What does a treasurer do for a nonprofit organization?

If you're considering starting a nonprofit club or are already leading one that's growing, it's crucial to understand the significance of effective financial management. Even for small clubs, managing finances can be overwhelming without the right person in charge. That's where a treasurer becomes essential. A treasurer is a critical member of any nonprofit organization who is responsible for managing and overseeing its finances. The treasurer's role includes keeping track of income and expenses, preparing budgets, and organizing financial reports. By performing these duties, the treasurer plays a crucial role in ensuring a nonprofit’s financial stability. In this article, we will discuss the role of a treasurer in a nonprofit organization in detail, including their responsibilities and how to elect the best person for the job.
What does a treasurer do for a nonprofit organization

What is a treasurer?

A treasurer is responsible for managing and overseeing the financial resources of an organization, such as a company, non-profit organization, government agency, or political campaign. Their primary duties typically include managing an organization’s finances, preparing financial reports, and ensuring compliance with financial regulations.

In a nonprofit membership organization, the treasurer is a crucial member appointed to the board of directors or executive board. They play a significant role in maintaining accurate financial records of all transactions and managing the organization’s cash flow, which includes collecting member fees, dues, and donations while overseeing the budget.

The treasurer is also responsible for ensuring compliance with tax regulations to maintain the nonprofit’s tax-exempt status. They may collaborate with banks and other financial institutions and manage relationships with vendors and other stakeholders.

Depending on the organization’s size, the treasurer can handle these tasks independently or oversee an entire finance department in larger organizations. As a key member of the leadership team, the treasurer must possess strong financial management skills, be detail-oriented, and have a solid understanding of financial management and accounting principles.


What are a treasurer’s responsibilities?

While most people understand that a treasurer manages finances, the day-to-day operations of a treasurer involve a variety of different areas, including both one-time and recurring tasks. A treasurer’s activities will likely include most of the following:

Leadership and strategy

As a member of the board of directors, the treasurer is involved in planning and strategy at the highest level of the organization. When discussing plans for the club, the board will rely on the treasurer for insight into the financial feasibility of any proposed ideas. When a new treasurer is elected, they’ll also be responsible for meeting with the incoming treasurer and ensuring a smooth officer handover.


Tax compliance

The treasurer is also responsible for ensuring compliance with tax regulations and plays a crucial role in ensuring that the nonprofit organization maintains tax-exempt status. This includes monitoring the organization’s revenue and expenses and ensuring that all tax-related documents are filed on time and in compliance with applicable laws and regulations.


Budget and bookkeeping

One of the primary responsibilities of the treasurer is to create a budget based on projected income and expenses, which will be presented to the board for approval. It’s important for the treasurer to keep a close eye on actual expenditures and revenues in order to alert the board if there are any significant deviations from the budget so that action can be taken.

In addition to budgeting, the treasurer will be responsible for bookkeeping tasks such as managing transactions and receipts for accounts payable (outgoing payments) and accounts receivable (incoming payments). This includes paying bills and collecting dues from members. Accurate record-keeping is essential for the smooth operation of the organization.

Why treasury management matters for nonprofit organizations

While it’s important to ask, “what does a treasurer of a club do,” it’s just as important to ask, “why?” It’s not enough to simply know what a treasurer does, it’s equally important to know why their role is so critical.

Without effective treasury management, your organization’s finances can quickly become mismanaged, potentially resulting in serious consequences such as fines or penalties for noncompliance with tax regulations. This mismanagement can threaten the good standing of your organization.

Below are some reasons why treasury management is key to maintaining the growth and success of your nonprofit organization:


Keeping your tax-exempt status

As a nonprofit club or group, your organization likely enjoys tax-exempt status if it has undergone the incorporation process and is officially registered as a 501(c ) charitable organization. This means you can collect dues and donations to fund activities without having a large chunk reappropriated for federal taxes. Your 501(c)  designation also opens the door to various potential grants.

Keeping your 501(c) status is vital to ensure the continued operation of your club. The IRS can revoke your designation for a variety of reasons. The treasurer plays a critical role in this area by meeting your organization’s annual reporting obligation.

Your organization must prepare the appropriate forms for your 501(c ) designation and file it with the IRS annually. The treasurer should ensure that all transactions are within the scope of club activities to avoid losing your organization’s status due to unrelated business income or private benefits. You can take a look at our handy compliance checklist to ensure you maintain your tax exempt status.


