 Nonprofit leaders have to develop, at a minimum, a basic skill set in financial management. These skills start in the critical areas of cash management and bookkeeping. Leaders should also have an understanding of how to generate financial statements and be able to analyze those statements to be able to really grasp the financial condition of the organization. Financial analysis shows the "reality" of the situation of a business -- seen as such, financial management is one of the most critical practices in management.
News
Bookkeeping: To Outsource or Not to Outsource?The most strategic decision you make regarding how to staff your accounting department may be to not staff it at all. Well, at least not with employees of your organization. Outsourced accounting -- having the accounting done by an outside person or firm -- isn't new, but it is getting a second look as nonprofits search for ways to cut office costs.
Read more...
A Board-Staff Agreement for Financial AccountabilityNot all board members need to be familiar with financial terms and concepts, but
each organization needs to develop a clear and explicit agreement for how financial
accountability will be ensured. This article offers a starting point for an
agreement that the board and staff can make to ensure a partnership for
accountability.
Read more...
Uniform Prudent Management of Institutional Funds Act
Erin Stearns, an associate attorney in the Trust and Estate Department at McLane, Graf, Raulerson & Middleton, P.A. has contributed an article on the newly passed Uniform Prudent Management of Institutional Funds Act ("UPMIFA"). Her article outlines some of the changes under this new act.
Read the article
Preventing Fraud: From Fiduciary Duty to Practical StrategiesThis article, which appeared in the New Hampshire Bar Journal will help both nonprofit and for-profit organizations identify the possibilities for fraud and embezzlement in their organizations and understand the steps they need to take to prevent these behaviors. The article emphasizes the need for boards of directors to take the lead in engaging their officers and employees in crafting policies and procedures to minimize the possibility for fraud and embezzlement.
Read the article...
Nonprofit Embezzlement: More Common and More Preventable Than You ThinkEmbezzlement -- fraud committed by employees and volunteers -- is especially painful in community nonprofits. Not only is real damage done to our organization, but we feel that our cause has been betrayed by someone we trusted and liked. We worry that donors and grantmakers will be less likely to give us money if they hear about it. And because embezzlement is so often kept quiet in nonprofits, we might think that we are the only ones to experience it. This article from BlueAvocado.com explores some of the most common types of nonprofit embezzlement and how to deal with them? Read more...
Opportunities in Lean TimesThe economic crisis that's unfolding is causing great anxiety that no sector is immune to. Fieldstone Alliance proposes that in turmoil there is also opportunity and they have complied some resources for nonprofits. Read more...
Resources
The Fieldstone Alliance provides free tools on nonprofit finances and publications and workbooks for purchase, and other resources.
The Free Management Library offers the Basic Guide to Non-Profit Financial Management with a wide variety of information and links to other resources on every aspect of financial management.
Nonprofits Assistance Fund offers a Financial Management Self-Assessment for Nonprofit Organizations, a checklist to help assess your organization's financial management practices and identify areas for improvement.
Cool Online Tool to Help You Stay Exempt
The
IRS has launched an new easy interactive tool. It is more of a game
that the reader can follow along with to help all nonprofits stay
exempt. The online training tool, Stay Exempt, provides you with the
knowledge you need to help you keep your organization’s exempt status
intact. It consists of five interactive courses, which you can take
individually and in any order.
UCOA, the Unified Chart of Accounts for nonprofit organizations,
is a chart of accounts freely available at the National Center for
Charitable Statistics (NCCS) website. It is available in a Quick Books
file and Excel. The system is designed so that nonprofits can quickly
and reliably translate their financial statements into the categories
required by the IRS Form 990, the federal Office of Management and
Budget, and into other standard reporting formats.
Looking for sample document related to financial management? BoardSource offers a variety of sample documents available for downloading at a nominal cost. Search their bookstore for these downloads as well as other resources.
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