The four parts of a nonprofit board finance packet
Updated 16 October 2026
A nonprofit board is responsible for overseeing the organization's money. Board members read the finance packet a few days before each meeting, and most of them work outside finance. A packet that does its job has four parts: the budget set against actual results, the cash the organization can spend, the months of reserve, and a written summary. Each part below comes with a worked example in round figures. The figures are an illustration.
Part one: the budget against actual results
The board approves a budget before the year starts. The first page of the packet sets each budget line beside what has come in or gone out so far this year. A third column shows the difference in dollars and a fourth shows it as a percentage of the budget. Finance staff add one line of explanation beside each large difference.
The board then discusses the lines that moved. A program that spent more because more people enrolled is one conversation. Donations that came in below plan are another, and the board may need to act on it.
The figures are an illustration. The budget expects $600,000 of revenue by the end of June, and $561,000 has arrived. Revenue is $39,000 under budget, or 6.5%. Program spending was budgeted at $420,000 and came to $447,000, which is $27,000 over, or 6.4%. The explanation column says that enrollment in the summer program ran above plan and that a spring appeal raised less than forecast.
Part two: the cash the organization can spend
The bank balance includes money that donors gave for a named purpose. That money carries a donor restriction, and the organization can spend it only on that purpose. The second page of the packet splits the balance into restricted cash and unrestricted cash. Unrestricted cash is the money available for salaries, rent and any other cost of running the organization.
The figures are an illustration. The organization holds $480,000 at the bank. Of that, $330,000 is restricted to two funded programs, which leaves $150,000 unrestricted. Monthly spending runs $75,000. The full balance would cover 6.4 months, and the unrestricted cash covers 2.0 months. A board that reads only the bank balance sees 4.4 more months of cover than the organization has for general costs.
Part three: months of reserve, shown over time
Months of reserve is the unrestricted cash divided by a typical month of spending. The figure for one month says where the organization stands. The same figure across the last four or six meetings says which way it is moving. The packet prints the series as a short row of numbers so the board can see the direction at a glance.
The figures are an illustration. With spending steady at $75,000 a month, unrestricted cash went from $165,000 to $158,000, then to $150,000, then to $141,000. Months of reserve went from 2.2 to 2.1, then 2.0, then 1.88. Each quarter's figure on its own looks close to the last one. The four together show the reserve falling by about a tenth of a month each quarter.
Part four: a written summary from the treasurer
The treasurer is the board officer who leads its review of the finances. The summary is a few paragraphs in plain words that the treasurer or finance staff write for each meeting. It names the main differences from budget, the change in the reserve, and any grant or contract that is about to end. It also states what the finance team expects in the coming quarter.
The figures are an illustration. The first paragraph says revenue is $39,000 under budget at mid-year because the spring appeal raised less than planned. The second says unrestricted cash covers 1.88 months, down from 2.2 three quarters earlier. The third says a $90,000 annual grant ends in June, which removes $7,500 a month of funding unless a replacement is found.
What stays out of the packet
The general ledger, the full chart of accounts and transaction listings stay out of the standard packet. Finance staff keep them ready for any board member who asks. A packet of three or four pages lets a volunteer read the whole thing before the meeting. The same pages in the same order at every meeting let members learn the layout once and spot a change quickly.
A board that meets monthly can take a shorter packet each time. A board that meets quarterly needs a little more explanation in each packet, because more has happened between meetings.
The figures are an illustration. A full set of monthly reports runs to 40 pages. Page one of the new packet is the budget against actual. Page two splits cash into $330,000 restricted and $150,000 unrestricted and shows the reserve series. Page three is the treasurer's summary. The other 37 pages move to a backup file that finance staff bring to the meeting.
The treasurer and the people who prepare the figures
Most treasurers are volunteers with other jobs. The treasurer brings judgment and presents the packet to the board. Staff or an outside firm prepare the figures, close the books each month and keep the format the same. The packet depends on books that are current, with accounts that match the programs and the budget, and with restricted money recorded by fund.
The figures are an illustration. The board meets on the third Thursday of each quarter's first month. Finance staff close the prior month by the 10th, build the packet by the 14th and send it to the treasurer. The treasurer writes the summary and sends the packet to the board 7 days before the meeting.
What this means for a nonprofit
A board packet has four parts and fits on three or four pages. The budget page shows each difference in dollars and as a percentage. The cash page separates restricted from unrestricted money. The reserve page shows months of cover across four meetings in a row. The summary names the differences, the reserve trend and any ending grant. All four parts come from books closed on the same date each month.
Who prepares the figures
Averan Advisors closes the books each month for nonprofits and prepares the figures a treasurer presents. See bookkeeping and monthly close for that work, and fractional CFO support for budgets and cash planning.
The nonprofit finance resources hub covers fund accounting, board reporting, grants and reserves.
If you want this done for you
What happens next
Reading about it and having it done are different things. Here is exactly what happens if you want the second one.
- The call takes thirty minutesYou describe the business and where the numbers are letting you down. We give you an expert view of your situation, and what we would start with. There is no pitch deck.
- We look at the fileYou give us read access to the books as they are. We come back with what is wrong, what it will take to fix, and whether the answer is bookkeeping, controller work, or something else.
- We send a written scope and a priceIt lists what we do each month, what you get, the date it lands and the fee. We agree it before anything starts, and it does not change unless you agree.
- We take over the books and close the first monthWe set up access and systems and enter the opening balances. The first close lands on the date in the scope, and every one after it does too.