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?
An operating reserve is an unrestricted and relatively liquid portion of a not-for-profit’s net assets. Securing this reserve for use in emergencies or simply when your budget falls short is critical to your organization’s security and long-term survival.
Long-Term Effort
Building an adequate operating reserve takes time and should be regarded as a continuous project. Your board of directors needs to determine your not-for-profit’s policy on building an operating reserve, the desired fund amount and the circumstances under which it can be drawn down.
Reserve funds can come from unrestricted contributions, investment income and planned surpluses. Many boards designate a portion of their organizations’ unrestricted net assets as an operating reserve.
Continue Reading How Your Not-For-Profit’s Operating Reserve is Your Financial Safety Net
With the dawn of 2019 on the near horizon, here’s a quick list of tax and financial to-dos you should address before 2018 ends.
Check your FSA balance. If you have a Flexible Spending Account (FSA) for health care expenses, you need to incur qualifying expenses by December 31 to use up these funds or