Do Finance Right
Beyond your mission statement and the events you hold in your community, finance is the hidden part of every nonprofit. It’s the component that not many people see, but it’s the vital, required layer to keep your organization moving forward.
No one likes tedious administrative tasks. Yet, they need to be done and there are bills that need to be paid. But to make the road ahead easier, it’s best to take the time to review your current structure now and list out improvements that can be made.
Keep these three financial tips in mind to make sure you and your nonprofit are in the best position. Future you will appreciate it.
1. Cashflow Forecasting
If you envision potential for growth, building a cashflow forecast is a good way to see where you could stand in the months ahead. This comes with advantages like making easier debt payments and visualizing a predictable growth strategy. To execute, model the organization’s cash inflows and outflows for the upcoming year. Use your current income statements and balance sheets, and combine with future expenses and revenue like wages, rent, incoming donor receipts, and investments to evaluate whether your fundraising can support all the tactical and strategic things you want to achieve.
If there are months of operating resources below thresholds, start working on alternate sources of capital like creating new donor initiatives or an operating line of credit.
2. Governance Review
Have your board of directors review your governance structure entering the year. Evaluate who is leading each committee and the board as a whole. Do the leaders in these positions on the board maximize the impact to the organization with their skillset, or does the board need to add a new or upgraded skillset to accomplish its objectives and fulfill its fiduciary responsibility?
This is where the vision for growth truly begins. The board is a highly visible aspect of your organization, and their leadership will say a lot about where you want your nonprofit to go.
3. Technology Check
Take a look at your technology. Is your website easily navigable and optimized for mobile? Is your payment process secure? When your donors go online to make a donation, they trust that they can find the information they need, and their information is protected. Ensuring all your systems and processes are secure allows you to build further trust from your donors.
If you have limited resources, you could consult an independent third party to assist with your evaluation. In house, look for solutions and technology with strong control certifications such as SOC 2 Type 2, regular penetration testing, and reputable and secure payment processing.