Fiduciary Obligations of CFOs and Finance Committees

This guide outlines the fiduciary obligations of Chief Financial Officers (CFOs) and finance committees within nonprofit organizations. It details the core fiduciary duties, including the duty of care, loyalty, and obedience, emphasizing the importance of diligent oversight and adherence to organizational missions. The document explains the origins of these duties, referencing relevant federal and state laws that govern the responsibilities of nonprofit officers and directors. It also presents best practices for financial oversight and internal controls, including the establishment of policies and procedures to protect organizational assets and ensure compliance with legal standards. The guide further discusses the significance of executive compensation considerations, addressing constraints related to private inurement and the criteria for determining reasonable compensation. Overall, it provides a comprehensive framework for CFOs and finance committees to fulfill their fiduciary responsibilities effectively.