Nonprofits often operate on tight budgets, relying heavily on donations, grants, and fundraising efforts. In real-time, Sage Intacct consolidates and visualizes financial and operational data across programs and entities. This feature gives nonprofit leaders a clear picture of the organization’s economic health, enabling swift decision-making. Dynamic dashboards display critical key performance indicators (KPIs) such as cash flow, expense tracking, and program efficiency.

Partnership Assessment Tool for Health

You should also share any relevant information or updates with your auditor, such as changes in your funding, programs, policies, or systems. Choose an auditor that understands your organization and has a proven track record of working with nonprofits. You should also choose an auditor that is independent, objective, and has a good reputation among your peers.

Nonprofit Healthcare Partnership Resources

By budgeting based on outcomes—rather than line items—you ensure your financial plan reflects your mission. By building a team that reflects the organization’s values and mission, nonprofits can drive creativity, innovation, and collaboration. This includes recruiting and retaining staff and volunteers, developing a positive and inclusive work culture, and providing opportunities for growth and development. Goodwill Industries demonstrates a commitment to transparency and accountability in its executive compensation practices. The organization’s annual report provides detailed information on CEO compensation, including a breakdown of salary, benefits, and incentives.

• Striking the right balance is crucial for maintaining both operational efficiency and donor trust.
• If you are changing jobs or retiring, it may make sense to consider a rollover of funds from your employer-based retirement plan.
• An income statement shows an organization’s revenue, expenses, and net income.
• Non-profits that don’t plan well often struggle when they make less than $50,000 a year.
• Complete digital access to quality analysis and expert insights, complemented with our award-winning Weekend Print edition.
• FP&A software empowers leadership with the insights they need to make smart, mission-driven, informed decisions now.

Government/private grants

Additionally, it should focus on what your organization can accomplish based on past efforts. Be sure your nonprofit is financially ready for the coming year with an effective and well-thought-out plan. On top of regularly updating your donors, many organizations choose to conduct and send out an annual report every year.

Program sales (e.g., event tickets)

• It allows you to see exactly what each of your individual programs is costing, whether you have the resources available to effectively run the program and determine if the program is sustainable.
• A financial contingency plan serves as a safety net, ensuring that an organization can navigate unexpected financial challenges without compromising its mission or operational integrity.
• The first ‘what’,fund accounting, allows a nonprofit to match their sources of revenue with its designation.
• When you’re explaining to supporters what your nonprofit spends it funding on, be sure to put everything in terms of impact.

Involve program staff, finance teams, and board members early to ensure everyone’s input shapes the final plan. Good nonprofit financial management begins with clear financial goals. It’s about making sure budgets match the organization’s mission, keeping an eye on cash flow, and using tools like the National Council of Nonprofits’ Budget Toolkit.

Nonprofits can leverage cloud-based accounting software, financial planning and analysis tools, and data visualization platforms to streamline financial management processes and drive informed decision-making. The primary difference between nonprofit and for-profit organizations is the responsibility nonprofits have to the community. While for-profit companies raise money for their shareholders, nonprofits must reinvest all https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ income into the organization to be used towards programs for its beneficiaries. The IRS has additional requirements for tax-exempt organizations, so a primary role of nonprofit financial management is to follow federal and state policies and accounting best practices. While it may seem like running a nonprofit is all about changing the world, there are many important tasks behind the scenes.

Maintaining charity organizations functioning smoothly over time depends on a good strategy; it also builds the foundation of resilience and consistent impact. The Nonprofit Times article claims that more than 75% of nonprofit organizations are expected to face financial difficulties within three years. Considering the statistics, there is a call for sustainability, cutting resources while at the same time aligning efforts towards achieving the objective. Effective organization techniques are key for creating a successful nonprofit financial plan. Make sure you’ve organized your financial data so that you’re able to stick to the financial plan and budget you create. Whether you’re new to financial planning or you’re a seasoned planner, it can help immensely to have a professional guiding your way during the process.

Balancing Program Vs. Administrative Costs

• This will demonstrate your nonprofit organization’s net worth, liquidity, solvency, and overall monetary health.
• In crafting a robust budget for your organization, utilizing budget templates can streamline the process, ensuring accuracy and ease of financial management.
• Financial plans can help you control and improve your financial situation.
• Generally, your bookkeeper will be the one to collect relevant financial information for your nonprofit.
• Nonprofits must create contingency plans to handle the inevitable tough times by keeping an eye on the economic forecast.
• Once the initial budget is drafted, review it with stakeholders to identify potential gaps or misallocations.

StrongNonprofits.org provides best-practice guidance and hands-on tools to help you understand and manage your non-profit’s financial health. The site offers helpful resources in the areas of financial planning, operations, monitoring, and governance. Developing a plan for financial sustainability, as with any plan, takes a lot of work to be done right. It’s intricately linked with the idea of institutionalizing your organization and its programs as a whole. By creating an effective financial plan, members of your organization will be able to do more to make your vision a reality and have your mission accomplished.