Report Shows Nonprofit Leaders How to Make the Most of Financial Infrastructure and Fundsback
Nonprofit leaders can improve the effectiveness and reliability of fiscal management using tips and examples in a new report, Maximizing Nonprofit Resources in a Challenging Economy, which is based on a survey conducted by Fiscal Management Associates and ERE LLP at the end of 2008.
The report is chock full of ideas and tips about:
- staffing levels
- professional training
- day-to-day accounting procedures
- financial reporting
- budgeting process
- best financial practices
Why is this report important, you ask? Because it shows — through graphs and examples – how nonprofits can improve their financial health through best practices and gives concrete suggestions for putting those practices in place.
“In addition to providing statistics and an analysis of the findings, the report also focuses on ‘best practices’ and tips for providing practical ways nonprofit organizations can enhance their own fiscal operations,” said Marc Taub, Partner-in-Charge, Not-for-Profit Group, ERE LLP.
Nonprofit leaders can compare their own staff, professional training, reporting procedures and budgeting processes to those of organizations with similar income so the report becomes a tool for self-assessment.
A key theme is that financial matters are everybody’s business. “As the report showcases, active involvement from all financial stakeholders – fiscal, program, development, executive management, and the board – will produce better long-term results,” said Hilda Polanco, managing director of FMA.
In other words, program managers as well as board members need to understand and contribute to the budget process.
In addition, the report points out potential problem areas, such as day-to-day cash flow, and has practical suggestions for preventing these problems.
The report is a good tool because it:
- is clear and easy to read
- shows you what organizations similar to yours are doing
- has practical tips
- gives idea-evoking examples of best practices
- explains the basics of effective, reliable financial reporting
As the survey shows, size matters. Few organization with less than $1 million in revenue can afford trained financial staff. But records must be kept, no matter your size. The answer? Outsource your financial services. You don’t have to pay the salaries of full-time staff but you can get high-quality, reliable reports.
Another point that caught my eye: Some nonprofits are penny-wise and pound-foolish when it comes to the accounting programs they use. General-purpose commercial software may cost less up front but it often costs more in the long run.
By buying somewhat more expensive fund-based software, nonprofits save money in the end (and may produce reports that are more satisfying to funders). The extra upfront cost is offset by savings in staff time, improved accuracy, and more timely reports.
And more timely means more useful.
While number-crunching may not appeal to everyone, reliable and effective fiscal management must engage the attention of every nonprofit leader. This report is an easy way to assess your organization’s fiscal health and think about ways to improve it.
Check out the report and let me know what caught your eye. Did you find something your organization could do better? Do you have your own tips?