Not-for-Profit Organizations Overview

Providing information that is complete, clear, and unbiased.

Delivering services promptly and consistently.

Providing services in a competent and skilled way.

A duty of loyalty to their employer and profession, as well as to the organization.

A duty to their superiors and ultimately to the board of directors.

A duty to the organization's stakeholders.

Organizations that exist to benefit society and not for personal financial gain.

NFPOs that serve specific user groups, such as professional associations or sports groups.

A budgeting approach where every expense must be justified each budget cycle, starting from zero.

A method of budgeting that aligns financial targets with a company's strategic objectives. It uses financial and non-financial measures to monitor performance.

A visual tool that maps the relationships between a company's strategic objectives, goals, and actions.

A method of analyzing a company's financial ratios to assess its financial health and performance.

A budgeting technique that focuses on the timing of cash inflows and outflows to manage liquidity efficiently.

Analyzing variances between actual results and budgeted figures to identify areas of deviation and potential improvements.

Comparing budgeted costs to actual costs under different activity levels.

The difference between the actual production volume and the originally budgeted volume of activity.

A non-profit organization that is registered with the Canada Revenue Agency and meets specific requirements to qualify for charitable status.

A non-profit organization that's incorporated under the Canada Not-for-profit Corporations Act (CNPCA).

Financial statements that show the overall financial position of an organization.

Financial statements that focus on the specific activities and outcomes of a particular program.

A requirement for registered charities in Canada to file an annual tax return form.

A requirement for incorporated NFPOs that are not registered charities in Canada to file an annual tax return form.

A requirement for NFPOs incorporated under the Canada Not-for-profit Corporations Act (CNPCA) to provide annual financial statements to their members.

An organization that raises funds from the public through donations, grants, or memberships.

The authority granted to the executive director to deviate from the approved budget.

A financial document outlining planned income and expenses over a specific period.

Comparing actual financial performance to the budget.

A system designed to track revenue and expenses by program.

Explaining significant deviations from the budget.

External auditors examine the financial statements of a non-profit organization.

The auditor's responsibility to report findings to both the governing body and management of an NFPO.

Auditing standards for external auditors.

A policy detailing the responsibilities of each board officer, term length, and eligibility for multiple terms.

A document outlining ethical conduct for board members, including confidentiality, conflict of interest avoidance, and commitment to organizational values.

A document outlining the organization's mission, vision, values, and goals.

A document that specifies the structure and operations of an organization, including roles and responsibilities, voting procedures, and meeting guidelines.

The senior board officer responsible for leading board meetings and overseeing board operations.

The board officer who assists the Chair and assumes leadership in their absence.

The collective responsibility of board members to ensure that the organization operates ethically and effectively.

A process for evaluating the effectiveness of the board's performance and identifying areas for improvement.

Governance in NFPOs involves establishing guidelines and structures to ensure the organization functions effectively, ethically, and in line with its mission.

Members, the board of directors, employees, and volunteers each have distinct roles and responsibilities in an NFPO. Members typically have voting rights, the board oversees the organization's direction, employees execute daily operations, and volunteers contribute their time and skills.

The board of directors plays a crucial role in setting policies in areas like organizational strategy, financial management, fundraising, program development, and risk management. These policies guide the organization's decisions and ensure sustainable operations.

NFPOs operate with a strong ethical compass. Principles like transparency, accountability, integrity, and fairness guide decision-making and ensure the organization acts responsibly towards stakeholders.

Internal controls are systems and processes implemented within an NFPO to safeguard assets, prevent fraud, ensure accurate record-keeping, and promote efficiency and effectiveness in operations.

Budgeting serves as a vital planning and internal control tool. It outlines projected revenues and expenses, allowing NFPOs to track performance, manage cash flow, and identify potential risks or deviations from plans.

The external auditor's role is to provide independent assurance regarding the fairness of the NFPO's financial statements. They assess internal controls, review financial records, and issue an opinion on the financial health and reporting accuracy.

The external auditor's duties include communicating their findings to the board and senior management, providing recommendations for improvements, and reporting any material weaknesses or fraud to the relevant authorities.