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The Difference between a Bookkeeper, an Accountant, and a CFO

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When most people think of an organization’s financial department, they think of accountants. But did you know there are a variety of financial professionals that are essential to the financial well-being of an organization?

Bookkeepers, accountants, and Chief Financial Officers (CFOs) all serve critical roles in managing an organization’s finances. This guide will walk you through the function of each role and how they compare to one another.

Accountant

What is a Bookkeeper?

A bookkeeper is a financial professional responsible for recording and managing a nonprofit’s daily financial transitions. Their primary role is to ensure that all transactions are entered into the accounting system with accuracy and consistency. Common nonprofit bookkeeping tasks include:

  • Recording donations
  • Entering accounts payable and receivable
  • Organizing and reviewing bank statements
  • Maintaining the general ledger

These everyday financial duties help bookkeepers provide a clear and up-to-date picture of the nonprofit’s financial status. An accurate bookkeeper helps a nonprofit maintain financial transparency and accountability by making it easy to track how funds are received and spent.

What is an Accountant?

Accountants run reports to help determine if the bookkeeping is done correctly. An accountant’s role goes beyond simple record-keeping and might include:

  • Creates reconciliations of account balances
  • Reviews general ledger activities for accuracy
  • Prepare basic financial reports
  • Ensures that accounting follows generally accepted accounting principles (GAAP)

Nonprofit accountants use their advanced knowledge of accounting principles and regulations to ensure an organization’s financial practices are sound. They also help nonprofit leaders maintain compliance with legal standards and tax regulations. Properly managing an organization’s taxes helps ensure the nonprofit maintains its exempt tax status.

What is a Chief Financial Officer (CFO)?

A Chief Financial Officer (CFO) is a senior executive in charge of the strategic direction and goal setting of a nonprofit’s accounting and financial management. The CFO role generally includes:

responsible for the strategic direction and goal setting of a nonprofits accounting and financial management. Responsibilities typically include advanced analysis and reporting, budgeting, etc.

  • Advanced analysis and reporting
  • Budgeting and forecasting

A nonprofit CFO oversees all financial operations to ensure the organization’s financial practices align with its long-term goals and mission. As an executive-level role, the CFO is in charge of guiding the overall financial strategy of the organization.

Nonprofit CFOs are also responsible for clearly and accurately reporting financial data to the board of directors. They will also help guide and advise other key stakeholders such as the nonprofit executive director.

Comparing the Roles of Bookkeeper, Accountant, and CFO

Bookkeepers, accountants, and CFOs all play important roles in the financial health of an organization. Each role provides a unique set of skills and fills various financial needs of an organization.

Let’s take a closer look at the responsibilities, scope of work, and educational requirements for these nonprofit financial roles.

Level of Responsibility

Generally, a bookkeeper has the most direct responsibilities in an organization. Their job is to maintain accurate records of daily transactions. The bookkeeper’s focus on accuracy forms the foundation for all financial activities in the organization.

An accountant takes on a higher level of responsibility than a bookkeeper. Accountants interpret and analyze the financial data provided by bookkeepers to prepare reports and ensure the accuracy of bookkeeping.

The CFO is the top level of responsibility in the financial department of an organization. Thus, the nonprofit CFO carries the most significant responsibility out of the three by overseeing the entire financial strategy and management of the nonprofit. They’ll need to provide strategic planning, financial forecasting, and risk management while working with the board of directors.

Scope of Work

The scope of work for each financial role in a nonprofit reflects the role’s distinct responsibilities and expertise. A bookkeeper’s scope of work is primarily transactional and administrative. For example, recording the day-to-day transactions.

Accountants often have a broader scope of work that involves checking the bookkeeping for accuracy. If mistakes or inaccuracies are found, the accountant often is tasked with correcting issues.

At the highest level, the CFO’s scope of work includes strategic management and leadership. The CFO generally works on high-level projects, such as creating a yearly operating budget.

Educational and Professional Requirements

Most nonprofit bookkeeper roles require a high school diploma or similar, as well as proficiency in accounting software and attention to detail. Some organizations may prefer bookkeepers to have a degree in accounting or related fields. Many nonprofit bookkeepers complete additional on-the-job certification or training programs.

An accountant generally holds a bachelor’s degree in accounting or finance. Some nonprofit accountants are also Certified Public Accountants (CPA), though it’s typically not required.

Educational requirements for a nonprofit CFO often include a bachelor’s degree or higher in accounting, finance, economics, or a related field. However, possessing analytical and strategic thinking skills–along with extensive experience in the nonprofit financial industry–are often more important for CFOs than degrees. Leadership skills are also essential for a CFO, and some nonprofits look for a CFO with an MBA.

Accountant

Which Financial Professional Does Your Nonprofit Need?

Finding the right financial professional–or combination of professionals–for your nonprofit helps ensure your financials are accurately and efficiently managed. So, do you need a bookkeeper, accountant, or CFO?

The answer is most nonprofits need all of the skills of a bookkeeper, accountant, and CFO in some capacity. Although about 80% of nonprofit accounting work is transactional and can be handled by a bookkeeper, only hiring a bookkeeper means losing 20% of their accounting needs. On the other hand, hiring a CFO to handle all of the day-to-day transactional work of a nonprofit typically leads to burnout and high turnover.

Hiring individuals for each role isn’t feasible for many nonprofit organizations. The solution for many organizations is to outsource their financial needs to a trusted nonprofit accounting firm.

Firms like The Charity CFO provide comprehensive bookkeeping, accounting, and fractional CFO services. Our service team includes an Accounting Associate to handle the day-to-day work and a CFO to handle the strategic side of things. We specialize in nonprofit accounting, so you can be sure we understand the needs and challenges of the nonprofit industry.

Learn more about our nonprofit financial services by contacting us today!

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Why Nonprofits Need to Switch from Cash-Basis to Accrual-Basis Accounting

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The type of accounting your organization uses could be holding you back from getting the most out of your accounting system. While many nonprofits start with cash-basis accounting due to its simplicity, this method often falls short of providing a comprehensive view of a nonprofit’s financial health.

Transitioning to accrual-basis accounting can offer a more accurate representation of finances and enhance long-term planning. Let’s look at the differences between cash-basis and accrual accounting and why you might want to switch.

Accrual-Basis Accounting

Understanding Cash-Basis vs. Accrual-Basis Accounting

Before we can know why to switch accounting systems, it’s important to understand how each system works. The main difference between cash-basis and accrual-basis accounting is when revenue and expenses are recorded.

In cash-basis accounting, revenue gets reported only when the cash is physically (or digitally) received. Likewise, expenses are recorded when money leaves the organization’s account. Cash-basis accounting is most common for smaller nonprofits, where financials tend to be less complicated.

Accrual-basis accounting, on the other hand, records revenue and expenses when they are incurred. The accrual-basis method records transactions with the assumption that the money will physically change hands in the future.

For example, a nonprofit provides a paid service to a community member and issues an invoice. The revenue from the service is recorded now, even though the invoice hasn’t yet been paid.

Limitations of Cash-Basis Accounting for Nonprofits

Cash-basis accounting is a simple method that’s great for new or small nonprofits. However, there are two major limitations to using the cash-basis method:

  • It inaccurately represents financial health.
  • It can cause challenges in long-term financial planning.

The timing of an organization’s income and expenses in cash-basis accounting can misrepresent the actual financial state of the nonprofit. Additionally, the cash-basis method can make accurate forecasting and budgeting difficult.

Say a nonprofit hosts a large fundraising event in the second quarter. The costs for the event are all paid in the first quarter, but donation funds and other revenue won’t come through until the second quarter.

By using the cash-basis method, this organization would look like it’s struggling financially in the first quarter but has a major surplus in the second. The reality is somewhere in the middle, but the organization may be tempted to under budget for the first quarter and over budget for the second.

Benefits of Accrual-Basis Accounting for Nonprofits

Switching to accrual-based accounting can have a lot of benefits for nonprofit organizations. Most importantly, making the switch can help your organization:

  • Enhance the accuracy of financial data
  • Increase transparency
  • Improve financial decision-making

Enhanced Financial Accuracy

By recording revenue and expenses when they happen, instead of when cash is exchanged, helps provide a more accurate picture of the organization’s financial health at any given time. You’ll get a better view of long-term financial transactions, rather than just seeing what cash is currently in an account.

Accrual accounting also helps keep related revenues and expenses together. Matching revenues with the expenses incurred to generate them reflects the true cost of running programs and services.

Improved Financial Transparency

Accrual accounting provides stakeholders with a detailed view of your organization’s financial activities, improving trust and confidence. Transparent financial reporting can also improve donor relations. With increased transparency through accrual accounting, donors can see how their contributions are being used and the impact they’re making.

Better transparency also helps you stay compliant with regulations or grant requirements. Many regulatory bodies and grantors require accrual-basis financial statements. Adopting the accrual method ensures compliance with Generally Accepted Accounting Principles (GAAP) and other relevant standards. By making the switch, you could open your organization up to more grants and funding opportunities.

