Tips for Smarter Financial Management at Nonprofits
December 4, 2011 | Read Time: 1 minute
- Develop a plan to allocate indirect costs, such as rent and utilities, to each of the organization’s programs and apply that plan consistently.
- Consider total program costs when deciding whether to accept a contract or grant; make sure it would cover all expenses.
- Budget conservatively, using data about the number of clients programs typically attract.
- Make sure the group’s accounting software can track expenses by program as well as by contract or grant.
- Build a system for providing up-to-date financial information.
- Monitor revenue and expenses closely to identify potential financial problems early and make changes.
- Develop a way to share financial data regularly with all employees.
- Build a reserve fund. Healthy reserves can make it easier to say no to contracts and grants that aren’t right for the charity.
