How to finance an association is important because, in the future, the non-profit world is destined to have greater social value.Those who manage a non-profit association or a third sector body. Feel the same need for any company, how to finance an association and, above all, how to structure the sources of funding?
How to finance an association: 4 things to know
But before tackling the main topic, or how to finance your association, you need to reflect on how the finances of an association work.
The management of an association requires, from a financial point of view, the knowledge of few but very important things.
We have summarized them in 4 simple points that can help everyone to finance their own non-profit organization.
- The association, like any other organization, cannot have a handling of cash. It will then be necessary to open a current account at a bank or at the post office in order to use it as an operating treasury of the association. It is on the current account that all receipts (including contributions) and payments related to the association management pass. It is the practice that subjects qualified to carry out cash activities are the president and treasurer knowingly chosen by the users during the first meeting or subsequently in the renewal of the associative offices. If a board of directors is appointed, it will be this body that adopts financial decisions and, at least once a year will have to inform the assembly of the associates through an economic / financial report related to the current account statement.
- The amounts collected by the association must be aimed at achieving the corporate purpose. In its management there must not be any mixture between the assets of the association and the assets of the members although, however, the responsibility falls on the president (click!) And on those who have acted without specific authorization. This does not happen, however, for recognized associations which are a distinct “legal entity” in all respects with autonomous assets.
- All receipts and payments must be easily traced and traceable; therefore the association will have to have an economic / accounting system adapted to the needs. It will then be necessary for its president and / or the board of directors to present an annual report to the assembly of associates that will have to approve it.
- The presence of operating surpluses must be reported in the statement of the following year and never distributed, but reinvested within the company activities or devolved to other associations so as to financially support the endowments of other non-profit organizations.
The financing of a non-profit organization: internal sources
To finance an association, however, it is necessary (at least initially) to put your hand in your wallet. The association, as such, needs as many members as possible so that it can have, thanks to their payments, an important capital endowment. If you need more information regarding financial issues, please visit to https://cornerofleaders.blogspot.com/2018/11/andrew-binetter-executive-success.html.