Facilitates Better Decision-Making

A more accurate understanding of your organization’s financial health means nonprofit leaders can make better strategic, data-driven decisions. Accrual accounting provides the data needed to forecast cash flow, budget more effectively, and allocate resources where needed most.

An accrual-based accounting system also gives you insights into the efficiency and effectiveness of programs and services. Detailed financial reports generated using the accrual method can highlight inefficiencies and areas for improvement within your organization. By analyzing the financial performance of programs, you can determine which initiatives are delivering the most value–and which may need adjustments or more support.

Accrual-Basis Accounting

Get Support for Your Cash-Basis to Accrual-Basis Transition

The cash-basis accounting method is simple, but simplicity could be holding your organization back. Moving from cash-basis to accrual-basis accounting can help your nonprofit better manage its financial health and improve transparency. 

While switching to accrual-basis accounting can be daunting, the easiest way to make the switch is to work with a trusted nonprofit accounting firm, such as The Charity CFO.

Our dedicated team of accounting professionals specializes in nonprofit accounting–ensuring your organization gets advice from accountants who understand the unique needs of nonprofits. Get in touch today to see how we can help you transition accounting systems!

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What to Look for in Nonprofit Accounting Services

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Choosing the right accounting services is crucial for the financial health of your nonprofit. The right nonprofit accountant helps your organization properly manage its finances, which improves trust and transparency with stakeholders and donors.

nonprofit accounting services

Let’s explore the key factors to consider when researching nonprofit accounting services–from the firm’s expertise to its technology recommendations–so you can be sure you’re getting the nonprofit accounting your organization needs.

1. Nonprofit Accounting Expertise and Experience

Nonprofit accounting isn’t the same as for-profit business accounting. Your organization needs a nonprofit accountant who understands the differences and has experience in nonprofit accounting. Look for accounting firms that specialize in nonprofit accounting when researching accounting services.

Specialized nonprofit accountants know the ins and outs of nonprofit accounting, so they can easily jump into managing your organization’s finances. Unlike a generalized accountant, nonprofit accountants already understand the unique challenges and regulations nonprofit organizations face. This can be especially important when it comes to reporting and filing requirements.

2. Services Offered

When selecting nonprofit accounting services, looking for a firm that offers a comprehensive suite of services tailored to your needs is important. There’s a wide range of accounting services your organization might need, including:

  • Bookkeeping
  • Financial reporting
  • Tax preparation
  • Audit support

These key services are vital to maintaining the financial health of your organization. Proper tax preparation, for example, can help your nonprofit stay compliant with financial regulations and maintain tax-exempt status. Likewise, an accountant who offers financial reporting services can help you choose and prepare the right financial reports for your board of directors, donors, or the general public.

Additionally, most nonprofit accounting services include specialized services for nonprofits, such as:

  • Grant management
  • Providing recommendations for best practices as your organization scales
  • Financial goal setting

Specialized accounting services like grant management help your organization efficiently manage funds to help meet donor expectations and plan for growth and sustainability.

3. Technology and Tools

The modern world is built on technology, and nonprofits are no different. Technology is one of the most important tools in modern nonprofit accounting. When researching nonprofit accounting services, aim to work with a firm that embraces and encourages technology like accounting software or donor management systems.

A good nonprofit accounting firm will work with you to find the right technology tools to help you simplify your bookkeeping. For example, they might recommend tools that make it easier for employees to track expenses using a mobile app. This eliminates the need to collect paper receipts from employees and streamlines your accounting systems.

You should also choose nonprofit accounting services that prioritize nonprofit data privacy. Data breaches can plummet public trust in your organization, so it’s important to use secure technology and software.

4. Customization and Scalability

You may not need the full range of your accountant’s nonprofit accounting services right now. But what happens as your organization grows? You’ll likely need expanded accounting services.

Your nonprofit accounting services should be customized to fit your current needs. However, you also want to work with an accountant who can scale your services to fit your future needs. Consider the future of your organization as you look for nonprofit accounting services.

5. Transparency and Communication

Accountants often work with sensitive financial data. It’s no surprise that should look for nonprofit accounting services from a trustworthy firm.

However, you also want to take the firm’s transparency and communication skills into consideration. Does the firm respond quickly to messages? Are they open and honest about the state of your organization’s financials? These factors can help you narrow down the right accounting services for your nonprofit.

6. Cost and Affordability

The final thing to look for in nonprofit accounting services is the price. Unfortunately, financial sustainability is one of the biggest challenges facing many nonprofits. You need to be sure you can afford the nonprofit accounting services your organization needs.

On the other hand, it usually doesn’t make sense to choose nonprofit accounting services based solely on cost. The key is to find accounting services that balance the cost with the quality of services provided.

Luckily, many nonprofit accounting services can be tailored to fit your needs–including your budget. As you look for accounting services, be sure to let potential accountants know your budget so they can build an accounting plan that meets your financial constraints.

nonprofit accounting services

Find the Right Nonprofit Accounting Services

Your nonprofit accountant is an important decision for your organization. Focus on these six factors when researching accounting services to ensure you find the right fit for your organization. The right accounting services will help your organization streamline financial processes, build trust with donors and stakeholders, and ultimately contribute to expanding your mission.

At The Charity CFO, we understand the unique financial and accounting needs of nonprofits. Our team specializes in nonprofit accounting and we take pride in being able to accurately and efficiently help nonprofits streamline their accounting processes. We’re here to help you better understand the financial health of your organization–and discover ways to improve.

Get in touch today for a free consultation on our nonprofit accounting services!

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What to Look for in a Nonprofit Accounting Partner

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Managing a nonprofit can be complex, especially when it comes to nonprofit accounting. Nonprofits face unique financial challenges and responsibilities that require specialized expertise and support. Finding the right accounting partner for your nonprofit is essential to the financial success of your nonprofit organization.

Take a closer look at the importance of a strong nonprofit accounting partner and what you should look for when choosing a nonprofit accountant for your organization.

accounting partner

The Importance of a Strong Nonprofit Accounting Partner

A nonprofit organization’s finances can be complicated, thanks to reporting and filing regulations and laws. In addition, you need to make sure your financial data is accurate and readily available for donors, board members, and other stakeholders.

Keeping up with your nonprofit’s accounting needs might simply take too much time away from your ability to run other aspects of your organization. That’s why you need a strong accounting partner who specializes in nonprofits.

A nonprofit accounting team provides important benefits to your organization, including:

  • Expertise in nonprofit financial regulations and reporting requirements
  • Understanding of nonprofit funding and grant management
  • Strategetic financial planning and advice tailored to nonprofits
  • Increased financial transparency and accountability throughout your organization
  • Resource optimization and improved cost efficiency through effective nonprofit accounting setup
  • Access to nonprofit sector insights and best practices from your knowledgeable nonprofit accountant

Elements for a Good Nonprofit Accounting Partner

Not all accounting firms are created equal, even those that specialize in nonprofit accounting. It’s important to do your due diligence when looking for an accounting partner. As you look for an accounting team, consider the elements that make a nonprofit accountant a good fit for your organization, such as:

  • Nonprofit accounting specialization
  • Commitment to accuracy and on-time reporting
  • Education and experience in providing financial planning and advice
  • Open communication channels and a team that’s regularly available for support
  • Knowledge and recommendations of technology and tools for your organization

Specialization in Nonprofit Accounting

One of the most important things to look for in your accounting partner is a firm that specializes in nonprofit accounting. Nonprofit accounting has several major differences from for-profit accounting. An accounting firm that specializes in nonprofit accounting knows the legal and tax limitations of a nonprofit organization.

In addition to knowing the legal requirements of nonprofit accounting, a good nonprofit accountant also understands the things that make the nonprofit sector unique. They’ll know how to approach common financial issues for nonprofits, such as limited budgets or restricted funds.

Accurate and Timely Reporting

Most nonprofit leaders have been there: you can’t make a crucial decision until a certain financial report comes in, but you’re never sure when the data will be available. Even worse, sometimes the report looks different than previous months–or it never shows up at all. This leaves you scrambling as you try to appease your board of directors and donors all while attempting to make data-driven decisions for your organization with inconsistent and inaccurate data.

Luckily, a good nonprofit accountant removes the responsibility of reporting from your shoulders. Your nonprofit accounting partner will help ensure your monthly financial statements and reports are delivered on time. They’ll also work to eliminate inaccuracies within your data, so you can make data-driven decisions you trust and avoid accounting mistakes that might come up in an audit.

Proactive Guidance and Expertise

An unexpected and sometimes overlooked element of a good nonprofit accounting team is the ability to offer financial guidance and expertise. Good nonprofit accountants do more than just provide reports, they also become your trusted source of nonprofit financial advice. You should aim to work with an accountant who has the experience to provide expertise and financial planning for your organization.

If you’re facing a financial question and your first thought is to reach out to your accounting partner for guidance, you’ve likely found a strong nonprofit accounting team. If you don’t trust their advice, it might be time to look for a new accounting team.

Strong Communication and Accessibility

Your nonprofit accountant can only provide expert advice and accurate reporting if you can easily get in touch with them. Whether you have a pressing filing question or just need general financial guidance, you want to be sure your accountant will respond to questions in a timely manner.

