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There are special tax rules at the federal, state, and local level and very specific accounting rules to follow. For these reasons, having top-notch financial management is essential.

Four Essentials of Nonprofit Financial Management

There are four essentials to managing your money:. Neither donors nor boards and managers should rely on the audit process alone to assure that the organization is managing its finances appropriately. Most organizations should receive some level of independent financial assurance service. Annual audits are highly recommended for large organizations and those with federal contracts, while a two-to-three year cycle of audits and financial reviews are suggested for smaller organizations.

If your organization is preparing for a financial audit, you will find some helpful information in this article: An organization that's too small to pay for an audit should periodically find an accountant or bookkeeper familiar with nonprofit financial requirements a volunteer or someone paid on contract to look over their books, financial reports, and processes. This will not be the same as an audit, but it can help you avoid major problems.

If you need to select an auditor, search under "Financial Management - Audits" in the Resource Directory.

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The audit firms listed there have been screened and come recommended by other nonprofits. The resources below provide guidance and tools, so your organization will have key policies and internal controls in place. The leadership and board must monitor the organization's financial performance to be sure that it's:.

Your financial statements tell your story to government, donors, volunteers, and foundations.


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If you do not understand the story the statements are telling, you may not know what is helping or hurting your success with fundraising. This one-page Financial Red Flags Checklist gives you some ideas about concerns a foundation, government contract officer, or individual donor may have based on a review of your financial statements.


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  7. Financial Management - National Council of Nonprofits. Board Members Finance and Accounting Booklet. In addition, she worked in the for profit world with several Fortune companies. Jo Ann also continues to be actively involved with her own community and does volunteer work for organizations promoting music and education.

    Financial Management for Nonprofit Organizations : Policies and Practices

    Seidner has written many financial reference works and is a frequent speaker on investment techniques and strategies. He has also provided testimony before federal government agencies on the performance of pension fund investments. Promote your book on NHBS.


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