Toolkit: Financial Stewardship Check-up
Is your organization making the most of the money it has?
Toronto Foundation spoke with more than 100 CEOs, executive directors, CFOs, board members, and sector leaders to better understand how charitable and nonprofit organizations are approaching financial assets, investment decisions and long-term planning. What emerged instead was a conversation about stewardship. Participants consistently raised broader questions about governance, risk, liquidity, long-term sustainability and how financial resources can best support mission.
The research revealed a need for stronger financial stewardship practices and a greater readiness for decision-making. This toolkit is one response to that need. It offers questions, prompts, and resources to support more intentional stewardship conversations and help organizations align their financial resources with their mission.
Financial stewardship is about more than managing a budget or choosing investments. It means making thoughtful choices about all of your organization’s financial resources — what you need now, what you may need later, what risks you can take, and how your money can best support your mission.
This check-up is designed to help boards, leadership teams, and finance committees begin that work.
How to use this tool
This tool is designed to help identify where a conversation is needed, not to provide a single “right” answer.
A CEO or senior leader might use this check-up to start a board conversation, as part of an annual financial or strategic planning process, or when reviewing reserve and investment policies. You could work through one section at a time, or use the full check-up to identify one or two areas that deserve a deeper discussion.
The questions alone won’t lead you to arrive at a particular financial strategy. The aim is to make sure your choices are intentional rather than automatic — and that your board and leadership team understand why you are making them.
1
Purpose
Do we know what our money is for?
Before deciding where money should sit or how it should be invested, it helps to know the job you need it to do. Different dollars may have very different purposes — from paying next month’s bills to protecting against future uncertainty or supporting opportunities years from now.
Ask yourselves:
- Can we clearly describe the financial resources we hold and what each is for?
- What do we need for current operations, and what are we holding for the future?
- Do we have money without a clearly defined purpose?
- Have we explicitly discussed how much we should use today versus preserve or grow for tomorrow?
2
Time
Do we know when we’ll need it?
Money needed next month should be treated differently from money that may not be needed for five or ten years. Understanding your time horizon helps determine how much liquidity you actually need — and what you can reasonably do with the rest.
Ask yourselves:
- How much cash do we need to operate confidently and how did we arrive at that number?
- What does our multi-year financial plan tell us about what we may need over the next three to five years? (If you don’t have a multi-year financial plan, this is a great resource to get started).
- Which resources will we likely need within one year, three years, five years or longer?
- Are we holding short-term assets for a clear reason — or simply because they feel safe?
3
Risk & Return
Are we thinking about both sides of the equation?
Financial risk isn't only the possibility that investments may fall in value. Inflation, lost purchasing power and missed opportunities also carry risks. Good stewardship means understanding the trade-offs — and deciding which risks make sense for your organization.
Ask yourselves:
- What do we mean when we talk about “financial risk”?
- Are we considering inflation and the loss of purchasing power alongside market volatility?
- What return, if any, do we need different pools of money to generate — and why?
- What risks are we intentionally accepting — and which are we accepting simply by default?
4
Governance
Are we set up to make good decisions?
Good financial stewardship doesn't require every board member to be an investment expert. It does require clear roles, good information and enough knowledge to ask the right questions.
Ask yourselves:
- Is it clear which financial decisions belong to management, a committee or the full board?
- Does our board understand our reserves, liquidity needs and investment approach well enough to oversee them?
- Are our reserve and investment policies still appropriate for our organization today?
- When did we last meaningfully reconsider those policies — rather than simply reapprove them?
5
Practice
Are we actively managing our financial resources?
Financial decisions can become habits. Cash accumulates. Policies roll forward. Investments remain unchanged. Active stewardship means periodically looking at the whole picture and asking whether yesterday’s decisions still make sense today.
Ask yourselves:
- How often do we look at our cash, reserves and investments together rather than as separate things?
- Do our actual holdings still match what we say the money is for and when we expect to need it?
- Do we have the information, expertise and staff capacity we need to make informed decisions?
- What financial decision or conversation have we been postponing?
6
Mission
Is our money working as hard as our people are?
Ultimately, financial stewardship is not just about protecting money. It is about using an organization’s financial resources thoughtfully in service of its purpose — today and over the long term.
Ask yourselves:
- How does our approach to money strengthen our ability to deliver our mission over time?
- Are we striking the right balance between organizational resilience and current community need?
- Are there ways we could use our financial resources differently to advance our mission?
- If we were designing our financial strategy from scratch today, would we make the same choices?
Your Next Stewardship Conversation
You don't need to change everything at once. Depending on what surfaced through this check-up, consider taking on one of the following to get started:
- Reviewing your reserve, liquidity, or investment policies. You can see our investment policy statement guide here.
- Adding stewardship discussions to a board or finance committee agenda
- Completing a multi-year financial plan
- Seeking benchmarking data or peer learning opportunities
- Building board understanding of financial stewardship concepts
- Gathering additional information before making a decision
Want to learn more?
Connect with Aneil Gokhale – Lead, Philanthropic Advisory Services
416.921.2035 ext. 212