As you search for the right accounting firm, think about how easy they are to contact. Generally, a firm that is easy to communicate with before you’re even working together will remain so after you partner together. This can be an invaluable quality in your nonprofit accountant.

Technology and Tools

Technology can be an absolute game-changer for nonprofit organizations. However, technology and financial tools are only as good as their implementation and use.

Your nonprofit accounting partner should have knowledge of the latest accounting software and tools. They should be able to make expert recommendations for a tech stack that’s tailored to your organization’s unique needs.

accounting partner

Searching for an Experienced Accounting Partner?

The right accounting partner can make all the difference in managing your organization’s financial needs. From on-time reports to consistent, accurate data, a nonprofit-focused accounting team like The Charity CFO can help your organization be more effective and efficient.

While many accounting firms focus on for-profit business accounting, The Charity CFO specializes in nonprofit accounting. Our team meets every element of a strong nonprofit accounting firm by providing:

  • Nonprofit accounting expertise
  • A commitment to timely reporting with accurate data
  • Expert guidance and advice from nonprofit accounting specialists
  • Ongoing communication and a friendly, easy-to-reach team
  • Recommendations and education on the latest technology and tools for efficient nonprofit accounting

Want to learn how The Charity CFO can help manage your nonprofit’s financials? Contact us today!

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The Ideal Nonprofit Accounting Tech Stack

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Implementing technology into your nonprofit accounting process can help solve a variety of issues—from tracking receipts to properly recording donations. In most cases, technology helps improve the efficiency and accuracy of nonprofit accounting.

You’ll need to use the right technology systems to get these benefits. Known as a tech stack, building a comprehensive system from multiple tools is essential to successful technology use. Keep reading to learn more about building a tech stack for your organization and some of the programs we recommend for it.

tech stack

Accounting Can Be a Challenge for Nonprofit Organizations

One of the biggest challenges for nonprofits to overcome is accounting. Nonprofits are subject to a lot of legal and financial scrutiny. Your nonprofit accounting setup needs to be able to meet tax and legal regulation and reporting requirements so you stay in compliance and retain the public’s trust.

Some of the most common accounting challenges for nonprofits include:

  • Accurate everyday bookkeeping, from recording donations to paying invoices
  • Preparing accurate and consistent financial reports
  • Filing tax returns
  • Managing payroll
  • Organizing accounting and financial information into usable data

Nonprofits can leverage technology to help solve these problems. A good technology solution addresses each of your nonprofit accounting concerns. With the right tech in place, your organization can more accurately record and report your financial information and save your team a lot of time over paper accounting systems.

Integrate Accounting Tech to Build the Perfect Stack

As we mentioned before, a tech stack is a multi-solution technology system that works as a whole to solve your technology needs. Generally, tech stacks use several software programs or tech tools to meet technology needs that one platform can’t.

The key to a good stack is that your individual solutions work together seamlessly. In a well-organization stack, your programs work together to record and organize data across platforms.

Does it seem daunting to set that up?

The good news is most modern tech programs are designed to work with other common solutions through integrations. For example, your revenue recording software might integrate with your donation collection software so that when someone makes a donation it’s automatically recorded in your system.

tech stack

Elements of a Strong Nonprofit Accounting Tech Stack

How do you build a strong nonprofit accounting tech stack? The key is knowing what programs offer your organization the most benefit and work well together.

At The Charity CFO, we’ve found four tech tools that have worked for several of our clients to improve their accounting systems. An example of a strong nonprofit accounting tech stack includes:

  • QuickBooks Online
  • Dext
  • Bill
  • Fathom

It’s important to remember that this exact setup—while great for many nonprofits—may not be the best fit for your organization. Be sure to work with a trusted nonprofit accounting and technology team to help you find the right tech stack solution for your organization’s needs.

tech stack

QuickBooks Online

In our experience, most small- to mid-sized nonprofits benefit from using QuickBooks Online. QuickBooks provides an easy-to-use bookkeeping solution that puts all of your financial data in one place. Even better, the program is scalable to meet the needs of a growing or evolving organization.

We often recommend QuickBooks Online over nonprofit-specific accounting software for three reasons, it’s:

  • Cloud-based
  • Well-known
  • Features almost endless integrations

As a cloud-based solution, QuickBooks Online doesn’t require you to hire an expansive IT team or physically house expensive hardware. All of your financial data lives securely in the cloud, which also means you can access it from anywhere with a secure connection.

QuickBooks is also one of the most well-known accounting platforms and might even be the most widely used. You’d be hard-pressed to find an accountant or bookkeeper who doesn’t have experience with the platform. Working with a well-known system makes it easier for your accounting team to do their job without learning a complicated new system.

Most important to a tech stack, however, is QuickBooks Online’s ability to integrate with nearly any software or tech system you might need. By building your stack around this platform, you almost guarantee that any other system you use will seamlessly feed data to your bookkeeping database.

Dext

One of the most difficult aspects of nonprofit accounting is accurately recording transactions. Dext is a software that helps solve this problem. The program essentially creates an online storage bin to organize your receipts, bills, and deposits where your accountant can easily access them.

A great feature of Dext is the ability to use a mobile app to capture receipt and document data. Employees simply open the Dext app and snap a picture of a physical receipt or document. The app then prompts you to code the receipt so it can accurately record it in the system.

Dext integrates fully with QuickBooks Online, so when a receipt is uploaded to the Dext system, it’s also recorded in your bookkeeping software.

Bill

Bill (formerly Bill.com) is a tech solution for the accounts payable and accounts receivable cycle. The Bill platform works by uploading digital copies of vendor or contractor bills and sending them to the appropriate parties for approval.

You can even set up specific rules in the system that enforce your organization’s approval policies. For example, your nonprofit requires all bills over $500 to go to a specific individual for approval. If a bill comes through the system over that amount, the individual in charge of approval is notified and the bill won’t be approved until they give the all-clear.

This system of only paying approved bills is huge in helping reduce common mistakes caught in nonprofit audits. 

Fathom

Our final recommendation for many nonprofit tech stacks is Fathom, a reporting system that enhances the limited reports of QuickBooks Online. Although QuickBooks Online does a lot of things really well, its reporting options aren’t the best solution for many organizations that need more customization in their reports. Fathom eliminates these limitations.

Fathom pulls data from QuickBooks and generates monthly financial reports and dashboards. Organizations can use Fathom to customize their reports for various stakeholders in the organization.

tech stack

The Charity CFO is Your Partner in Building a Strong Tech Stack

Adding technology to the accounting system can help free up your time and improve your accuracy, but you must do it correctly. Your tech tools need to work with one another through integrations or you run the risk of a disorganized tech stack. Using platforms that work well together, such as QuickBooks Online and Bill, reduces the risk of inaccuracies across platforms.

The Charity CFO team specializes in helping nonprofit organizations improve their accounting systems. As nonprofit accountants, we know the struggles nonprofits often face in their accounting setup. We can help you streamline your accounting systems for accuracy and efficiency.

Contact us today to see how we can build a tech stack that gives you more time to focus on your mission.

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How to Fix Your Nonprofit Accounting

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Your nonprofit accounting system might not be the most exciting part of your organization, but it’s one of the most important aspects. An effective accounting system helps you stay in compliance with tax and legal regulations–helping you maintain your exempt status.

However, effective accounting isn’t just about following rules. An effective nonprofit accounting system also helps your organization stay transparent, manage funds wisely, and build trust with donors and the public.

If your organization’s accounting has gotten a little off track, there are things you can do to fix it. Keep reading to learn more.

nonprofit accounting

Take a Close Look at Your Current Accounting Practices

You can’t know what needs fixing in your accounting system until you dive in and examine your current practices. Before you start trying to fix things, consider doing a full review of your accounting system. Taking a close look at your current system helps you identify problem areas in your financial recording methods.

Your analysis should show you where your accounting system is working for your organization and any gaps or areas of concern. For example, you may find that your system is great at recording nonprofit revenue, but lacks an efficient process for categorizing various revenue streams.

Consider making a list of the challenges or issues you find in your accounting system. This list will help you better define how these inaccuracies or incomplete records are affecting your overall accounting strategy.

Get Your Financial Policies and Procedures in Order

Does your organization have written financial policies and procedures in place? Do all of your employees and volunteers know what to do when faced with common financial tasks?

If not, one of the first steps to fixing your nonprofit accounting is setting up these policies.

Having documented financial policies for your nonprofit organization is essential and helps with:

  • Compliance: Documented procedures help your organization maintain accurate records and stay on top of compliance regulations.
  • Accountability: A defined accounting policy makes it easy for anyone in the organization to know what’s going on with funds–which helps build donor and board member trust.
  • Operational Efficiency: Having set financial guidelines makes it easy to track and record financial transactions, improving the overall efficiency of your nonprofit.

To fix your accounting system, you’ll need to create a standardized set of policies and procedures for transactions and reporting. As you create your policies, make sure everything aligns with legal and regulatory requirements.

