The Best Financial Tips To Boost Your Nonprofit Organization
There's no question that nonprofit organizations face different financial situations and requirements than other businesses.
Use this guide to boost your revenue and establish vital economic skills by focusing on your financial practices.
Budget and Controls
- Create a transparent budget and consistently analyze your institution's monetary activity. The goal is to protect the funds needed for established obligations and your organization's future goals.
- Arrange for regular financial audits by an independent CPA firm with nonprofit experience. Communication with the auditors before and after will ensure the procedures are understood and will reveal any relevant findings to improve your practices going forward.
- Set up adequate controls to protect your finances, and confirm that multiple people are involved in checking and balancing reports, especially those that relate to cash receipts. Record keeping policies should be updated regularly and should always accurately expressed in writing.
Preparing for Expenses
- Maintain awareness of the ongoing expenses of your organization. Rather than relying on past fundraising methods alone, work proactively to increase revenue.
- Both long-term costs and short-term obligations using cash flow analysis. Remember that it's important to establish a reserve fund for unexpected expenses as well.
Tax Requirements and Financial Statements
- Use the not-for-profit tax form 990 as a guide for your chart of accounts. This ensures the information needed will be available in the proper format when it comes time to file your return.
- Distinguish between temporary, permanent, and unrestricted funds on your financial statements as these gifts are all governed by a different set of guidelines.
Remember, financial requirements and procedures vary by region and by organization, so it's important to know your location's specific regulations.
Rolland Standish has over 25 years in public accounting and is the partner-in-charge of H&J's broad non-profit client base - cultural, social, churches, trade associations, unions and many more - located in Northern Ohio, New York, and New Jersey. An active volunteer, Rolly has held leadership positions in area non-profits, including the Arthritis Foundation, LakewoodAlive, and WIRE-net.