How to Be a More Impactful Treasurer
How can treasurers step up their game and be more influential as a Board leader? The answer lies in expanding the traditional treasurer role beyond financial reporting and protecting the organization’s financial assets. Enterprise risk management (ERM) is very important, but treasurers have so much more to give.
Although treasurers generally have high trust of their fellow Board members, management and staff, their role is often overly narrowed by the perception that their sole purpose is to be the key steward of financial performance reporting and the watchdog for mitigating financial risks. Treasurers need to leverage their high trust factor to expand their role at the leadership table and use their unique platform to advance mission, sustainability, and culture.
These are my top three tactics to help treasurers expand their sphere of influence and leadership involvement:
1. Expand your treasurer leadership role beyond just presenting financial statements
Financial reports are produced monthly. The treasurer will always be involved at some level with the oversight, analysis, and communication of financial reports. Make sure this is not the only time that the voice of the treasurer is heard. Every Board and management decision has an impact on the organization’s financial position. Use this influence to participate at a higher level in Board and management decisions, pivoting and balancing between advancing mission and managing financial resources. As a treasurer, do not only lead with the expected financial impact in these discussions. Try leading with mission advancement and impact, weaving in financial optimization strategies as a means to support the mission.
2. Work to meld your stewardship of financial performance with empathy
I like to say that numbers are black and red (surplus and deficit, gains and losses, and positives and negatives) with no gray area. Use empathy to soften the blunt force of numbers and add a warmth of gray to complicated decisions. Recognize that most decisions cannot be decided by financial performance alone. An important program that operates at a net loss could have other ROIs (returns on investment). For example, the program may provide valuable brand exposure or may be highly appreciated by funders and donors who support other key programs. Also recognize that a financial decision can bring collateral financial hardship. A decision to discontinue a program that on paper will save financial resources could cause financial hardship for staff who are losing their jobs and constituents who will lose access to life sustaining services. Use empathy to consider collateral impacts, explore options, and mitigate damage while still balancing the protection of financial resources.
3. Steer decision-making to balance short-term financial performance with long-term goals and sustainability
Do not make the mistake of over-relying on short-term KPIs (key performance indicators). Often short-term financial performance could look really promising while hiding long-term mission and financial weakness. Always consider the potential long-term benefit when making current period decisions. So often I have seen decisions that helped current year budget performance but sacrificed long-term financial health and mission performance. Keep the focus on the long-term even when reporting the current financial position. Investment in additional staff and new programming might lead to current period losses, but still be vital to the long-term change and evolution necessary to reposition an organization for the future.
Planning Tip – Treasurers need to be more involved in two-way communication opportunities, putting themselves in positions where they can be an integral part of solutions and not just confined to reporting on financial performance. Make sure you are not just chairing the finance committee. Consider actively participating in other program, development, and strategic planning committees. These committees will benefit from knowledge and input from the treasurer position, while you as treasurer will gain insight and empathy for the many challenges facing the organization.
Expanding the peripheral vision of treasurers and opening new opportunities for treasurers to participate in planning and problem resolution will benefit nonprofits in many ways.
