times (April 2020)
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