Nonprofit Ratios: Operating Reserves      Financial ratios are essential metrics that can help you evaluate the oversight needed for the bigger picture of your organization's finances. Today, we’ll discuss the operating reserve ratio. This ratio answers the question, “How long can your nonprofit...

Planning for the Future: What To Do When Your Nonprofit Experiences a Net Profit      As a nonprofit leader, you know that financial health is completely essential to your organization's success. So what do you do when you actually have a profit? Let's talk about how to track and plan for a prof...

How to Make Sense of a Difficult Nonprofit Financial Report      My hope is that you're getting a clear and understandable financial report that makes your nonprofit decisions easy and actionable… but my experience says you're probably not. So I wanted to give some ideas on what to do if you're ...

The Truth About Fund Accounting: Can Nonprofits Benefit?       Fund accounting is a system that's used to track the amount of cash assigned for different purposes and the usage of that cash. Well, today I want to unpack the truth about this idea of fund accounting. Fund accounting is tedious an...

Discover How Nonprofits Are Transforming Their Financials Now!   One of the biggest financial mistakes I've ever seen is when a nonprofit looks at their bank account to decide whether to spend money on a new project.  Worse yet, when a nonprofit’s finances are tight and they're barely scraping ...

How Do Nonprofits Track Restricted Funds?  If you’ve watched any of my previous videos or read my blogs, there’s a good chance you’ve already heard me emphasize the importance of differentiating restricted funds from unrestricted funds when measuring your net assets. Well, today I want to move b...

Should a nonprofit have a reserve? That’s the question I get asked the most. More often than any other question, I hear, “Should a nonprofit have cash reserves?”  Well, the short answer to this question is… “Yes!” A good rule of thumb is to set aside at least two months of operating expenses. Th...

 How Much Debt Should A Nonprofit Have?  In a perfect world, the generosity of God’s people is so extravagant that you will borrow ZERO. I know we don't live in an ideal world, and sometimes there's an opportunity or the need to grow before the funding has all come in.  For-profit organizations...

Now more than ever is a great time to be a nonprofit!  Stewarding the financial resources of each mission driven organization is critical.  Today I’m going to share the two most important reports you may see as a nonprofit leader or board member.   Report One: The Balance Sheet The balance she...

At first it sounds scary - fiduciary duty! What is it?  BoardSource defines fiduciary duty as requirement for:  “Board members to stay objective, unselfish, responsible, honest, trustworthy, and efficient. Board members, as stewards of public trust, must always act for the good of the organizat...