Nonprofits care as much about their financial well-being as companies chasing a place on the Fortune 500 – at least they should because they can’t provide their essential services without a healthy bank balance.
Think of us as your financial fitness coach as we provide a workout plan with seven core exercises for financial strength and flexibility.
1) Financial Stability: Your Fitness Foundation
Without a solid foundation, your NFP can’t grow. Good foundations provide the stability needed to support growth and resilience.
Incorporate these three practices into your annual financial plan to strengthen your foundation.
- Monthly: Review income and expenses to spot leaks, improve cost savings, and keep your budget on track.
- Quarterly: An evaluation to identify opportunities and red flag potential dangers so you can act proactively.
- Annually: This is the big checkup; the one that tells you if you’ve met your goals, alerts you to any compliance issues, and provides the insight to rework your financial plan where necessary.
2) Governance Excellence: Your Fitness Tracker
This is kind of like monitoring your blood pressure, pulse, and steps. Are your decisions and actions increasing your NFP’s health or are you unintentionally falling into bad habits that sabotage your journey to success?
These three steps help keep your decisions strategic and your actions in line with company policies and ethical practices.
- Monthly: Review governance policies to ensure they comply with industry regulations and make necessary changes.
- Quarterly: Provide ongoing board training to keep their knowledge fresh and skills sharp.
- Annually: Conduct a governance audit to measure performance and implement strategies for improvement.
3) Impactful Programs: Heart Health
A healthy heart needs regular exercise. A healthy business also needs regular action to keep the lights on.
These three steps ensure that your business’s health aligns with your mission and delivers great ROI.
- Monthly: Get as much information from your programs as possible to properly analyze the data and retain your upward trajectory. Feedback from all parties involved can also provide insightful information for continuous improvement.
- Quarterly: Use analytics and metrics software to determine the efficiency and efficacy of programs, as well as identify areas for improvement.
- Annually: Conduct a comprehensive program evaluation, highlighting success and adjusting strategies as needed.
4) Engaged Donors: Healthy Immune System
Strive for a healthy immune system that protects your physical health from environmental nasties, making it vulnerable to injury and disease.
Donors protect NFPs from financial ruin by maintaining a steady stream of funds to run initiatives.
These three steps help you nurture donor relationships.
- Monthly: Communicate personally with donors, providing updates and heartfelt appreciation – without sounding like a brown nose.
- Quarterly: Host events that are donor and industry-relevant. For example, high-end donors might prefer a cocktail evening, while community gardens might prefer a BBQ and line dancing.
- Annually: Develop a donor stewardship plan that guides new donors towards a commitment to regular funding.
5) Tech Innovation: Health Functioning
People use temporary and permanent aids for healthy functioning: hearing aids; hip replacements; moon boots; and wheelchairs. They enable people to live ‘normal’ lives.
NFPs use digital tools, software, and tech solutions to enhance efficiency and ROI. Follow the three steps below to bolster your community impact.
- Monthly: Schedule regular software updates to optimise systems, security, and critical performance.
- Quarterly: Continually analyze the data needed to evaluate tech solutions and implement new, more effective, innovations.
- Annually: Develop a flexible tech roadmap to support your strategic goals and ensure proper resource allocation. Flexibility enables necessary adjustments to changing market conditions and a shifting financial landscape.
6) Leadership Growth: Spinal Health
Do exercises to maintain a strong spine that supports the entire body, enabling proper development and flexible mobility.
Strong leadership is required to keep NFPs upright, facilitating growth and development. Follow these three steps to improve your NFP’s leadership.
- Monthly: Department heads might be brilliant at implementing initiatives, but not delegation. Monthly training can cover various topics, for example, mastering delegation.
- Quarterly: Performance evaluations identify and reward success and areas that need training. Knowing how employees perform also ensures setting realistic goals for their skill set.
- Annually: Review the NFP’s performance, especially leader contributions and management. This identifies leadership strategies that need adjustments to improve functioning.
7) Community Collaboration: The Whole Body
Develop fitness and strength to improve the physical functioning of all body systems. The support ensures injury in one area (a cold), and doesn’t disable other areas (your spine).
Stakeholders must work together to keep the entire NFP operating optimally. A molehill in finance (absent staff), doesn’t create a mountain in service delivery.
These three steps will help you reach a wider audience.
- Monthly: Get personally involved; work in a community garden or host events.
- Quarterly: Research other NFPs and propose opportunities to collaborate on existing or new programs.
- Annually: Engage stakeholders and evaluate the effectiveness of initiatives from all perspectives. This enhances decision-making accuracy and facilitates successful outcomes (milestones/goals).
We’ve just killed two birds with one stone, covering health and NFP health within seven areas. The key takeaway is that building a successful roadmap requires regular checks to navigate 2024 with confidence and resilience and have a meaningful impact on your local community.
You can achieve this with financial reporting software that provides in-depth custom reports and the tools to assess data, especially regarding your NFP’s performance. Turn to Sage Intacct, a world leader in NFP accounting software solutions, and enjoy significantly reduced financial stress so you can meet your nonprofit’s goals.
