Finding nonprofit financial strategies to increase your organization’s funding can often be challenging. It’s not always easy keeping up with tight timelines, budgets, and the ever changing climate of constituents and community.
Nonprofit financial strategies that get results
What steps can you take to become more accountable to your funding sources and be more profitable? Here are 7 nonprofit financial strategies to increase nonprofit funding while being accountable and transparent to your board members, funders and donors.
#1. Be Prepared with Better Financial Reports.
Transparency has never been more important for nonprofit organizations. You must be prepared to show that your funds were used for their designated purpose. Demonstrating proper stewardship of your funds is the key to being accountable to supporters and board members. In order to gain the trust of your funding sources, nonprofit financial reports must clearly show how money is spent and raised.
#2. Forget About Spreadsheets.
Don’t waste valuable exporting data from your accounting system into spreadsheets to generate your financial reports. Spreadsheets lack the functionality to systemize accounting and streamline budgets and planning. Using spreadsheets for financial reporting runs the risk of internal control deficiencies and exceptions in your auditor’s management letter. Spreadsheets are complicated and hard-coded. Last minute changes are difficult to implement and can create reconciliation problems with your accounting system. You will save time and money using a nonprofit accounting system that can generate proper budgets and reports on the fly.
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#3. Get Everyone Involved.
Opening up the communication between your accounting and fundraising people will help streamline transparency. Using nonprofit software that integrates accounting and fundraising will make it easier to communicate between accounting and fundraising departments so everyone is on the same page. Get your program staff involved by providing them with financial reports measuring their program’s effectiveness and projections on meeting their future goals with available financial resources.
#4. Stay Focussed With Performance Analytics.
Quantitative data metrics are becoming common place for nonprofits to stay focused on your goals through financial reporting. It’s becoming increasingly important for CFOs and controllers as well as program managers to show how financials are supporting your nonprofit’s mission. To be effective, financial reports must show how performance and mission results support each other throughout the organization.
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#5. Strategize About Growth.
Pay attention to growth opportunities to increase revenue. Put growth ideas into practice. Consider investing in technology, fundraising and expansion. Think about diversifying revenue streams from other sources, new fund raising events and strategic partnerships with local businesses.
#6. Use of Forecasting and Budgets to Set Goals.
Be prepared to think ahead and plan for the future. Preparing budgets and forecasts will help you achieve financial goals and determine financial impact. Best way to do this is by comparing your actual expenses versus your monthly budget. Stay on top of your forecasts and budgets on a regular basis to take into account organization changes. Make sure you have the ability to track your budget activity by the lowest common denominator; i.e, the line item expense within the grant, within the program, within your fund.
#7. Stay On Top of Report Changes.
FASB 117 reporting is due for an update in 2017. Make sure you understand how these changes are going to impact your organization. Be prepared for net asset classification requirements and other changes that can effect nonprofit financial statements. Stay on top of FASB changes that can affect your organization and be prepared. Does your software have the capability to generate reports that incorporate these changes.
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Going forward, incorporate these 7 winning strategies in your financial planning and you will see more success in increasing nonprofit funding.
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