Standard 6: Financial and Asset Management
The land trust manages its finances and assets in a responsible and accountable way.
Background
Sound financial and asset management is critical for a land trust. Federal and provincial laws have financial reporting requirements, and financial records should be available to donors upon request. Poor financial management may jeopardize the future of the land trust and its land conservation programs. It could even lead to legal challenges against the land trust. Even a small land trust with modest revenue and expenditures should have annual budget and periodic financial reports, although the format of these may be simple. Organizations with larger budgets must follow specific reporting formats. Assuring sound financial management is one of the core responsibilities of the full board, no matter who keeps the books or prepares financial reports.
Relevant Law
- Society Act, RSBC 1996, c. 433, s. 39, 41.
- Canada Not-for-profit Corporations Act, SC 2009, c. 23, s. 179-194.
- Society Act, RSBC 1996, c. 433.
- Canada Corporations Act, RSC 1970, c. C-32.
- Society Act, RSBC 1996, c. 433, s. 30.
PRACTICE
F. Investment and Management of Financial Assets & Dedicated Funds
The land trust has a system for the responsible and prudent investment and management of its financial assets, and has established policies on allowable uses of dedicated funds and investment of funds.
Background
A system for management and investment of the land trust’s financial assets is important for several reasons: the board is responsible for the prudent management of the land trust’s assets; a sound investment program builds the land trust’s resources and its ability to carry out its programs; and it helps ensure the land trust’s long-term existence. Land trusts should develop a conservative investment policy that safeguards the assets of the organization. A land trust that has dedicated funds (including operating reserves, endowments, stewardship funds, and/or long-term acquisition funds) should also have policies on how these funds may be used. Policies typically determine the use of the interest generated by the fund and describe if and when the principal can be used. The directors of the land trust should approve all significant investment decisions in writing.
Assessment Questions
CLTA Assessment Questions
- Does the land trust have any endowments or dedicated funds?
- If yes, how much in each category?
| Operating | $ _______________ | Stewardship | $ _______________ |
| Legal Defence | $ _______________ | Land Acquisition | $ _______________ |
| Other | $ ______________ |
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- If yes, does the land trust have a written policy on the allowable uses and investment of its dedicated funds?
