7 Tips to Make Your Nonprofit Financially Healthy by Sandy Free

Keeping your nonprofit financially healthy should be your priority.  You cannot serve your mission and purpose if you have to close.

These have rapidly become some of the most challenging times most of us have ever seen. Even for nonprofit leaders who are accustomed to making much of little, the repercussions of the current downturn are difficult to fathom and challenging to address.

Nonprofit leaders are unanimous on this topic: open and frequent communication is very important when facing uncertainty. All stakeholders—employees, board members, funders, and even constituents—need to know where the organization stands and what its plans are. Employees also need to know where they stand personally. This helps keep people engaged and inspires them to be part of the solution.

As a bookkeeper who focuses on nonprofits, I wanted to add value to my clients, so I reached out to some of the top thought leaders in this field and here are some of their tips:

1. Best Road to Financial Health {Mary Cahalane – Hands on Fundraising, LLC – mary@mcahalane.com}

The best way to ensure your organization’s financial health is to invest in your fundraising program.  As Roger Craver notes, investing in stocks, bonds and other financial instruments may give you 1% or 2% annual return.  He continues: “It’s almost a dereliction of a board’s fiduciary responsibility to not invest some of those reserves judiciously in donor recruitment and development.  An investment that would yield an annual rate of return for most organizations of 20%, 30% or even more.”

To invest wisely in fundraising, you have to assess your program to be sure you’re putting your money well.  If you’re not already focusing on retaining donors, start with retention. There’s no point in investing if you’re letting your donors (and money) walk right back out the door!3 

 

2. Storytelling {Julia Claire Campbell, MPA – Nonprofit Storytelling and Social Media Strategy – julie@jcsocialmarketing.com}

To ensure the financial health of your nonprofit, you have to figure out a way to collect, craft, and share the best and most compelling stories about the work of your organization. Storytelling remains the most effective way to raise money and to increase visibility for your cause. Sharing impact stories on a regular basis will deepen relationships with existing donors, and increase donor retention because they will feel appreciated and know where their gifts went.

 

3. Wheat State Insurance Group {Cheri Trefethen – ctrefethen@wheatstateinsurancegroup.com}

Having the right insurance coverage in force is a start to prevent unwanted losses that can bankrupt.  Also using the right carrier. Carriers that are familiar with the risk and can grow as the nonprofit grows.  The carrier (agent) needs to have passion, know the needs of the nonprofit, know their vision to be able to write the proper amounts and write the kind of insurance needed i.e. liability, D&O, etc.  The carrier (agent) needs to be contacted at the beginning to assure the nonprofit knows the cost and the risk is covered. The nonprofits bookkeeper or accountant can work closely with the agent to advise and work as a team for the best outcome.

 

4. Revenue and Expense {Maddie Grant – Culture Consultant and Digital Strategist, Human Workplaces – maddie@humanworkplaces.net}

Help everyone in your nonprofit actually understand the ins and outs of both the revenue side and the expense side. You’d be amazed at how much employees will do when they understand the business model–and the real success drivers–at a deeper level. When you build that capacity inside your culture, it will pay off.” 

 

5. Infrastructure {Gail Perry – FiredUp Fundraising, President – gp@gailperry.com}

Make sure you invest in infrastructure. Because if you direct your money to programming and never build your organization’s infrastructure, then you’ll never grow. You’ll stay right on the same hamster wheel, spinning away.  Infrastructure means that you build up your base of donors, and stay in touch with them regularly. You value your donors and you spend time, energy and resources nurturing them as true partners in your mission.  That is the way to build long-term, sustainable funding for your work.

 

6. Strategic Plan {Sandy Free – Devoted Bookkeeping LLC, President – Profit and Growth Strategist – sfree@cox.net}

A proper strategic plan that can and will be utilized is essential to solving most financial shortcomings. Such a plan will keep everyone within and associated with the organization going in the same direction. Perhaps, more importantly, it will keep missteps to a minimum.  Time and time again, I see small and even medium-size nonprofits trying to operate without a strategic plan. The mere act of pulling all the key players together to create a proper strategic plan can be a game changer for such organizations.

 

7. Fundraising {Jay Frost – jay@frostonfundraising.com}

 

Make sure your fundraising is like a well-designed exercise plan. First, commit to fundraising as a part of what you do every day. Second, be balanced. Focus on the whole body of your donor universe, not just one part. In fundraising terms, that means you need to work on building up your many donors of modest gifts and that less numerous but critically important group of donors who make major gifts. Third, keep hydrated and fueled. In other words, continually welcome new friends into your universe of support. Fourth, listen to your body of donors. If something doesn’t feel right, make an adjustment in accordance with the needs and interests of your supporters. In the end, fundraising is really all about them. In short, fundraising that is well planned, balanced, sustained, and aware is key to the overall health of your organization.”

 

About Sandy Free

Sandy Free is the owner of Devoted Bookkeeping LLC and Teach Out of Poverty Inc.  Certified Profit First Professional, Certified Growth Strategist and Certified QuickBooks Online Pro Advisor.  For over 35 years, Sandy has been in the bookkeeping industry and over 15 years in the Nonprofit world. (https://devotedbookkeeping.com)

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