Focus on Budgeting and Financial Planning

Like standardized financial policies, budgeting is an important aspect of your nonprofit accounting system. Your budget helps you plan out expenses and revenue in advance so you have a better idea of the financial health of your organization. It’s also an important tool for transparency within your nonprofit. A budget shows stakeholders like the board of directors or donors how you’re using funds to advance your mission.

You’ll need to develop a realistic budget for your organization based on real nonprofit needs and goals. The easiest way to create an accurate budget is to use budget tracking based on historical financial data. You’ll use past revenue and expenses to estimate future funding and expense needs.

You should expect your budget to have minor variances from month to month. Try to review your budget every couple of months and make adjustments as needed to meet current financial needs.

Track and Report Donations and Grants

Properly recording and reporting nonprofit revenue should be a top priority in your new accounting system. If you don’t have them in place already, you’ll need to establish protocols for recording donations and grants. Your system should take into account any donor restrictions so you stay in compliance with donor or grant requirements.

You’ll also need to create a reporting system for donations and grants. Generally, organizations that receive funds are expected to report on the use and impact of the funds. Not only does reporting on fund use help you stay in compliance with donor wishes or legal requirements, it’s simply a great way to maintain transparency in your organization and with the public.

Monitor Cash Flow and Financial Health

An organization’s cash flow is often a good indicator of financial health. Regular review of your cash flow statements can help you spot financial problems before they grow into major issues. As you fix your accounting setup, you’ll want to start analyzing financial ratios for liquidity and sustainability. If you find your nonprofit is regularly over budget, it’s probably time to address expenses and revenue.

There are a few strategies to improve your cash flow management, including:

  • Reducing expenses, from cutting back on staff to delaying new programs or services
  • Looking for additional revenue streams, such as new donors or applying for grants
  • Adjusting timelines for accounts receivable invoices
  • Offering new payment options for donations or service fees, such as automatic payments or online payments

nonprofit accounting

Seeking Professional Assistance

Cleaning up a messy accounting system is often a tedious and overwhelming task. Not to mention, most nonprofit leaders have plenty of other things on their plates. Working with a professional accounting firm specializing in nonprofit accounting is a great way to fix your accounting system and save time.

Nonprofit accounting firms have specialized knowledge related to financial management for nonprofits. They know how to navigate the complicated legal landscape surrounding nonprofit accounting, so you can be sure your financial records comply with governing regulations. In addition, a nonprofit accounting team provides financial guidance tailored to your organization to help you use your funds more effectively and efficiently.

The Charity CFO is a nonprofit accounting firm that can help you clean up your current accounting issues and establish a strong accounting system going forward. Our team of nonprofit accounting specialists understands the needs and challenges of nonprofits.

Need help fixing your accounting issues? Contact us today to get started.

 No time to read this article now? Download it for later.

Nonprofit Audit Requirements: Do You Need An Audit?

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Are you clear on the nonprofit audit requirements for your organization?

Contrary to what many people envision, a nonprofit audit doesn’t usually start with a letter from the IRS. Instead, an independent nonprofit audit is something you choose to build trust in your nonprofit organization.

In fact, the IRS doesn’t issue requirements for nonprofits to be audited, but other federal and state agencies do in some circumstances.

Plus, many grantmakers, foundations, lenders, and donors will require an independent audit before giving money to your nonprofit organization.  

An audit can be a critical step for a growing nonprofit that needs to raise increasing amounts of funds. But it’s expensive. And time-consuming. So it’s not always a wise investment for some smaller nonprofits. 

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In this article, we’ll take a look at what an independent financial audit is and when your nonprofit might need one. And we’ll also look at your less-expensive alternatives for establishing financial credibility with your stakeholders.

What is a nonprofit financial audit? 

what_is_nonprofit_audit

A nonprofit financial audit is an independent examination of the accuracy of your accounting records, financial statements, and internal controls.

It confirms your compliance with federal grant management standards. And many federal and state agencies require audits, depending your organization’s fundraising, size, and spending. 

(For example, 26 states require an audit before a nonprofit can earn charitable registration — necessary for in-state fundraising. And, the Office of Management and Budget requires an audit when a nonprofit spends more than $750,000 in federal funds in a year through the end of 2024. Starting in 2025, the new threshold will increase to $1,000,000.)

When you pass the audit, you’ll receive a clean bill of health from your auditor and a professional opinion stating the accuracy and validity of your accounting records. It assures outside observers that “the organization’s financial records meet generally accepted accounting principles.”

Bottom line? An audit shows your organization is trustworthy, compliant, and well-managed. 

And that inspires trust and confidence among potential funders, banks, and other potential partners.

What a nonprofit financial audit is NOT: 

irs_audit

First, this isn’t the same as an IRS audit–it’s not an “I’m being audited!” situation. 

Instead, it is a decision to take proactive ownership of your organization’s financial health, transparency, and validity by hiring a professional to examine your books. 

It’s also not a compilation of your financial statements, your financial strategy, or a report of financial viability. Those are up to you and your in-house or outsourced accounting team. 

What are the nonprofit audit requirements? And is your organization required to have one?

There are no hard-and-fast rules for when you need to conduct an audit. But here are some of the common external triggers that may require you to conduct an independent audit: 

✔️ When you spend over $500,000 per year.
Nonprofits that spend $500,000 a year are typically required to do an annual audit (but this varies by state, so check your state’s requirements)

✔️ When it is in your bylaws.
Check your company’s founding documents. The founders may have stated the organization would complete annual audits.

✔️ When you receive federal funding.
Organizations that receive more than $750,000 in federal funding may be required to complete an audit.

✔️ When you want to get serious about grant funding.
Many grants require an audit (not a review or compilation) because it provides an opinion of assurance.

✔️ When you want to apply for a loan.
Many banks will ask for audited financials as a prerequisite for lending you money. 

Some internal changes may also trigger an audit: 

  • Changes in services, programs, or leadership 
  • Acquiring, merging with, or losing a partner organization  
  • Shifting debt, leases, or contracts 

The benefits of an independent financial audit for nonprofits:

No other report, review, or statement inspires more confidence than an audit. Which makes it easier for you to attract larger donations, apply for grant funds, and access lending facilities.

Because it’s a universal indicator that your organization takes fiscal responsibility seriously, it’s impact goes beyond fundraising. An audit is also a symbol to the media, volunteers, watchdog groups, and the community you serve. 

Internally, it provides valuable oversight for your bookkeeper or accounting team. And it gives the board and leadership the peace of mind that your books are accurate and reliable. 

All in all, a financial audit helps you hold your organization accountable to your mission, build trust with the outside world, and access money to pursue your goals.

Less expensive alternatives to a nonprofit audit: 

nonprofit_audit_alternatives

Because a nonprofit audit can easily cost $10,000+, not every nonprofit can afford one. 

If you need to build confidence but aren’t ready to invest in an audit, you have two main alternatives: a financial review and a financial compilation.

We’ll look at the differences between your three options here. But the primary difference between a financial review, a financial compilation, and an audit is the level of “assurance” they provide.

What is assurance? 

Assurance is an opinion given by a CPA on the accuracy of an organization’s financial statements. It shows whether or not your accounting records are accurate per generally accepted accounting principles (GAAP), in the auditor’s professional judgment.

An audit provides reasonable assurance, a review offers limited assurance (but not a professional opinion), and a compilation offers zero assurance. 

Nonprofit Audit Alternative #1: Financial Review 

In a Financial Review, an independent auditor reviews your financial statements to determine if they’re consistent with generally accepted accounting principles (GAAP). 

It offers limited assurance that no significant modifications need to be made. While it does evaluate the accuracy of financial records, no professional opinion is given on that accuracy. A financial review typically costs 40-60% less than an audit. 

Despite the lower level of assurance, a financial review may be enough for some grantmakers to approve your organization. Even if a grant asks for audited financials, sometimes that isn’t a deal-breaker if you have a financial review and meet their other criteria.

But without at least a financial review, you’re probably out of luck when it comes to most grants. 

Nonprofit Audit Alternative #2: Financial Compilation 

A compilation simply organizes your financial records for a specific period in a GAAP-acceptable format without evaluating the accuracy of those records.

It’s a cost-effective option for organizations that need a GAAP report. But it offers zero  assurance as to the accuracy of your books. 

A compilation can help your nonprofit identify obvious errors by getting their books into an organized format. It adds primary value and serves owners, board members, creditors, and financial institutions. A compilation is your least expensive and time-consuming option. 

Not sure if you meet the requirements for a nonprofit audit? We can help you figure that out. 

The Charity CFO doesn’t conduct nonprofit audits. But we have 5 former nonprofit auditors on our team, so we know exactly how to prepare your organization to pass your audit the first time.

Even better, with our nonprofit bookkeeping and accounting services, we’ll ensure your books are always audit-ready. Plus, give you timely financial reports and expert advice that help you carry out your mission.

We’ll help clean up your books and implement state-of-the-art systems to save you time and bring your accounting department into the 21st century.

We’re honored that over 120 nonprofits trust us with their bookkeeping and accounting. And we’d be excited to show you how we can help your organization meet your goals.

