Handling finances for a non-profit can feel like juggling fire. From tracking donations, managing grants and reporting back to stakeholders, it can all become overwhelming quickly. But with some strategic moves and appropriate tools at your disposal, managing finances for a non-profit doesn’t need to be such a stressful process. In this blog, we will look at how to manage non-profit finances easier so that you look like an organizational genius.
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Understand the Basics (And Don’t Be Afraid to Ask for Help)
Make sure everyone on your team understands the fundamentals. Financial literacy shouldn’t just be limited to your accountant or treasurer. Break down your budget, major revenue sources (grants, donations and sponsorships), and expenditures as a team exercise. Hold informational sessions for all staff involved or invite an outside financial expert in for a talkthrough of key principles. An informed team is less likely to make mistakes and more likely to assist others.
Choose the Right Tools for the Job
Spreadsheets may be great, but they’re often not enough to meet your organization’s needs. Financial management software designed specifically for non-profits such as Aplos can make life infinitely simpler by automating tedious tasks such as donor tracking, grant reporting and budgeting while decreasing errors. For organizations on a tight budget (who isn’t?) discount programs may provide affordable technology solutions like TechSoup offer discounted software licenses at reduced rates. Remember investing now could save time, money and energy later.
Obtain an IRS EIN Number for Your Non-Profit
Establishing your non-profit requires obtaining an IRS Employer Identification Number, otherwise known as EIN, in order to operate legally. An EIN acts as the federal tax identification number required for tax filings, opening bank accounts, and applying for grants. You can get IRS EIN number application help online. Do your research and secure all required numbers before moving forward with financial management. Having an EIN not only establishes your non-profit as a legal entity but also facilitates transparent financial operations. Be sure to store this number safely, as it will be important when conducting various organizational activities.
Make Donations Easy
Donations likely represent the majority of your nonprofit’s income. To maximize donor participation make the donation process as seamless and secure as possible for donors to give. Use an online donation platform like DonorBox or PayPal Giving Fund that’s user friendly and secure so fewer clicks is needed for someone to give. But don’t stop there, make sure that donors are thanked promptly with automated thank-you messages when possible and follow up with personalized notes when appropriate for forming good will and increasing future donations.
Track Every Penny Like It Was Your Own
Transparency is of the utmost importance when managing non-profit finances, so make sure to track every penny like it were your own. By carefully keeping records of every penny coming and going out, not only will this ensure compliance with tax regulations and grant requirements but will also build trust between donors, stakeholders, board members and funders. Financial software makes this task simple so detailed reports can easily be shared among stakeholders.
Plan for Financial Sustainability
Nonprofits often become preoccupied with current projects that they neglect to plan ahead financially. Don’t fall into that trap. Compose a long-term financial plan that includes diverse sources of income. Don’t rely on one grant or donor as your sole source. Build an endowment, launch recurring donor campaigns or forge partnerships with local businesses in order to secure steady cash flows for years ahead.
Conclusion
Your nonprofit’s finances should support its mission, not hinder it. By arming yourself with the appropriate tools, policies, and a positive mentality you can simplify financial management so you can focus on doing good work that changes lives instead. With these strategies you’ll soon bid farewell to sleepless nights over numbers in favor of creating a more efficient, impactful organization.
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