Internal Controls: Fulfilling a Burden of Trust

Good financial stewardship entails more than a series of management functions, gift acknowledgment, donor recognition, prudent investment, careful accounting, and many other activities related to the fundraising process. It is all these things, of course, but also much more. Stewardship implies an even deeper burden of trust, responsibility, and accountability. It speaks to the heart of what philanthropy is; hence, it is a profound expression of the shared responsibility that individuals and organization have to contribute to the common good. Trust and responsibility are essential components of good stewardship. They are also indispensable to the concept of ethical fundraising.

To be good stewards, internal controls are especially important in small museums with limited staff. No one individual should be responsible for all duties, whether dealing with revenues or expenses. It is understood that many small museums do not have multiple staff members, board members, or volunteers to separate the duties, but segregating them is still both important and possible, and museums should make every effort to do so.

To help prevent fraud and control errors, here are some ways to segregate duties for cash receipts, cash disbursements, and petty cash developed by the Delaware Association of Nonprofit Agencies. Adapt them for your small museum.

Cash Receipts

• The mail should be opened by someone other than the bookkeeper.
• Have the person opening the mail immediately stamp all checks “For Deposit Only.”
• One person should run a calculator tape on checks received and keep or give them to someone other than the bookkeeper. The mail opener or bookkeeper should prepare the deposit slip.
• Someone other than the person who prepared the deposit slip should take the deposit to the bank.
• Copies of the checks should be forwarded to the bookkeeper.
• The bookkeeper should enter information into the accounting system using copies of checks.
• After the deposit is made, the validated deposit slip should be compared to the tape that was run on the checks. The person comparing these should initial the deposit slip to verify that this procedure was performed. At month’s end, when the bank statement is received, this same individual should compare the deposit slips to the deposits on the bank statement.
• Acknowledgments to donors should not be prepared by the person(s) who opens the mail or by the bookkeeper.

Cash Disbursements

• Incoming vendor invoices should be forwarded to an individual who checks the invoices for addition and expense errors and then forwards them to the executive director or other responsible person for approval.
• The person approving invoices should review them in detail to confirm the charges are legitimate and initial the invoice to approve it for payment. This can be noted on the face of the invoice or on a voucher attached to the invoice.
• The approved invoice should be submitted to the bookkeeper for preparation of the check.
• The bookkeeper should cancel the invoice indicating date paid and check number. The bookkeeper should then return the check and the supporting documentation to the person(s) responsible for signing checks.
• The check signer(s) should review the check, compare it to the invoice(s), review the account distribution, and sign it.
• A stamp or voucher should be used to document approval of the invoice, account distribution, the date it was paid, and the check number.
• Consider requiring two signatures on larger checks.
• Someone other than the person who prepares the checks should mail them to vendors.
• Expense reports of the executive director should be approved by a board or committee member.
• Vendors’ original invoices should be matched to statements. Payment should be made based on original invoices rather than the statement.

Brenda Granger has worked for small museums and has been the executive director of the Oklahoma Museums Association since 2005. The OMA supports the efforts of Oklahoma museums with their efforts to educate, inform, and entertain. Oklahoma is home to more than five hundred museums, with 75 percent of them being self-defined as small.

Nontraditional Museum Volunteers

It would be wonderful to have a corps of museum volunteers willing to assist with every possible task at any possible moment. But people have numerous demands on their time. Many families include two adults who work full-time. How can a museum compete? There is no easy answer and certainly no single solution, but there are ways to develop a successful volunteer program. One avenue is to look toward a less traditional volunteer model.

Youth Volunteers

Science and natural history museums, zoos, aquariums, and children’s museums actively engage young people in volunteering. It is less common for youth volunteers to participate in small general museums, historic sites, or house museums, but there are overlooked opportunities for young people to offer volunteer services in these venues. Any youth volunteer program needs solid planning and quite a bit of structure to ensure that the volunteers have a rewarding experience and contribute to the museum’s operation. Youth volunteers are usually accepted at a museum at around age thirteen and can continue through high school. While some young people are motivated by school service requirements, more volunteer to follow some interest. They act as tour guides, greeters, assistants in educational programs, and “explainers,” as well as serving in many other capacities. Youth volunteers generally need to have a parent sign a release form and may need references from a teacher, coach, or counselor. They typically have to commit to orientation and training and to volunteering a certain number of hours to the museum. Although not required to do so by law, a museum would be prudent to correlate its guidelines for youth volunteers with child labor laws.

Family Volunteers

Museums can offer opportunities for families to spend some quality time together. Special events, such as historic celebrations, are appealing to families. Outdoor events, such as a cleanup day, might be inviting. A family could participate in an educational program. The volunteer opportunities need to be tailored to fit the needs of the particular family, which can involve considerable staff time to plan but can also be rewarding for both the families and the museum.

