Fresh Eyes on Fiscal Fitness
Presented by Raj Thakkar & Lori Clement
December 15, 2015
Presented in collaboration with The Foundation Center New York
Mission and impact focus often leave little time and even less resources for nonprofit teams to improve and update their financial practices. In addition, nonprofit finance teams are often understaffed and lack the time or support to look outside their organization for guidance. What results is the use of outdated systems and inefficient methods that slow productivity and make it difficult to obtain accurate financial information.
In this session, attendees shared their challenges and gained input from the presenters and fellow nonprofits on how they addressed these same issues within their own organizations. Challenges addressed include coordinating between fundraising and finance teams, transitioning from a fiscal sponsor, updating and selecting financial technology, grant compliance and effective board reporting.
After learning from each other, attendees took an assessment to understand whether their finance departments were running optimally and identified next steps for improvement. This was followed by presenters sharing the top financial mistakes nonprofits make and the ways to fix or prevent them.
3 Key takeaways from the session included:
1. Implementing regular meetings between key development and finance staff to gain clarity on the donor pipeline and grant restrictions. These meetings allow the development team to shift their asks as necessary, in case the nonprofit already has ample funding for a program and it provides finance staff with information to aid spending decision-making and audit preparation.
2. Ideally, the management team or the finance committee of the board is reviewing the budget vs. actuals with projections through the end of the fiscal year, balance sheet, spending per grant report and projected cash flows on a monthly basis. This ensures the organization can end the year with a surplus rather than deficit.
3. The finance team should tag all revenues and expenses related to a specific grant in the accounting system, rather than in Excel, in order “to not leave any money on the table”. The accounting system will ensure that individual expenses are not applied to multiple grants, a no-no for many funders, and will assist with tracking whether restrictions are met.
