National Center for Charitable Statistics

The Nonprofit FAQ

Does an NPO really need a Treasurer?
Paul Zakian wrote in the mid-1990s:

"I am the newly appointed
treasurer of a not-for-profit organization and I need clarity on the
responsibilities of such a board. Are there any guidelines or resources
available that would provide this information? Web sites, ftp addresses,
or any email would be appreciated."

There are several articles relating to this question in the section on Boards of Directors, see

Andrew Swanson replied:

Paul ...

I don't know the size of your organization and its staffing. However, as
a nonprofit grows, the need for a treasurer on the board tends to
diminish. When there is staff keeping the books and there is a budget,
monthly financial reports (Income and Expense Statements stated against
that budget and a Balance Sheet) all produced by staff the treasurer
winds up simply parroting to the board what has been produced by
financial staff. Without mixing into operations (a large NO-NO for any
board member(s)) the treasurer really has no way to validate the
adequacy of the report. Carver in "Boards That Make A Difference"
(Jossey-Bass, 1990) refers to the treasurer in such an organization as a
"vestigial organ." A sentiment many treasurers would wholeheartedly
agree with - and yet, the bylaws usually have paragraphs of duties for
which the treasurer is held responsible but lacks the means to discharge
the responsibilities. In such a situation I would refuse to risk holding
the position.

(Or it might be time to have a general review of the duties assigned to the officers in the by-laws so the text aligns more closely with the way the board actually sees itself supporting the organization's mission and operations. PB - 4/13/01)

Of course, if you are small or a start-up organization, the board
treasurer may actually keep the books, write the checks, etc. In
slightly larger organizations the treasurer may provide guidance to an
executive director who lacks skills in this area. But bear in mind that
as the small organization becomes larger and more complex, changes must
occur on both staff and board levels and structure.

Besides Carver's excellent full length book, my own shorter paperback
"Building A Better Board - Book One - A Guide To Effective Leadership",
The Taft Group, 1992, 1-800-877-TAFT, offers the help you seek.

California attorney Gregory Wonderwheel commented on this exchange on February 5, 2007:

The [discusion above] creates the mistaken impression that a non-profit can do without a Treasurer simply by relying on "fiancial staff". In California (and in most if not all of the US) a nonprofit corporation is required by law to have a Treasurer or Chief Financial Officer so there is no option to do without one or the other. There may be both, and in that case then the Treasurer is funcationally a fifth wheel. But since either a Treasuerer or CFO may be a board member or paid staff, it is up to the nonprofit corporation to configure its officers in the way that works best. If the top financial staff can carry the corporate responsibility for the financial condition, then if the Board doesn't want to have a volunteer director designated as the Treasurer it needs to pass a resolution designating the chief financial staff person as an officer of the corporation under the title of Treasurer or Chief Financial Officer.

The bottom line is that every nonprofit needs to have a person, by whatever title, designated as the person who as an officer of the corporation is responsible for overseeing the financial condition of the NPO and reporting on that condition to the full board.

Modified 2/7/07 -- PB