 

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Nonprofit Fundraising Strategies: Tips for Running an Effective Campaign

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Are you looking to raise more money for your nonprofit and bolster your fundraising strategies?

When you run a nonprofit, knowing how to get money from your supporters should consist of one of your chief goals. Many nonprofits become born out of care for certain needs in the world, yet they can’t exist without a solid marketing plan. You need effective fundraising strategies to get the money you need to continue your initiatives and keep your talent.

So, how do you go about getting the proper funding? We’ll go into nonprofit fundraising strategies below. Keep reading to bring in more money for your cause today!

1. Use a Professional Mass Email Service

You may have a great mission, but you won’t attract many donations if your emails don’t look professional. Even if you run a small nonprofit, professionalism inspires confidence in you and your organization.

In turn, this prompts less hesitation about giving. When people believe you operate in a professional manner, they may trust you with more of their funds.

But how do you ensure your emails maintain a professional appearance? Get a mass email service. These platforms allow you to store your contacts’ information and even provide templates you can edit with your own text. This gives your emails a professional look.

2. Use More Than One Platform

If you just advertise your cause via email, you likely aren’t getting the most money you can. Instead, you should seek to get funds from other platforms as well.

You should start out by having a donation page on your website. Make sure people can navigate to this page from any other page on your site. Your donors should have the ability to find it without much effort.

You can also put donation buttons on each of your blog posts or news updates. This encourages people to give to causes after reading about them.

Some people even advertise their causes on social media. To do this, create posts targeted to raising money for specific causes and include links to donate.

3. Create Nonprofit Fundraising Strategies

You shouldn’t create random fundraising opportunities. Instead, fundraising works best when it gets planned out in detail. As such, you should dedicate much of your marketing endeavors toward creating nonprofit fundraising strategies that work for you.

How do you customize your own strategies? A lot of it involves doing research on how well different types of strategies work with your donor base. Any time you try something new, make sure you look at how well people received your new endeavor by viewing your analytics. The best working attempts will result in more donations, shares, or donor interactions.

Then, once you have an idea of what works well, incorporate it into your fundraising strategy.

4. Plan Out Fundraising Campaigns

Fundraising campaigns should comprise a lot of your fundraising strategy.

But what is a fundraising campaign? Think of them as a multi-component attempt to raise money for a specific cause. Fundraising campaigns harness the power of sending email messages to highlight your mission and the initiatives you want your donor base to give to.

For these, you shouldn’t send out one message. Rather, plan out several that build upon each other and encourage your donors to give.

To get the best results, you should start out with a soft launch of your campaign. These launches target only your committed donors. Ask them for feedback on the campaign and pay attention to the issues they raise. Then, you should implement these changes to your campaign before you send it to the rest of your email list.

You should also create thank you notes to send out to people who donate!

5. Know About Prime Fundraising Seasons

Did you know you can maximize your profits by launching campaigns at certain times of the year?

In particular, people like to give before the end of the year because they can claim their donations on their tax forms. Giving Tuesday kicks off this season. It lands on the Tuesday after Thanksgiving, when people follow Black Friday and Cyber Monday with an opportunity to give. You should always start your end-of-the-year campaign on Giving Tuesday.

Then, send messages throughout the month of December. Finish the campaign with a last chance message toward the end of the month, and then follow up with a thank you statement in January.

You can also run fundraising campaigns around holidays.

6. Use Specific Stories

People connect to stories. A well-told story pulls on the heartstrings of your audience and convinces them that they should spend their money giving to your cause.

The more specific the story, the better. Telling the story of one specific beneficiary of your services shows people the impact a donation to your organization can have. These stories also encourage people to put themselves in someone else’s shoes, encouraging empathy and furthering their dedication to your cause.

7. Get Reviewed by a Nonprofit Financial Organization

People want to make sure their money goes to the cause to which they intended to give. Most nonprofits manage their money well, but some don’t, and so it becomes important to have documentation to show how you spend your donations.

To do this, get reviewed by a nonprofit financial organization. These companies focus on reviewing the finances of nonprofit organizations and making this information public for any potential donors. Then, when potential donors contact you asking how you spend your donations, you can send them to the organization’s website so they can view the information for themselves.

This gives your donors confidence in your ability to handle money well and not use it for purposes other than your cause.

Need Nonprofit Financial Services?

Nonprofit fundraising strategies become the crux of many nonprofit organizations. They enable them to raise money for the different initiatives they run and help them keep their lights on.

But you shouldn’t just fundraise and not manage your money. If you need financial assistance for your nonprofit, we offer a full team of accountants who can help you manage the funds you receive. Request a meeting today!

A Guide to Nonprofit Risk Management and Cybersecurity

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We are living in an age that is characterized by risk. Every decision a company makes needs to take various risk factors into account. If you fail to properly consider risks through a risk assessment and risk management, it could be disastrous for your company.

One area in which non-profit organizations frequently miscalculate risk is cybersecurity. This article explains how you can secure your organization against various cyber threats.

What Is Risk Management?

Essentially, risk management involves trying to foresee what could go wrong for your organization. You then take measures to mitigate the risk. Of course, organizations don’t take measures against every conceivable risk. Instead, they evaluate each risk based on perceived likelihood and expected damage.

For example, consider an event such as a meteor hitting your office. The damage from this kind of event would be catastrophic, but it’s very unlikely that it would ever happen. Therefore, a risk management analysis would conclude that there’s no need to take measures against a meteor strike.

On the other hand, events like a fire happening on the premises are much more likely, and the damage from such an event could be just as severe. Therefore any reasonable risk management strategy would take fire into account.

Risk management looks at both intentional harms caused by malicious actors and accidental harms.

Cyber Risk Management

Some of the biggest risks you’ll face in nonprofit security are cyber threats. These kinds of threats involve harms caused by computers and computer network systems. Most organizations have robust and sensible risk management approaches when it comes to “real life” threats such as fires and earthquakes, but their approach to cyber risks is often lacking.

This is because digital technology has progressed so quickly in the last few decades. Risk management approaches have not had time to catch up. It doesn’t help that many people in management positions are not very knowledgeable about computers and the internet.

Unfortunately, this means that many nonprofit organizations take a reactive rather than a proactive approach to cybersecurity. You can’t afford to take this kind of approach to cybersecurity as threats like data breaches could have a devastating impact on your organization.

Data Security

As a nonprofit organization, one of the biggest cybersecurity threats you face is a breach of your data. Quite often, if data is stolen from your organization, it will mean you’re in violation of data privacy regulation. This could result in fines or other legal action against your organization. It could also have a negative impact on your reputation.

Your risk management strategy should involve reviewing your cybersecurity. This should be on the hardware and software level. For example, all employee workstations should have antivirus and firewall software installed. If you don’t have dedicated IT support staff at your company, you might consider working with a managed IT company.

Two-Factor Authentication

One of the best and most efficient ways to protect yourself against a data breach is to use some form of 2-factor authentication. Basically, this involves using a second device to verify your identity.

The most common form of 2-factor authentication is using a cell phone to verify who someone is who is attempting to log in. This is an effective security measure because it means a hacker who has the password of an employee still won’t be able to log in.

Consider setting up such a system to protect yourself against a data breach.

Consider Social Engineering

One mistake that organizations often make is that they focus all of their risk management on software protection. This is certainly important, but many cyber-attacks involve using social engineering to breach a system.

Social engineering involves using trickery and manipulation in order to breach a system. A firewall or antivirus software won’t be able to protect you against this kind of attack.

An example of a social engineering attack might be an attacker calling up someone at your company. They might then and convince them to give out their password. It might sound implausible, but it’s a lot easier than you might think.

Security Culture

Sadly, there is no straightforward solution for dealing with social engineering attacks. If you want to protect yourself against this kind of risk, you need to create a strong security culture in your organization.

This means that everyone in your organization takes security seriously and knows how to recognize cyber threats. A common way to achieve this is through seminars, presentations, and other activities.

With that said, you can’t just host a seminar on cybersecurity risks and call it a day. Cybersecurity is a constant process. To achieve a true security culture, employees need to have security on their minds at all times.

It helps to have a dedicated member of staff responsible for investigating potential cyber threats. Staff should report and all suspicious activity to this individual. This should be encouraged, even if the majority of reports are false positives.

Consider Shadow Security

Security culture is important, but pushing security too much can actually make your company less rather than more secure. When you implement excessive security policies, this results in what is known as shadow security.

Shadow security is when workers find the official security policy too restrictive. In response to this, they may adopt their own unofficial security methods.

This is problematic because most of your workers are probably not security experts. This means that they may inadvertently do things that could cause a data breach or some other threat.

To avoid this kind of behavior, you need to have an open dialogue with your employees. People may feel like the official policy is interfering with their ability to get work done. you may need to modify the policy to avoid workers taking matters into their own hands.

Risk Management Is Crucial

As you can see, risk management is crucial for running a nonprofit company. You need hardware and software solutions to keep your digital environment safe. You also need to develop a strong security culture in your organization.

