Nonprofit Treasurer Duties and the Executive Director Partnership
What does a nonprofit treasurer do?
A nonprofit treasurer is the board officer who oversees the organization’s finances. Treasurer duties include reviewing monthly financial reports against the budget, presenting the annual budget, working with the accountant and auditor, and reviewing the annual audit. Staff and the bookkeeper do the daily work, and the bylaws set the details.
Nonprofit treasurer duties fit on one page, and your bylaws define them. The harder part is the partnership. An executive director and a treasurer can agree on every duty and still argue about who approves which purchases, especially when the treasurer knows far more finance than the executive director, or much less.
The duties below are drawn from BoardSource and the IRS, and the two cases are illustrative. For the rest of the money side, start with our guide to nonprofit finances.
Key Takeaways
- Most treasurer duties are oversight: the treasurer reviews, presents and asks questions, while the bookkeeper and staff do the daily work.
- Write down who decides what. The executive director spends within the approved budget, the board sets the budget and policies, and the treasurer reviews and advises.
- A 30-minute monthly meeting before the board packet goes out gives the board one consistent account of the money.
- A treasurer with deep finance experience needs agreed lanes the most, and a treasurer who has stopped reading the reports is harder to spot than one who micromanages.
What Are Nonprofit Treasurer Duties?
Nonprofit treasurer duties come in two layers. BoardSource describes three legal duties every board member carries: care, loyalty and obedience. On top of those, the treasurer chairs the finance committee, reviews monthly reports against the budget, presents the annual budget, works with accountants and auditors, reviews the audit and makes sure assets are protected under board policy.
BoardSource notes that several states write some version of these three duties into statute. In plain terms: make informed decisions, act for the organization rather than for yourself, and keep it within its mission and the law.
BoardSource’s description of the board treasurer lists the working duties:
- Chair the finance committee and answer board members’ questions about the reports.
- Review the monthly financial reports, compare expenses with the budget and income, and spot problems early.
- Present the annual budget for approval, after helping the executive director prepare it.
- Work with accountants and auditors, and review the annual audit.
- Protect the assets and see that investments follow board policy.
The IRS adds detail. The Form 990 instructions name the treasurer among the officers who can sign the return, and Part VI, line 11a asks whether every voting board member received the final return before filing. BoardSource adds that the board verifies the return is filed on time, so agree whether the treasurer leads that check.
Day-to-day finance stays with staff. The bookkeeper records transactions and the executive director runs operations, while the treasurer oversees. Your bylaws and state law set the specifics.
What Belongs on a Treasurer Checklist?
A sample nonprofit treasurer checklist runs on three cycles. Each month, review the financial reports against the budget and flag problems early. Each quarter, lead the finance committee through cash flow and reserves. Each year, present the budget, review the audit and confirm the Form 990 is filed on time.
| When | What the treasurer does | With whom |
|---|---|---|
| Monthly | Reads the statement of financial position and statement of activities, compares expenses with the budget and income, flags problems early, notes cash on hand | Bookkeeper and executive director |
| Quarterly | Leads the finance committee, asks whether projected cash flow is adequate and reserves are sufficient | Finance committee and executive director |
| Annually | Presents the budget for approval, reviews the audit where there is one, confirms the Form 990 is filed on time, reviews the financial policies | Board, auditor or accountant |
If the statements are new to you, learn to read the financial statements before the first monthly review. The annual row goes faster when the treasurer sees the draft budget early, and the executive director’s side of that work is in how to create a nonprofit budget.
Bring BoardSource’s fiduciary questions to each review, including whether the organization has “the appropriate checks and balances to prevent errors, fraud, and abuse.” BoardSource also names the procedures to define: signing checks, handling cash, approving expenses, credit card use and conflicts of interest. The financial policies a small nonprofit needs covers how to write them down.
Who Decides: Treasurer, Executive Director, Board?
In the sample split below, the executive director decides how to spend within the approved budget, the board decides the budget and the financial policies, and the treasurer reviews, advises and reports to the board. Write your own split down and check it against your bylaws, because an unassigned decision tends to become an argument about who owns it.
| Decision | Executive director | Treasurer | Board |
|---|---|---|---|
| Spending within the approved budget | Decides | Sees it in the monthly reports | Informed |
| The annual budget | Drafts and proposes | Reviews and recommends | Approves |
| Spending outside the budget | Proposes | Advises | Approves, or sets a limit in policy |
| Bank signers and approval limits | Follows the policy | Checks it is followed | Sets the policy |
| Hiring the bookkeeper | Decides | Consulted | Informed |
| Choosing the auditor | Consulted | Recommends, unless an audit committee does | Approves |
Treat the table as a sample to adapt: your bylaws and financial policies govern. For the board’s side of the split, see nonprofit governance best practices.
In the board and executive director partnerships we see work, both sides can say where governance ends and management begins, and they keep a regular check-in outside formal board meetings. The same test fits the treasurer seat.
A treasurer with deep finance experience can be a harder partner than one with less. Expertise without agreed lanes slides into management: someone who ran a corporate finance department sees a problem and starts fixing it. The table gives that expertise somewhere to go.
