Financial Management for Nonprofits

June 28, 2017

Financial Management for Nonprofits

Financial Management for Nonprofits (1)

For nonprofits, strategic financial management is essential for ensuring that organizations remain fiscally sustainable during  changing times. Budget cuts, misuse of funds, and other unanticipated liabilities pose a huge future risk. Having a solid plan for how to respond to unexpected turmoil makes a world of difference. Here are a few tips for steadily managing nonprofit finances.

Strategy

Develop a detailed plan to secure internal  finances. It’s imperative to know exactly where money is coming from and a plan for how it will be used. Here are a few questions to answer when developing a financial strategy (courtesy of KnowHowNonprofit.org).

  • Where are we now?

  • What are our plans for the future?

  • How will we get there?

  • Do we know what the risks are and how we will manage these?

  • How will we manage the competing demands of spending against savings needed?

In additional to those questions above,the following will help in planning a solid financial strategy for your organization. How will the organization generate revenue or will it solely rely on gifts from donors?

The Importance of Cash Reserves

Having a nest egg is key for nonprofits that wish to grow and be financially healthy for the  long-term. Many organizations regularly face uncertainty due to economic conditions and need operating reserve balances to ensure future working capital is available.

Budgeting

A budget is a financial plan that serves as a monthly guide and is crucial in managing  short and long term cash flow.  With budgeting, nonprofits can focus on long, and short term goals while managing  organizational growth.

We hope you find these tips useful in structuring your nonprofit’s financial strategy.

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FNP has helped our agency to save thousands of dollars every year on our unemployment coverage. The service is phenomenal, and we are thankful to their team as our partner. My experience working with Marshall on the advocacy around UE for nonprofits was also a highlight as someone who teaches advocacy and lobbying for nonprofits. Really, your whole team is top shelf, so thank YOU!

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Chicago Children’s Theatre, Chicago, IL

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