Nonprofit organizations are essential players in providing a variety of community services. In fact, they’re important for charity work and the economy – in 2012, over 10% of people employed in the U.S. worked at nonprofit organizations. If you help run a nonprofit, you may be wondering how you can improve your organization’s finances to ensure benefits the community for years to come. Fortunately, it’s not as complicated as it might seem! Take a look at these three possible strategies.
1. Try Professional Software
To get your finances organized, you’ll need a good system for storing and retrieving data. One of the best technologies to help with this is mip fund accounting, which can help your nonprofit with everything from managing payroll to planning out budgets. When doing your accounting by hand the old-fashioned way isn’t enough for the size and scope of your organization, consider giving professional technologies a try.
2. Have a Rainy Day Fund
One mistake some nonprofits make is to put all of their financial resources into achieving their mission, while neglecting to build up a reserve, or rainy day, fund to get them through the tough times. Just like having an emergency fund is a good personal finance strategy, having a reserve fund is a good backup plan for your nonprofit to ensure that you make it through periods of feast and famine.
3. Consider Your Funding Sources
Another angle you may not have considered is your source(s) of funding. While at first, any new grant may seem exciting, it’s well worth the extra time and effort to look closer and determine whether there are hidden burdens associated with it that may end up sapping your time and resources, such as administrative costs.
Nonprofit organizations employ a large part of the American workforce and play important roles in improving conditions for the public. With these tips, it’s easy to improve your organization’s finances to help it remain a preeminent presence in your community.