Making the most of your resources

Your treasurer is responsible for managing expenses for your organization, but they can provide benefits beyond just compliance. A knowledgeable treasurer can help your club’s finances by implementing strategies that reduce overall costs.

This can broaden the range of potential activities for your club, allowing you to expand your membership and enhance opportunities. By using the right tools to streamline management, your treasurer could stretch your budget further than you might expect.


Taking responsibility

Depending on the nature of your club, you may have various bills to pay. Consider the role of a treasurer for a large organization vs. what a treasurer does in a smaller nonprofit school club. As your organization grows, you’ll have more bills to pay – and it’s important that they be paid on time.

An effective treasurer consolidates the responsibility for issuing these payments, so there’s no ambiguity. Instead of having bills go unpaid because accountability isn’t clear, a treasurer is an individual that you can rely on to keep your club running and avoid any late payment penalties.


3 effective strategies for treasury management

Serving as the treasurer for a nonprofit organization can be a real challenge at times. However, treasurers can implement a few simple strategies to make their role easier to manage. While every organization will require a unique approach, these general principles can help.


Maintain separation of duties and control access to funds

It’s important to separate duties and find the right system to control who has access to your organization’s funds. You may not want everyone on your executive board to have direct access to bank accounts and other resources, as controlling and tracking expenditures can become complicated.

However, you also need to make it possible for the board and even some members to access organizational finances in some cases. You should have protocols ready for these scenarios. Ideally, you can use a financial management platform that makes managing access easy even when dealing with many members.


Automate whenever possible

Being a treasurer would be an insurmountable challenge if you had to do everything by hand. Fortunately, there are many tools available to make things easier. A treasurer can use spreadsheets to track revenue and expenses and implement automatic changes.

However, finding the right financial management platform (like Crowded) can help automate things like bill payments, dues collection, bookkeeping, and report generation. By doing so, treasurers can save time and reduce the risk of human error in their records.


Choose cost-effective tools

Nonprofit organizations incur a variety of costs, including banking and accounting fees. However, these expenses can draw funds away from core activities. To prevent this, consider finding solutions that offer benefits such as no sign-up costs, no everyday account fees, and no minimum balances.

One possible solution is to find a banking option that offers specialized accounts for nonprofit organizations. These accounts may have lower fees or even be free altogether. Additionally, some banks offer online banking services that can help nonprofits manage their finances more efficiently and reduce costs.


Qualities and skills your treasurer needs

There are a variety of key criteria to look for in order to find someone that meets a treasurer’s job description. The specific skills that your treasurer will need vary depending on the scope and size of your organization, but these qualities are generally considered vital for any treasurer.



Being responsible for finances can significantly impact club activities and tax compliance. A treasurer must be organized and maintain all records carefully. They also need to know the right tools to help them stay organized.



Although the treasurer is responsible for managing an organization’s finances, they cannot make unilateral decisions. Instead, the treasurer must bring financial matters, such as expenses, to the entire board’s attention and accurately communicate the club’s financial standing at any given time.


Accounting Skills

The treasurer will likely be a volunteer for most small to medium-sized nonprofit clubs. While they do not need to be a certified accountant, the treasurer will need some basic accounting skills. Even with tools that streamline managing nonprofit resources, it’s important to have a treasurer who can understand the nuances of managing finances.


Attention to Detail

The treasurer is a position in which attention to detail really matters and can have serious implications. Your treasurer should be familiar with your organization’s bylaws so that they can manage finances in accordance with them. The same goes for understanding your organization’s tax reporting requirements.


The solution for your nonprofit treasury management

With the right tools, a treasurer can ensure they fulfill their responsibilities effectively and accurately. Crowded provides an intuitive platform that makes it easy for treasurers to manage their organization’s finances.

With Crowded, your nonprofit will get access to a branchless banking* solution that lets you manage payments and income through a straightforward app and web portal. This way, your organization keeps all of its finances in one place, keeping records in order and providing seamless changeover for new treasurers.

With Crowded, you can painlessly manage member dues collection and allow your members to pay with credit, debit, or ACH transfer. You can also facilitate easier, more responsible spending with digital Visa® debit cards for club members. All transactions are accurately tracked for easy tax reporting when the time comes.

If you’re the treasurer of a nonprofit organization, you can serve your role better and face challenges easily by signing up for a free account today