411-Financial Management

Good financial management is crucial for nonprofit organizations. Here is some useful information to help ensure a smooth and complete process.

Financial management basics and best practices

Budget

Here is some helpful information about creating a budget. Be sure to start planning your annual budget at least three months before the end of your current fiscal year.

Payroll

Some argue that it’s better for smaller nonprofits to outsource their payroll, but if you are thinking of doing your own, here are some suggestions.

Audits

An audit can be a daunting process. In Massachusetts a formal audit is required for organizations with budgets over $500,000. An external financial review (less ambitious than an audit) is required for organizations between $200,000 and $500,000. Here is what you need to know about audit requirements,  which might help ease the burden.

Capacity building

You hear the term capacity building a lot, but you may not know what it means and why it is important. Here are some answers to your questions.

Third Sector New England provides Capacity Building grants to area nonprofits: Capacity Building Networks

Endowment

Thinking about starting an endowment?  They are not just for large organizations. They can be an important tool for long term discretionary and/or matching funds.

Reserve fund

In this unstable economy, it’s even more important for organizations to have a reserve fund. Most organizations should try and carry a reserve of at least 3 months operating expenses.

Financial management in tough economic times

It’s been a difficult time for many organizations. Here are some ways you can manage your budget and organization during this recession.

Fiscal year

All organizations operate on a fiscal year. Many nonprofit organizations’ fiscal year runs from July 1 to June 30.  Some use a calendar year and others model the federal government and run from October 1 to September 30.  It’s up to your board to decide what would work best for your organization.

Additional financial resources