1. Good Board Practices 1.Keeping your charitable status in good order 2.Reading financial statements 3.How (and why) to budget

2. Good Board Practices It’s sometimes the Board’s job to do the work. It’s always the Board’s job to make sure the work is done.

3. 1.Charitable Status What is charitable status? a right? a benefit? a privilege? a designation −granted by the government −to organizations the gov’t judges to provide a public benefit

4. 1.Charitable Status What use is charitable status? tax-free land & buildings −(sometimes) “profit” not subject to tax ability to give out tax receipts plus…

5. 1.Charitable Status getting it keeping it losing it getting it back http://www.cra-arc.gc.ca/chrts-gvng/lstngs/menu-eng.html http://www.cra-arc.gc.ca/chrts-gvng/chrts/chcklsts/menu-eng.html

6. Statement ofCash Flows 2.Reading Financial Statements Ledger Account 207Sell shipNov 1. CASH 205Get paidSep 1. CR0103Buy clothFeb. 22 CR10252Buy shipFeb. 1 CR35 1Shareholders contr.Jan. 15/02 BalanceCreditsDebitsEntry No.DescriptionDate 207Sell shipNov 1. CASH 205Get paidSep 1. CR0103Buy clothFeb. 22 CR10252Buy shipFeb. 1 CR35 1Shareholders contr.Jan. 15/02 BalanceCreditsDebitsEntry No.DescriptionDate Journal 10-20 Get paid -5-5Value ship 0 A/R 3502040totals 20Sell ship RetainedSharesShortLongCash EquityLiabilitiesAssets 10-20 Get paid -5-5Value ship 0 A/R 3502040totals 20Sell ship RetainedSharesShortLongCash EquityLiabilitiesAssets Income Statement 35total expenses other than income tax 20Spice sale $40total revenues 25 10 20 Revenues Cloth purchase $5Net income for the period (accrual income) 0Less income tax expense $5Income before income tax Ship purchase Less expenses other than income tax Ship sale 35total expenses other than income tax 20Spice sale $40total revenues 25 10 20 Revenues Cloth purchase $5Net income for the period (accrual income) 0Less income tax expense $5Income before income tax Ship purchase Less expenses other than income tax Ship sale Venice Import-Export Jan. 1, 1502–Dec. 31, 1502 Venice Import-Export Jan. 1, 1502–Dec. 31, 1502 Balance Sheet 35 25 10 0Cash 35total 35SharesLong Equity Short Fixed A LiabilitiesAssets 35 25 10 0Cash 35total 35SharesLong Equity Short Fixed A LiabilitiesAssets

7. 3.Budgeting How? Why?

8. 3.Budgeting How? lots of different ways to do budgeting lots of different opinions on the best way

9. 3.Budgeting How? If budgeting’s not a problem… If budgeting’s a problem… −symptoms  unnecessary fights  bruised relationships  organization stuck in a rut  writing the budget gets dumped on somebody

10. 3.Budgeting How? If budgeting’s not a problem… year before actual 6,523 4,173 10,696 3,111 6,926 10,037 659 (2,143) last year actual 7,132 5,131 12,263 4,131 8,934 13,065 (802) (2,945) this year estimate 8,790 4,500 13,290 4,200 7,921 12,121 1,169 (1,776) next year budget 8,300 4,300 12,600 4,000 7,500 11,500 1,100 (676) year after draft 9,000 5,000 14,000 5,000 8,000 13,000 1,000 324 surplus (deficit) debt Income category total income Expenses category total expenses

11. 3.Budgeting How? If budgeting’s a problem… −start early −start without numbers −start with questions  “Imagine us 5 years from now…” »What are we doing? »Where are we getting our money? »What are we spending our money on? −then do pie charts −then do numbers Why? How?How sure?

12. 3.Budgeting How? Why? a second window into your organization a second language to think about your organization reveals −wishful thinking −inaccurate oral history −dangers −priorities

13. Good Board Practices 1.Charitable Status 2.Financial Statements 3.Budget sometimes your job always your responsibility