Our staff here at the Community Forward Fund have many years of combined experience working with nonprofits, and if there’s one critical factor we’ve found that often hinders the success of smaller organizations it’s that they lack the resources to bring in employees with specialized expertise in areas of finance. Without this level of knowledge, organizations have difficulty maximizing their resources, accessing credit and making fiscally sound programming decisions. Anjali Deshmukh and Angela Francis’ blog post “How Small Nonprofits can Improve their Fiscal Health” over at The Chronicle of Philanthropy elegantly summarizes this problem and offers sound advice to organizations and grant providers.
The phrase that stuck with us most from the blog was the caution to “Pay as much attention to financial practices as you do to mission.” This is strikingly similar to our mindset. We would say, “Pay critical attention to financial practices, as they impact your mission directly.” These phrases are on the surface simple pieces of advice, but they could not be more crucial for nonprofits in today’s economy. It is simply not feasible or even desirable for any organization to conduct its work without putting in place sound financial practices that will allow it to continue to operate for years down the line.
Deshmukh and Francis recommend borrowing templates from peer organizations and/or bringing in board members with financial expertise; to this we would add that Canadian nonprofits have the opportunity to access CFF’s Financial Coaching and Review Services, which is designed to give managers and directors a better idea of their own organization’s financial health and of ongoing trends in the sector.
Check out The Chronicle of Philanthropy blog here and let us know what you think using the social media links below!