If you want to learn more about running a nonprofit organization, check out our FAQs page.

Strategic Planning vs Scenario Planning

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Recognizing potential situations and environments your nonprofit may encounter in the future, and determining how your organization should react, are important towards its long-term success. To build a successful nonprofit, one must learn the importance of nonprofit strategic and scenario planning.

While these two terms sound similar, they are fundamentally different. Quickly, strategic planning typically focuses on identifying and/or describing likely futures, then developing a plan that allows an organization to succeed. Similarly, scenario planning process tends to explore the uncertainty involved in analyzing a long- term future.

But, you shouldn’t just rely on the short paragraph above as your information, or all that you need to know for your nonprofit.

You should rely (and listen) to the latest episode of A Modern Nonprofit Podcast if you want to learn everything you need to know about strategic and scenario planning.

LISTEN TO EMILIE AND TOSHA DISCUSS NONPROFIT STRATEGIC AND SCENARIO PLANNING ON A MODERN NONPROFIT PODCAST HERE! 

On this episode, Dr. Emilie Socash, CEO of Nonprofit Help Center, to talk with Tosha Anderson, founder and CEO of The Charity CFO, to review this important topic. Some questions covered during the episode include:

  • What’s the difference between scenario planning and strategic planning
  • What’s unique about the scenario planning process for nonprofits (vs. for-profits)?
  • What does the scenario planning process look like? Is there just one way to do it? Does it require a specific skill set?
  • Can you give an example of how a nonprofit has effectively used scenario planning?
  • And more!

Make sure to subscribe to A Modern Nonprofit Podcast and share our episode to your nonprofit, professional network to get the word out about the helpful tips and tricks shared during this nonprofit-oriented series!

Dr. Emilie Socash is the CEO of Nonprofit Help Center, and also joins Tosha Anderson on A Modern Nonprofit Podcast!

So, you’ve listened to A Modern Nonprofit Podcast. Now what?

Nonprofit organizations—and the people who lead them—bring unique value to our communities, particularly during times of challenging change. The Nonprofit Help Center delivers a leader-focused suite of services that are grounded in organizational and leadership psychology, delivering transformational and long-lasting change where it’s needed most. Is your organization looking to build itself into an organization that can truly succeed? Become a NHC member today, which includes full access to all live and pre recorded webinars, special member resources, and a discount on coaching!

Visit the Nonprofit Help Center Website to learn more. 

And if you want to build your organization, you need to focus on the work that matters. That means you shouldn’t have to spend your nights and weekends completing financial paperwork, performing bookkeeping tasks or learning nonprofit accounting jargon. You need to outsource your accounting, and ensure you have a team of certified public accountants who actually know nonprofits.

If this sounds like your nonprofit and your own needs, then you should consider us, The Charity CFO. Discover what bookkeeping and accounting services we can provide your organization, then schedule a free consultation with us to start your journey.

 

 

Benefits of Having Nonprofit Accounting Services

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Is your nonprofit organization finding the mountain of accounting paperwork stifling? For a nonprofit organization, accounting can often take a lot of much-needed time away from achieving its mission. If this sounds like you, then you need to know how nonprofit accounting can transform your workflow.

Removing the burden of budgets and preparing reports can give your workforce newfound freedom. Read on for our guide on the benefits of nonprofit accounting services.

Nonprofit Accounting Services Can Monitor Financial Visibility

When managing the finances of a nonprofit, the deficit between transactions and the appearance of money in a ledger can be a long time. While a transaction may happen once or twice in a month, it may take a while for it to register on your books.

Nonprofit accounting services can ensure that transaction entry is entered promptly. Done in real-time, this makes the planning of a budget easier and more transparent.

Security

Security in your accounts, either from external or internal factors, is often overlooked. Malicious attacks and the theft of information are a real threat to any nonprofit, that needs to be taken seriously.

You should already have an IT department, who can monitor your network for suspicious activity. By having a designated accounting service, you also have someone who can make sure financial information is secure. The accountancy team can observe in macro to see if details change or things do not look right.

By having dedicated accounting services, you also limit the number of people on your staff who have access to finances. For most nonprofits, they have a choice to let almost everyone or hardly anyone view their finances. Accounting services can facilitate transparency while also monitoring access.

They Can Track Grants

If you are tracking grants, it can become confusing and messy, particularly if you have applied for multiple ones. They may all be at different stages or require different actions, such as submissions, at various times of the year. You also need to be in regular contact with the grantors, to see where you stand on getting the grant itself.

All of this can lead to financial instability as you wait to hear the news. If you have other jobs to work on, grant tracking can often become lost in the workload.

Specialist nonprofit accounting can track all grants for you. It will use either a designated tracking method for grants via software or have someone to deal with your cases. This will allow prompt communications, applications, and updates.

Up to Date Compliance

Accounting principles for all businesses are set by the Financial Accounting Standards Board. Very often, these can change quickly. If you happen to miss them and account incorrectly, then it can be costly.

Having a dedicated nonprofit accounting team will mean you do not have to check for these updates. As professionals, they will keep abreast of any changes put out by the FASB.

Digital Services

A dedicated team for your finances will have specialist accounting for nonprofit organization software. These will not only track and record finances but track applications and workflows. This can result in the creation of automated processes that make the whole system much easier to use for you and your team.

You will no longer have to rely on reams of paper and receipts. Records can be stored digitally and archived without the need for bulky physical records.

Quick Data Access

Financial updates need to happen on an almost daily basis. It is no longer enough to get a monthly financial report. In a nonprofit organization, where income is not a steady turnover, then a month can be a long time.

To run your organization you need access to accounts quickly. Nonprofit accounting can produce reports that include all the information you need. Budget, expenses, donor reporting, grant reporting, and cash balances can be produced almost instantaneously.

Once you have this, you can make better assessments and decisions on a daily basis. You will be able to make better management choices and inspire confidence in your donors.

Tax Reporting

Tax reporting for nonprofit accounting is complex. This is to ensure non-profits are not acting fraudulently, and that tax exemption applied to nonprofits is not used in an incorrect manner. This makes the whole process, especially for small businesses, hard to complete.

As your accounts will also be in the public domain, it is important that you get this whole process right. Doing it yourself can take a lot of time, and even then you may get it wrong. Nonprofit accounting services will be able to use their experience to get this done quickly and efficiently.

Financial Experience

Your organization may have someone trained in accounting or with some background in it. However, for most small nonprofits this is not the reality. This means inexperienced people are left finding their way with accountancy.

You may also have board members who are well-known professionals. Very often they will have hired accounts to do that aspect of the job for them. Having professional financial accounts can provide them with the level of accuracy they need to make the right decisions.

Getting the Right Service

Now you know the benefits of nonprofit accounting services, you need to locate the correct company. Do not opt for standard accounting services. Nonprofits have a unique specialism and set of rules that require expert assistance and knowledge.

Your first stop should be Charity CFO. We bridge the gap between the accounting you need and the accounting you can afford. Contact us here to discuss specialist accounting services for your nonprofit.

From a Nonprofit CEO: How to Understand Your Financials

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Nonprofit financial statements, reports and jargon are the key to ensuring your organization, or business, can operate at its full strength. Thus, it is important that you can understand financials- which involves reading, creating, editing and analyzing your financial reports.

Financial reports will shine light as to how much money your organization operates with, how much donations you received and how much your staff are making. Understanding these numbers is especially important when tax season rolls around!

To better help nonprofit leaders and CEOs understand their financials, Tosha Anderson of The Charity CFO invited Sara Lahman of Annie Malone Children and Family Services on A Modern Nonprofit Podcast.

Sara Lahman of Annie Malone is this week’s A Modern Nonprofit guest!

Previously an Assistant Vice President of Residential Treatment Services with Great Circle, Sara knows a lot about helping the community. And as the CEO of an organization with a very influential mission, she knows how important nonprofit finances are.

If you want to learn how to understand nonprofit finances to help your nonprofit thrive, then you need to subscribe and listen to the latest A Modern Nonprofit Podcast episode!

LISTEN TO SARA AND TOSHA DISCUSS FINANCIALS ON A MODERN NONPROFIT PODCAST HERE! 

Some of the topics the two discuss include:

  • Differences between being the head of a program vs. head of an entire organization
  • Tips and tricks to understand numbers
  •  The most important thing(s) a nonprofit leader should know about their financials
  • Strategies to improve financial knowledge for beginners
  • And more!

Don’t forget to subscribe to our podcast for future episodes, as there’s tons of more exciting content coming your way!

So, you’ve listened to the most recent episode of A Modern Nonprofit Podcast. Now what?

Everything that Annie Malone does is aimed at ‘Making Lives Better’ for the children and families they serve. As a premier organization that provides a diverse array of services advancing the quality of life for children, families, and communities, Sara Lehman and her team at Annie Malone play a vital role in their community. To learn more about Sara’s organization and to support their mission, make sure to visit their website here. 

For individuals who might have realized you’re in over your head with your nonprofit financials, then you are not alone. Have you considered outsourcing your bookkeeping and accounting? Check out the services and pricing that The Charity CFO has to offer, and get the help you need to ensure your financials are not only up-to-date, but efficient and modernized.

