Working as a Team: Forming your advisory financial committee

Running a successful nonprofit requires many diverse skill sets, from experts in your particular field to fundraising and event pros. Unfortunately, one area where many otherwise thriving nonprofits lack experience is financial and money issues. This critical knowledge is a must-have for both long-term growth and short-term stability, but it can be challenging to attract suitable help. That’s where advisory finance committees come in.

This unique partnership helps nonprofits get the help they need while offering an opportunity for experienced finance-minded people to give back to causes they care about. Let’s take a closer look at how it all works.

Why Financially-Minded People Matter

Financial literacy isn’t something that can be gained overnight. It often takes a lifetime of study, observation, and experience to develop an intuition about the best ways to run organizations like nonprofits. This isn’t always a priority for dedicated nonprofit professionals, who may spend more of their time focusing on the issue or cause their group is involved with, as well as programming, donor relations, and event planning decisions.

However, financially-minded folks are crucial for a variety of reasons. They can provide guidance on:

• Budgeting
• Investments
• Risk management
• Complex compliance and legal issue

All are necessary for keeping the lights on and charting the organization’s path ahead.

Building an Advisory Finance Committee

Rather than hiring an extensive finance department, many nonprofits can instead create an advisory finance committee.

This generally consists of a group of financially experienced individuals who are interested in helping out the nonprofit and advancing its goals. Members volunteer a few hours a month to provide their services and attend meetings to make recommendations and guide policy.

Like any committee, getting a diverse mix of backgrounds and experience is vital to ensure all perspectives are considered. It’s also crucial to ensure members are available as needed and committed to the role over the long term.

Steps to Establish an Advisory Financial Committee

Putting together your advisory finance committee is a straightforward process but also one that should be undertaken carefully. Here are the steps you need to know.

Identifying Potential Members

In some cases, larger nonprofits may have people with the experience necessary within their base of donors and supporters. Making a list of these folks and reaching out to them can fill most spots on many advisory committees.

Newer organizations or those needing specific skills can also reach out directly to professionals who are known to share the nonprofit’s values and goals.

Articulating the Committee’s Purpose

While some new and potential members may be familiar with advisory finance committees, others may not. Take the time to educate them on the committee’s role and responsibilities.

This is also an excellent opportunity to explain how the panel contributes to the organization’s overall mission, showing how and why their work is so valuable.

Structuring Committee Meetings

Everyone’s time is valuable, especially when they’re volunteering to help your organization. It’s critical to establish a regular meeting schedule (typically monthly, quarterly, or semi-annually) and format for the convenience of both committee members and nonprofit employees who wish to collaborate with them.

Each meeting should have an agenda that addresses the relevant financial issues, challenges, and opportunities that need to be discussed.

Ensuring Effective Collaboration

Advisory finance committees work best when they’re as collaborative as possible. Leaders should work to foster open communication between members and the board, especially when it comes to strategic planning and problem-solving. This can naturally improve over time as both sides get to know one another.

Empowering the Advisory Financial Committee

So how can nonprofits make the most of their advisory finance committees? Here are the keys to helping them help you.

Providing Access to Information

For the best results, provide committee members full access to all relevant financial data and reports. This offers critical insight into the organization’s financial landscape.

Without seeing the whole picture, their advice may be wrong or incomplete.

Encouraging Thought Leadership

You’ve selected these members for their experience and guidance – now, make sure they use it!

Invite committee members to engage with issues in their wheelhouse, giving special care to diverse perspectives and expertise.

Recognizing and Acknowledging Contributions

Make sure your committee members know just how much you appreciate their time and expertise.

By making them feel valued, you’ll encourage them to continue their service and keep working with as much dedication as on their first day.

Showcasing the Impact

It’s worth the time to highlight the impact of their dedication and achievements, as well as their overall influence on your organization’s financial health. Share success stories and make sure they celebrate financial milestones alongside the board and full-time staff.

Incorporate a Financial Advisory Committee into Your Nonprofit

While the mission of any nonprofit is critical, keeping the lights on and the doors open is equally vital. That’s why it’s so important to establish and properly use an advisory finance committee. These crucial groups can help nonprofits get the big, often complicated financial decisions right to enable them to do the work they care about.

If you’re searching for higher-level financial support, reach out to The Charity CFO today to learn how we can help.