One of the pedestrian requirements of life is running a small non-profit association. We have them because they are necessary. Churches, condominiums, and homeowner associations all have non-profit corporate charters. When they are small and have almost no budget, such corporations offer no public recognition, and few will even know they exist. They are not fun. They are dangerous.
In the last few weeks I have had several members of small HOA’s tell me facts which indicate that their officers have paid or been paid money without proper authorization, or money has been received and spent without record, or insurance proceeds have been received that no one can account for. Every one of these reports called to question some member’s integrity and honesty. Any person whose integrity is challenged will be offended and defensive. Generally, where these allegations are made, an association is on the threshold of long, expensive battles from which few who participate will emerge as friends, or even civil.
The reason for this article is to say to those who have a role in leadership that a small corporation should never be run casually or informally. Every association should keep records of its income and expenses and minutes of its meetings. Board meetings should be advertised and open. Every entity should have an outside accountant who is on a first-name basis with its treasurer or president, or both.
There are leaders in such associations who, by design or personality, misspend money or abuse their position. Most people have little sympathy for the disputes that arise when that is so. However, nothing is more painful than for a volunteer servant to be accused when the real truth is that they tried to save accounting expenses, or that they simply got too casual with corporate records.
If your non-profit association is worth your time, it is worth the expense of an outside accountant if he or she does nothing but confirm money received and disbursed. If it is worth your time, it is also worth an Officers’ and Directors’ Insurance policy.
Neighbors, church members, or business “partners” can work together in associations efficiently and in some most satisfying ways. They can also have the most frustrating and destructive relationships that any human has ever endured if they fail to exercise the basic courtesy of following minimum business standards.
Don’t let the small size of your church, condominium, or business, conceal the importance of good business practices.
In this new year, please don’t forget that a careful, meticulous closing agent is worth her (or his) weight in Christmas candy. HAPPY NEW YEAR.