There are many misconceptions surrounding All-Volunteer Organizations (AVO) when it comes to financial responsibility and requirements. All-Volunteer Organizations perform important work for the community, which requires resources. To do this important work, AVOs may procure and utilize substantial funds. Every AVO has at least one person (volunteer-leader) counting the cash, writing checks on behalf of the organization, safeguarding the AVO’s financial integrity, procuring insurance, and managing the funds.
What are “All-Volunteer Organizations (AVO)”?
Organizations whose volunteers carry out all or most of the organization’s operations. AVOs can range from small, informal nonprofits to large formal, affiliated organizations.
While many AVOs conduct their informal approach to operations, your organization should not treat finances in a similar fashion. When finances are treated casually, it creates a liability exposure where money can get lost, or cash and/or other assets can be stolen or damaged.
As a treasurer for an AVO, there are several accountability and transparency issues that need to be considered:
1. Handle money with high standards and set a tone of integrity
Keep close oversight of cash, checks, and deposits. It may not always be possible to be around when money is changing hands, but it is important to be visible enough that others know you are engaged. Be especially diligent about keeping personal funds completely separate from organizational funds. Below are a few essential rules must be followed:
- Treasurer should receive and reconcile the bank statements, or write checks, but not both
- Incoming checks should receive immediate restrictive endorsement (bank stamp, or handwritten “For deposit only, bank name, account #”), and be deposited within a week, with no cash back
- Outgoing checks should be supported by an approved invoice, receipt, or a voucher prepared by the volunteer if a receipt or invoice is not available. Without such documents, the treasurer should not provide a reimbursement check to the volunteer.
- Checks should require two signatures and never be signed in advance. The board may alternatively decide to set a policy that permits one signature for small checks below a certain amount (such as $50) in order to help discourage checks from being signed in advance.
- The board of directors should have a clear understanding of the financial protocols of the organization.
2. Identify and manage risk
Safeguard your organization’s assets, data, personal information, and property. Risks associated with volunteer screening, vehicle use, and special events are often particular concerns to AVOs. Also, focus on purchasing the appropriate insurance to protect the organization and its board of directors.
3. Confirm contribution
A prompt confirmation or thank you letter that includes the information donors need for tax purposes is effective in keeping contributors up to date. This information can be sent by email, in person, or by postal mail.
4. Track volunteer time
With AVOs, volunteer effort represents most of the resources inflow. Tracking volunteers can help protect volunteers and the nonprofit from liability exposure and provide helpful data for planning future programs and events.
All volunteer organizations must run their operations in a responsible manner and have the appropriate financial safeguards in place. Call us if you have any questions regarding the appropriate insurance or risk management policies. We are here to help!
* This article is intended for informational use only and not to be construed as legal advice.