Nonprofit financials are crucial for managing and understanding the fiscal health of a nonprofit organization. Effective management of nonprofit financials is essential for maintaining the transparency and accountability you need for donor trust.
Financial statements are important to be able to evaluate an organization’s financial health and make informed decisions. The guide is designed to help readers, including non-financial professionals, analyze, understand and interpret key financial documents to assess financial performance and stability.
The people who rely on your organization’s financial statements probably come from different walks of life and different positions. Some may have financial backgrounds, but others might not. It’s this latter group you need to keep in mind as you supply financial data. Consider providing definitions of certain financial reporting terms to present data in a reader-friendly manner. Use graphs and financial ratios to highlight relevant trends, and include industry benchmarks to show how your business compares to others in your industry.
Setting realistic fundraising goals is essential for the sustainability and impact of any nonprofit. Balancing ambition with achievable targets and the right support can ensure your organization's ability to carry out its mission.
It’s never too early to think about reporting responsibilities for the next deadline. Be careful to keep records of fundraising expenses, which you must report on Schedule G. If you have foreign operations, know that you’ll need to provide details about them. Do everything you can to prevent fraud or any illicit diversion of assets because you’ll have to report them, as well as any loans to disqualified persons.
Managing a budget for a nonprofit organization is is important for financial sustainability and provides a guide for financial health and sustainability.