What Should a Monthly Treasurer Meeting Cover?
A monthly treasurer meeting needs 30 minutes, about a week before the board packet goes out, and three agenda items: what changed since last month, what worries either of you, and what the board needs to hear. The executive director runs it, and the treasurer leaves knowing what they will report.
An illustrative agenda for a $400,000 organization, in round numbers:
- What changed. “Revenue is $15,000 behind budget through September, almost all of it one foundation payment due in October.” What to notice: a timing gap and a real shortfall look the same on a budget report. Question to ask: is the payment confirmed in writing?
- What worries us. “Two restricted grants end in March, and nothing replaces them yet.” What to notice: a worry named in October is still a decision the board can make. Question to ask: what would we cut first if neither renews?
- What the board needs to hear. Two sentences the treasurer will say, agreed in advance. Question to ask: who presents which part?
Aim to say the first two items in your own words and let the treasurer add the detail. If that feels shaky, financial literacy for executive directors covers the short list worth knowing.
Agree on the story before the board meeting. Two versions of the same numbers turn a finance report into a question of whom to trust.
How Do You Onboard a New Treasurer?
Onboard a new treasurer with a handover packet in the first month and one working session with the executive director and the bookkeeper. The packet holds the documents the treasurer will oversee, and the session answers the question that shapes everything after it: what finance background does this person bring?
- The last two years of financial statements and the current budget
- The latest audit or review, with any letter from the auditor
- The last Form 990 as filed
- Bank accounts, signers and approval limits, plus the board resolution that set them
- The financial policies, including conflict of interest
- Open issues: late payments, grant reports due, anything the last treasurer was watching
A retired accountant and a program-minded board member who agreed to serve need different first months, so ask before you plan. For the rest of the board, see our guide to onboarding new board members.
What If the Treasurer Micromanages or Checks Out?
When a treasurer micromanages or checks out, go back to the decision-rights table before you talk about personalities. Name the decision that keeps causing friction, agree who owns it, and write it down. If the two of you cannot settle it, bring in the board chair before it reaches the full board.
An illustrative case: a retired corporate finance executive becomes treasurer of a $300,000 food pantry and asks to approve every purchase over $500. The executive director feels second-guessed. The treasurer sees one part-time bookkeeper and real risk. Both are reasonable. Options include a written approval limit set by the board, a monthly list of purchases above it, or a yearly review of the controls themselves.
A second illustrative case: a treasurer who has not opened the reports in three months and signs off at board meetings anyway. It is quieter and no safer, because nobody is checking. In the board partnerships we see, disengagement is more common than micromanagement and harder to detect. Ask what changed before you ask for a replacement. If talks stall, read the board chair’s responsibilities before you ask the chair to step in.
A coach might ask: what would you need the treasurer to trust, and what would they need to see to trust it? Preparing that conversation is the focus of coaching for executive directors carrying the finances. Coaching does not replace bylaws or your accountant, and when a problem is technical, such as a chart of accounts that needs rebuilding, we say so during matching.
Can a Nonprofit Treasurer Be Paid?
Whether a nonprofit treasurer can be paid depends on state law and your bylaws, so ask an accountant or attorney first. Federal tax rules add a limit: the IRS lists treasurers among the people in a position to exercise substantial influence over an organization, so any pay falls under its excess benefit rules.
IRS guidance says a charity may not pay more than reasonable compensation, and that officers’ pay should be set by people with no financial interest in the decision. Officer pay is reported in Part VII of the Form 990. A paid bookkeeper or outside accountant is a different job: staff or a contractor the executive director manages, whose work the treasurer oversees.
What Can You Do This Week?
This week, book a 30-minute meeting with your treasurer and bring a blank copy of the decision-rights table. Fill it in together, agree on three things each of you owns, and pick a standing date each month, about a week before the board packet. Then share the finished table with your board chair.
If that conversation feels hard to start, a coach can help you rehearse it. Volunteer coaches donate their time, which keeps fees 85%+ below market rate. Six sessions cost $300, $400 or $600 for organizations with operating expenses under $250,000, under $500,000 or over $500,000. Apply for coaching.
Frequently Asked Questions
What is the difference between a treasurer and a bookkeeper?
The bookkeeper is staff or a contractor who records transactions and produces the reports. The treasurer is a board officer who reviews those reports for the board. When one volunteer does both, the recording and the review sit with one person, so ask a second board member to read the reports.
Does the treasurer sign checks?
It depends on your financial policies. Some boards make the treasurer one of two signers above a set amount, and others keep the treasurer off the accounts so the review stays independent. Either way, write the rule down.
Does a small nonprofit need a finance committee?
Not always. In a small organization, the treasurer and one or two board members can review the reports before each board meeting and the budget before the vote. Check your bylaws, which can require one.
Is a nonprofit treasurer personally liable?
The treasurer carries the same duties as every board member, and personal liability rules vary by state. Ask your attorney what your state’s law provides and whether the organization carries directors and officers insurance.
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