Nonprofit executive directors often need help with the financial management tasks they undertake. However, effective financial management is critical to an organization’s success and growth.
Monetary donations from a broad donor base are nonprofits’ lifeblood. Ensure these gifts are accounted for by having a clear expense reimbursement policy.
Develop a Budget
Nonprofits have a unique way of doing business that differs from a for-profit organization. One difference is that they typically have inconsistent income, so it is essential to plan accordingly. When preparing a budget, it is best to start the process early. Work backward from when you are expected to present the budget to your board, as this will help you determine the timeframe needed for information gathering and planning. It is also helpful to have a straightforward internal process for everyone involved, ensuring that all parties know their responsibilities and when they need to submit their materials.
When calculating your expenses, include all potential income sources, including in-kind donations and volunteer hours. This information will help you develop a realistic budget that reflects the reality of your organization’s funding. When estimating costs, contacting vendors and potential providers is also helpful in getting estimates for supplies and equipment. This will help you avoid overestimating your expenses, which can result in your nonprofit having to spend money that you don’t have.
Keep Track of Your Expenses
An accurate picture of your financials from a non-profit accountant allows you to make better spending decisions. It helps to know exactly how much you are paying – from the largest to the most minor purchases – to determine if it is wise or not to cut expenses.
This may seem overwhelming, especially if you are new to the world of budgets and accounting, but many resources are available to help. You can use a spreadsheet, an online account, or an app to keep track of your expenses. There is no right or wrong way to do this; whatever method works best for you will work.
Start by figuring out your income by scouring pay stubs and bank statements to grasp how much you earn each month. Then, determine your expenses by breaking them into categories, including recurring essentials like rent and utilities and discretionary items like travel, restaurants, and streaming subscriptions. Including various types in case of unforeseen costs is also helpful.
Have Regular Meetings with Your Board
Many boards of directors can get bogged down with information overload during board meetings. This often happens when the meeting agenda is filled with routine updates and staff reports that only require a little discussion. Keeping the plan focused on decisions and strategic discussions helps keep the group engaged, motivated, and productive.
Start on Time
A good practice is to have board members sign in early, set a meeting length of no more than two hours, and end the meeting on time. This shows you value your board members’ time.
Another helpful strategy is distributing the meeting agenda a few days in advance. This allows board members to review supporting documents and familiarize themselves with topics discussed at the meeting. Additionally, consider a consent agenda that helps the group to approve routine items such as minutes, contracts, and vetted policies without wasting precious meeting time. This also makes it easier for new board members to join the meeting, knowing they can get up to speed quickly. You can also use a small group setting to encourage more open discussion and limit the number of interruptions.
Invest in Technology
As technology becomes increasingly essential, nonprofits need to keep up. The right tools and systems can help them automate processes, increase employee efficiency, and reduce errors. This can also improve donor satisfaction and retention.
To get started, nonprofits should look for software vendors that offer scalable packages and support services. Additionally, they should seek peer recommendations and compare options before choosing a vendor. Further, nonprofits should take the time to understand their needs and consider the long-term impacts of technology investments.
For example, many grantmakers require nonprofits to collect data that shows their impact and growth over time. Having the right nonprofit software in place can help organizations meet these requirements and secure additional funding.
Additionally, many tech companies provide free or discounted services specifically for nonprofits. This can help organizations minimize costs and start using these technologies immediately. Finally, incorporating technology into the organization’s strategy and structure can help nonprofits identify opportunities and improve their performance faster than their competitors. This will ultimately lead to tremendous success and sustainability.
Have Regular Meetings with Your Staff
Weekly meetings are scheduled get-togethers that a group of people have every week at the same time, either in-person or remotely. These regular meetings help team members progress through their weekly tasks and address any barriers or questions for the upcoming weeks.
The following tips should be followed to ensure that staff meetings are productive.
1. Ensure the meeting’s goals are clear and everyone knows what they are expected to do.
2. Add an ice-breaker to the meeting to promote engagement and enthusiasm.
3. avoid discussing disciplinary issues in front of the entire team. This can lead to embarrassment and discomfort and may be counterproductive to morale.
4. Be sure to have someone taking notes or recording the meeting. This is essential to document what was discussed and agreed upon and serve as evidence if there are any disputes.
5. Have the staff moderator be a senior member of your organization.
This helps ensure all voices are heard and everyone is held accountable.