Fortunately, you’re not alone if you are struggling to understand nonprofit financials. That’s why Tosha and her team created A Modern Nonprofit Facebook group, which is filled with insightful comments, posts and discussions from industry leaders. The best part? It’s completely free to join this inclusive community! Learn more and join today using this Facebook link. 

When to Look for Expert Nonprofit Accounting Services

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When you are a nonprofit organization, finding expert nonprofit accounting services may not be high on your to-do list. Surely there are more important things to focus on instead of focusing on accounting, especially because your organization’s goal is not to make more profit?

In reality, nonprofit organizations can benefit a lot from nonprofit accounting. This article will go through the scenarios when you would need to look for expert nonprofit accounting services.

1. You Need to Consider COVID-19 Implications

The pandemic has resulted in a lot of changing regulations and greater overall uncertainty regarding the finances and accounting requirements of a firm. The Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was passed in March 2020, affects nonprofits as well.

For organizations with less than 500 employees, you can have access to small business administration (SBA) loans or loan forgiveness. You can also access emergency economic injury disaster loans (EIDL) grants and employee retention credits.

For larger organizations with more than 500 employees, you can only access employee retention credits and EIDL grants.

The eligibility criteria and the need to report benefits from the CARES Act will mean that you can benefit from having expert accounting services providing you with greater insight. They are a lot more knowledgeable on how the CARES Act will change what you report on your statements, and they will ensure that your financial reports will accurately reflect the adjustments while complying with regulations.

At the same time, other COVID-19 considerations can cause an accounting headache for your nonprofit. For instance, you may experience modifications in the number of liabilities you have or will need some guidance with the ongoing financial concerns of your nonprofit.

The COVID-19 pandemic is an unprecedented situation, and responding to accounting rule changes can be a challenge for everyone. By relying on an accounting service, you can rest well knowing that your audits and bookkeeping are all up to par.

2. You Find it Hard to Manage Cash Flow

Managing cash flow in a nonprofit can be more difficult or unstructured than a typical company. At the same time, it’s an important thing to consider, because you need that money to keep your organization going. You will therefore be able to benefit from nonprofit accounting, which aims to both manage and improve your cash flow.

A common challenge that nonprofits face is that their greatest cash flow only happens in certain seasons or months in a year, which means they will have to allocate this money throughout the less profitable months. By taking the time to properly plan your cash flow and ensure your balances will remain positive, you will need to spend a lot of time evaluating your finances and your budget.

An accounting service can analyze the existing financial information to understand where you get most of your revenues and benefits, and whether this is enough to sustain operations for a certain period of time. They can also pinpoint risk areas, where you may be spending too much or where you may be liable to losing a lot of money.

The information they gather will allow you to make well-informed decisions regarding your cash flow.

3. You Need Better Staffing and Payroll Strategies

Payroll management is a headache for any company, and it is a particularly challenging aspect of running operations for a nonprofit. Nonprofits are usually motivated by passion, so matters of staffing changes or payroll requirements can be a bit awkward to focus on. What happens, for instance, if there are some incredibly loyal staffers who are also becoming financially burdensome?

An accounting service can provide some insight into this area by identifying cost-effective strategies and the financial impact of having a certain amount of staff members. While it may not be the easiest thing to consider, expert accounting services will be able to pinpoint areas where you will have to cut costs to ensure that your organization can succeed in its endeavors.

At the same time, you will benefit from speaking with an accountant before hiring someone new so that you can understand how this will impact your financial position in the long run.

4. You Have Difficulty Tracking Revenues

As a nonprofit organization, the way you receive revenues will be very different from the orthodox method of selling products for profit. Your revenue will come from donations and grants more than anything else. The accounting process will be different for you, but it is just as important so that you can manage cash flow and understand your company’s financial position.

By having nonprofit accounting services helping you out, they will be able to maintain accurate and updated financial records which track all the revenues you receive. This ensures that you have a sound knowledge of how well your company is doing, and also prevents the possibility of you presenting inaccurate data in your financial reports.

Tracking this information will also be important in ensuring you continue receiving grants in the future.

Situations When You Need Nonprofit Accounting Services

As a nonprofit, you can benefit a lot from accessing nonprofit accounting services. Your accounting needs may be unique, and you may not be profit-motivated, but managing your finances is essential to ensure your organization survives.

Nonprofit accounting services can provide assistance if you need help with COVID-19 considerations, if you find it hard to manage cash flow, if you need better staffing strategies or if you have difficulty in tracking your revenues.

Contact us today for expert accounting services for nonprofits.

How Nonprofit Accounting Services Can Help You Succeed

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Did you start your nonprofit because you love number-crunching?

Or was it because you have a passion for helping those in need and serving your community?

Most nonprofit directors wish they could focus on relationships, not finances. However, professional accounting help can seem intimidating at first. How do you know when it’s time to transition to professional accounting?

Are you wondering whether nonprofit accounting services are worth it? If so, this article is for you. Read on to learn how specialized accounting services can help your nonprofit succeed.

Lets You Focus on Your Nonprofit

If you founded or joined a growing nonprofit, there are likely many ways you want to give your time. You’re busy hosting galas, networking with your supporters, and doing charity work.

As your organization grows, its finances grow too. Success makes your nonprofit more complex. That means you’ll need to devote more time to financial administration.

Does the financial work take your attention away from your organization? If so, it may be time to seek professional accounting support.

After all, a professional accountant can look after the books. Only you can lead your nonprofit.

Choose the Services You Need

There are two main types of financial administration. Your organization will need both: bookkeeping and accounting.

As a nonprofit, you may be able to fill one of these roles with volunteers. You may find someone to donate their skill to cover a few of these tasks. Every nonprofit has unique resources, and unique needs as well.

That’s why nonprofit accounting services are flexible. They allow you to decide whether you need to outsource some or all of your financial management. This makes professional accounting more affordable as well.

Bookkeeping Services for Nonprofits

A bookkeeper manages the daily financial interactions of your organization, including:

  • Accepting and recording donations
  • Paying out bills
  • Managing banking deposits
  • Allocating and recording expenses
  • Executing payroll

Many nonprofits manage these tasks in-house. This works well if they don’t overwhelm your time. You may even divide these tasks among your employees for convenience.

However, as your organization grows, your daily financial tasks increase as well. You may find that they put increasing demands on you and your staff’s attention.

Don’t overlook the dangers of assigning bookkeeping to financially untrained staff. Innocent bookkeeping mistakes can reflect badly on your organization.

If your staff is spending its time on financial tasks instead of charitable work, it’s the right time to seek professional accounting services.

Accounting Services for Nonprofits

Accounting involves analyzing your organization’s financial health. It gives an in-depth look at your nonprofit’s transactions and financial history.

CPA services (chartered professional accountants) include:

  • Making sure your expenses and income stay in balance
  • Planning an annual budget
  • Analyzing expenditures
  • Preparing your year-end financial report
  • Evaluating your organization’s overall financial wellbeing

Some of these services can be conducted in-house if you have accounting-trained employees (or volunteers). However, they are time-consuming, especially for non-professionals.

A specialized accountant can administer your accounts faster and more accurately than non-professionals. You will need an independent accountant to perform your mandatory yearly audit (see more below).

Navigate Nonprofit-Specific Issues

Nonprofit organizations have different financial inner workings than businesses. They face unique financial challenges and unique financial requirements as well.

A nonprofit accounting service understands these differences. It can help your organization navigate the special financial requirements you will face.

Nonprofit Audits

Most United States nonprofits are required to have a yearly financial audit. This audit must be conducted by an independent party. Some states require proof of a financial audit before granting registered nonprofit status.

A transparent yearly audit assures donors that your nonprofit is financially responsible. It gives the stamp of integrity to a charity.

However, nonprofit finances are different than for-profit businesses. Their financial audits have to be conducted differently as well. That’s why it’s essential to choose a nonprofit auditor who can analyze your nonprofit finances.

Nonprofit Taxes and Tax Reports

Keeping track of revenue in a nonprofit is always a challenge. Nonprofit revenue streams can include:

  • Personal donations
  • Fundraising drives
  • Honoraria
  • Membership fees
  • Public grants
  • Private foundations
  • Monthly contributions

With such diverse income streams, nonprofits often struggle to account for their income.

Your organization needs to report your income accurately. Otherwise, you could incur penalizations.

You may also need professional help when it comes to registering for your 501(c)(3) tax-exempt status. Professional accounting services can help in both these areas.

Are Nonprofit Accounting Services Worth It?

Nonprofits often start very small. When is the right time to spend money on outsourcing your accounting tasks?

First, think about how much time your staff currently spends on accounting and bookkeeping.

Time is money, even in the nonprofit sphere. If your staff spends excessive time on finances, you are already spending money on accounting.

Second, think about the quality of your financial management. Do-it-yourself solutions may seem attractive in the short term. In the long term, however, inexpert bookkeeping can make your organization seem unprofessional.

