Session 6 : Planning for your Nonprofit’s Financial Health

The pandemic has created many hardships for nonprofits, especially financial and operational challenges. In this session speakers discussed current financial layouts and legal guidance that impacts a nonprofit’s financial success.

Session Overview

Financial Statements, Audits, Federal Grants

• Financial statements are important because they provide a historical listing of the organization’s financial situation.
• Know your revenue, where you are getting it and how it is being allocated. If you can build up reserves for emergencies (like a pandemic), do it.
• Use benchmarking and assess the impact of certain services to see which will give the highest yield.
• Make sure your program design is efficient in delivery (utilize technology, modify service level).
• Consolidate where you can in shared services (specializations, financial, HR).
• Collaborate with organizations with a similar mission for fundraising events and explore new areas of revenue.
• Review new standards of revenue recognition with auditors, especially for gifts and grants.
• Virtual audits are being conducted with the use of screen sharing and video calls.
• Single audits are applicable to entities that expend $750K or more in federal funds.

COVID-19 Grants Subject to Single Audits

COVID-19 Grants Not Subject to Single Audits

Takeaways

• Know the details of your financial situation and make sure board members are aware of it.
• If you received grants, gifts or other federal aid, know they could be subject to single audits, depending on the amount. Keep all documentation.
• Find different streams of revenue by checking services and programs the organization provides to the community. Measure their effectiveness and cost.