Corporate Volunteers

Communities with large industrial plants or corporations often encourage their employees to contribute volunteer hours to civic organizations. The companies may have human relations departments that help place employees in appropriate volunteer slots. Some corporations will also match volunteer hours with a cash contribution.

Distance Volunteers

With the growth of Internet use, there are opportunities for volunteers to support museums in new ways and in their own time. This opens new opportunities for volunteers who are employed. They can do research from home. They might be able to enter data about collections. They could develop educational materials that correlate with state-mandated educational goals.

Community Service Volunteers

Some museums have found that with the right supervision, individuals who have been sentenced to public service after breaking the law may be able to lend support to museums. Each museum needs to weigh the potential for their assistance with possible security risks.

Information Technology Support

As technological changes sweep our society, some museums are on the wrong side of the digital divide. With limited budgets and often outdated equipment, such museums can benefit greatly from savvy volunteers who know how to use technology to the museum’s advantage and where to look for assistance in upgrading the museum’s skills and equipment. People with technological skills can also help the museum with a website and with social networking through venues such as Facebook, Twitter, and Flickr. As with all volunteers, it is important to have clearly established objectives and responsibilities in writing for both the information technology volunteer and the museum.

Patricia L. Miller is the executive director of the Illinois Heritage Association, a nonprofit service organization based in Champaign, Illinois. She works with museums, libraries, and other cultural heritage organizations throughout the state. A peer reviewer for the American Association of Museums for its Accreditation and Museum Assessment programs, Miller is an adjunct lecturer in the history department at Eastern Illinois University, Charleston, where she has taught graduate classes in historic site administration since 1985.

Key to Grant Success: The Relationship

Chances are that as a small museum, you are not trying to compete with funding raised by the local university. However, understanding how these massive grants are acquired holds the potential for success for small museums. The key to the university model is perfecting the relationship with the foundation.

The reason is that donors know how to give to a college not only because of name recognition but because they know someone, and, more importantly, trust someone, at this institution. People give to people, not to organizations. Understanding this helps us realize small museums hold a real advantage in going after donors and foundations due to our smallness since we are normally run by a core group of staff and board members. Getting your museum personnel out of the museum and into contact with these possible donors, large or small, is the next step.

In identifying support for possible grants, begin with sources with whom your museum personnel are acquainted. Even the smallest organization most likely has a network it may not even consider as a helpful start in forming a network. Board members, staff, and volunteers all have friends with similar interests. Almost all these interests or hobbies involve fundraising on some level, be it an American Legion Auxiliary bake sale or chili fundraiser to send the local high school to march in the Rose Bowl parade. In this opening phase of identifying help, do not fear casting your net too wide. Any contact you can harvest in terms of grant writing or fundraising is a source of possible help. As we all know, many individuals involved in volunteer organizations are involved in multiple entities aimed at improving their communities. With this in mind, add any organization or personal contacts to this initial listing of possible supporters in not only targeting grants but also providing advice during the grant process.

The second phase is simply to research possible grant sources. Who in the past, even the very distant past, has given to your organization? To whom have these past supporters given funds recently? Contact small museums similar to your organization in scope, size, and mission for possible success stories. Even these small organizations well outside your immediate area possess information for successfully developing relationships with donors. Look for donors who are funding organizations similar to your small museum. Investigate the possibility of this organization’s funding a grant in your area. Also look for similar foundations or donors in your area that have not previously given to small museums. If they have not, the chances are they are not currently in a relationship with a small museum. Enter you and your organization.

Once this list of individuals, foundations, and agencies is compiled, you need to establish connections and then work at staying connected. As with all relationships, developing relationships with these organizations, individuals, and groups will take time. To begin, their names need to be added to all your forms of outreach, from mailing lists to all the electronic forms you utilize for updating your membership and friends. Over a period of months, this process will demonstrate the impact of your small museum on your community through your sponsored events and other outreach activities. A special event can also be held for these members in demonstrating your past activities, future goals, and ways they can join your team in reaching these goals. All these steps, or some modifications of them, represent aspects of the “total relationship management” that places universities on the top of the heap in gathering large grants. Structuring their tactics to fit your small museum will yield dividends in reaching your long-term goals.

Benjamin Hruska is a PhD candidate in public history at Arizona State University. Before returning to graduate school, Hruska served as director of the Block Island Historical Society on Block Island, Rhode Island, and successfully obtained a building grant from the Rhode Island Historical Preservation & Heritage Commission. In the summer of 2009, he worked as a court historian for the Department of Defense’s U.S. Court of Appeals for the Armed Forces in Washington, DC.