Many not-for-profits are just starting to emerge from one of the most challenging environments in recent memory due to the COVID-19 pandemic. Even if your organization is in good shape, don’t get too comfortable. Financial obstacles can appear at any time and you need to be vigilant about acting on certain warning signs.
Consider the following.
Continue Reading Not-for-Profits: Don’t Ignore These Financial Warning Signs
If the events of 2020 have taught not-for-profits anything, it’s that financial reserves are essential to long-term survival. An endowment is different from operating reserves and generally is designed to provide steady income to a not-for-profit while its core investments grow untouched. But that steady income can be a financial safeguard in times of crisis.
So if your organization doesn’t have an endowment, or if you’ve neglected to build on an existing one, you might want to focus on it as soon as your not-for-profit is back in fighting shape. Just make sure you understand the regulations governing spending and have the resources to manage investments.
Continue Reading What to Know About a Not-for-Profit Endowment
Does anyone actually read footnotes? If they’re financial statement footnotes, the answer is usually “yes.” Footnotes can provide donors, governmental supporters and other stakeholders with critical information about your not-for-profit.
So it’s important to work with your CPA to make sure your footnotes are accurate and thorough.
Continue Reading How to Disclose NFP Financial Information with Footnotes
A financial audit conducted by outside experts is among the most effective tools for revealing risks in not-for-profits. They help assure donors and other stakeholders about your stability — so long as you respond to the results appropriately.
In fact, failing to act on issues identified in an audit could threaten your organization’s long-term viability.
Continue Reading After Your Not-for-Profit’s Financial Audit…
Not-for-profits increasingly are adopting a corporate world tool: financial dashboards. A dashboard is a summary of an organization’s progress toward a specific goal over time — or a snapshot of its current situation.
Dashboards are designed to help boards and other constituents visualize important metrics, or key performance indicators (KPIs). But to facilitate informed, timely decisions, it’s critical to select the right KPIs.
Continue Reading How Financial Dashboards Help Your NFP’s Financial Success
The novel coronavirus (COVID-19) crisis has put enormous financial stress on many not-for-profits — whether they’re temporarily shut down or actively fighting the pandemic. If cash flow has dried up, your organization may need to do more than trim expenses.
Here’s how to assess your financial condition and take appropriate action.
Continue Reading How is Your Not-for-Profit’s Financial Situation?
An outside financial audit may seem like an extravagance to not-for-profits working to contain costs and focus on their mission. But undergoing regular audits allows your organization to identify risks early and act quickly to prevent problems.
Independent audits also provide valuable reassurance to donors. Fortunately, you can reduce the cost of external audits with good preparation.
Continue Reading Prepare Your Not-for-Profit for a Financial Audit
A key fiduciary duty of your not-for-profit’s board of directors is to oversee and monitor the organization’s financial health. Some financial red flags and warning signs, such as the loss of a major funder, may jump out immediately.
But other red flags can be more subtle. Here are some of them.
Continue Reading Watch for These Financial Red Flags for Your NFP Board
Your not-for-profit’s ability to pursue its mission depends greatly on its financial health and integrity.
If your not-for-profit is growing and your executives are struggling to juggle financial responsibilities, it may be time to hire a chief financial officer (CFO).
Signs of financial distress in a not-for-profit can be subtle. But board members have a responsibility to recognize them and do everything in their power to avert potential disaster.
Pay particular attention to:
Continue Reading Is Your Not-for-Profit in Financial Danger?