Most importantly, consider the quality of your charity work. Is your staff so busy with administrative work that they don’t have time for your mission? When you spread yourself too thin to do your charity work, it’s time to get accounting support.

Accounting Services For Your Nonprofit

Your nonprofit may have started small. However, it may quickly outgrow your financial administration abilities. If your finances need more time than you can give to them, it’s time to get a professional solution.

Is your organization ready for nonprofit accounting services? Contact us today to schedule your free consultation.

Using Nonprofit Accounting Services to Help with Payroll Management

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Having a hard time managing your payroll?

This problem is much more common if you’re a nonprofit organization. Whether you’re a public charity, private foundation, or civic leagues, the special rules on nonprofit payrolls can be taxing. You have varying HR elements, from volunteers and contractors to board members.

However, a simple solution is to hire nonprofit accounting services. Excited to overhaul your payroll management? Read on and learn these impressive facts about outsourcing accounting services:

1. Payroll Services Remedy Mistakes

Mistakes can lead to law-imposed penalties. If you’re losing money because of payroll errors, outsource your accounting services. These professionals are vigilant and can resolve them before they become troublesome.

Nonprofit accountants use automated audit software to verify each payroll. They’re proactive in letting you know when they encounter errors. It paves the way to corrections before processing the payroll.

You’ll get the accuracy nonprofit payroll software offers. These professionals check your work constantly. They help you avoid mistakes while giving you ample opportunities to learn.

Getting help means familiarizing your accounting department with the rules. It prevents complicated situations from happening. It allows you to be more decisive and have more confidence with how to go from there.

You need not take your chances when you have payroll experts. They will address various issues to ensure you’re following the law. You’ll get a provider that caters to your nonprofit accounting needs.

The software these companies use is complex and specialized. It aids with every step of the process when checking for accuracy. It saves lots of time since you need not retype information across reports.

2. Payroll Services Eases the Process

Nonprofit organizations often put too many roles on their HR and accounting departments. If it’s your situation, hiring an accounting company is beneficial. It allows you to focus more on other issues like finding proper connections to grow your donations.

A payroll service offsets the hours spent reviewing and verifying payroll data in-house. It’s more efficient and can eliminate the risks of underpayments and late payments. It simplifies the process for your HR or accounting teams.

It’s also worth noting that the sooner you process payroll, the faster the payments are. It’s an important asset especially when your paid employees have limited budgets. With more steps eliminated, you won’t have to worry about low morale.

3. Payroll Services Enable Paperless Processing

Paperless payroll systems save more money while staying environment-friendly. Whether you’re looking for more efficiency or care about the environment, payroll services fulfill both. An online nonprofit payroll system streamlines the process across various departments and roles.

It also means you’re riding the wave of the future with paperless payroll. With enough expertise, you can collaborate with your accounting service. It helps you shift from paper to mobile payroll apps and document storage online.

You’ll have more functionalities with your payroll system. Employees can look at their payroll data in real-time. Your accounting department can change security levels to keep sensitive data from getting compromised.

4. Payroll Services Enable Real-Time Tracking

Things are easier when everyone gets quick information access. When professionals track your payroll system, you’ll know when problems happen. It means making timely changes to correct these issues.

It allows you to get closer to a hassle-free payroll process. You’ll always be on time, ensuring everyone’s satisfaction. This process becomes even better when using an integrated system.

You’ll always have an idea about the current labor costs situation. It allows your nonprofit to make more financially-sound decisions. It ensures everything is up-to-date and adherent to your cause.

Why Nonprofit Accounting is More Difficult

Without professional help on accounting for nonprofit organizations, you’ll encounter some hardships. The following are unique challenges for nonprofit payroll accounting. Use them to inspire your organization to outsource:

1. Financial Inexperience

Your board members are accomplished professionals. They have lots of useful skill sets that bring benefits to your organization. However, it’s uncommon for them to come from financial backgrounds.

Your organization must have a higher level of financial transparency. It gives your organization the right information for decision-making. Understanding the nonprofit’s financial aspects is necessary to help the board focus on a higher-level view.

Never let financial bookkeeping distract your leadership from the mission. Outsource professionals that specialize in nonprofit organizations. It maximizes your organization’s greatest potential.

2. Donor Expectations

As a nonprofit, your donor expectations are one of your priorities. Entities donate funds because they believe in your cause. Your funds must go to where your donors expect them, like programs that further your mission.

Your organization must do it without overspending. It means smart budgeting on administrations, expenses, and fundraisers. Keep your donors updated on your expenses to help build their trust.

3. Strict Audit Requirements

Nonprofit organizations have stricter audit requirements. People expect your reporting and internal control standards to be better. Most states require audits if you get at least $500,000 in donations.

This standard is necessary because the funding comes from public donations. It means everyone must know where the money goes. Your organization is accountable to use the funds correctly and advance your mission.

4. Public Trust

As said above, your funding comes from various public entities. It places the burden of public trust upon your organization. These people expect you to have an effective and efficient operation.

Often, they hold your organization to higher standards compared to for-profit businesses. Some organizations serve as watchdogs. They track your financial activities to ensure you’re using your funds as intended.

 

The same applies to your payroll management processes. To avoid discrepancies, invest in nonprofit technology. It can help you further your cause, helping you establish your local presence.

Hire Nonprofit Accounting Services Today!

Never let the lack of financial expertise ruin your nonprofit organization. Outsource nonprofit accounting services to take the burden off your shoulders. It allows you to focus on more important matters for the greater good.

Need a hand with accounting? Use our contact form and request a meeting with us today.

A Beginner’s Guide to Nonprofit Budgeting

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Nonprofits are not run to make money. But they do make serious progress.

More than 1.5 million nonprofits are registered with the IRS. They contribute more than one trillion dollars to the economy. One-quarter of American adults volunteer with a nonprofit, helping their community on a number of issues.

You will make a difference as soon as you start a nonprofit. But you can make a real difference if you understand nonprofit budgeting.

However much money you have, you need to know how to allocate it into worthwhile projects. There are a few things you should understand in order to do that. Here is your quick guide.

Distinguish Nonprofit Budgeting From for-Profit Budgeting

You may have experience in budgeting and accounting for for-profit organizations. That will help you when budgeting for a non-profit. But you should know that there are substantial distinctions.

For-profit businesses are accountable to their investors. They have a lot more autonomy accordingly. As long as they are within the bounds of the law, they can take any measures they need to make money.

A nonprofit organization is accountable to anyone who donates to it. They must report how they use their funds, then they must hold to their word.

For-profit organizations distribute their profits to their investors. Nonprofit organizations must reinvest their profits into themselves. They can pay for full-time employees, but all profits must be built for the greater good in some way.

Nonprofits are exempt from paying taxes on their funds. This makes tax forms far easier. But they are liable to payroll taxes, just as for-profit groups are.

Break Down Your Budget Components

Your budget as a whole should allocate resources for all operations. You will make clear how these resources are allocated in several ways.

The nonprofit budget is actually two separate documents. The operating budget shows what the projected revenue of the year will be. It also logs the expenses of the entire organization.

All nonprofit funding streams should be defined. When possible, the budget should list the names of donors. This helps with donor management and transparency.

You should also distinguish your different expenses. You incur both program and overhead costs. List out every cost there is, even small ones.

While the operating budget looks at one year’s financial picture, the capital budget looks long-term. It projects what the future expenses and revenue will be, given the track record of ongoing and multi-year projects. This helps executives strategize.

Every budget component should correspond to a specific activity. If there is an unnecessary cost, it should be cut out. If there are leftover expenses, those should be used in some way.

Conceive the Budget Itself

The process of making the budget should begin early on. The board of directors should discuss, debate, and approve the budget before the start of the fiscal year.

Start by negotiating a timeline with the board. Make sure you have time to write it out, but you should leave enough time for them to discuss it.

Agree on what the budget template should look like. Have the board give you the budgeting resources that you need. This includes money set aside for professionals to look over your work.

Review all relevant financial documents, including last year’s operating budget. If there is any variance between actual revenues and projected ones, understand why that is the case.

Take time to do your research. Talk to the nonprofit’s accountants and external financial advisors.

Develop several drafts of your operating and capital budget documents. Ask other budgeting experts to oversee your work. Take their suggestions and make edits accordingly.

When you have a good final draft, deliver it to the board of directors. If you can sit in on their meetings, do so. Answer their questions and ask new ones about what the future of the company will look like.

Run Budget Reviews

Budget reviews are essential components of a nonprofit’s financial life. Because nonprofits must put all revenues back into the organization, budget reviews are check-ins to ensure that this is being done.

You should conduct a personal review every week. You should check to make sure all financial goals are being met, especially with funding. If your nonprofit is using too much money, it will run into trouble.

You should then conduct a teamwide review every month. All of you should look over the finances for the month.

You should examine the balance between budgeted and real-world expenses. Your team should take note of all discrepancies so future budget components fall in line.

You should also conduct quarterly reviews. This is when you review the entirety of the budget. You can track previous discrepancies and see if they line up with actual revenue streams.

An annual review loops other relevant parties into your nonprofit’s financial picture. You should tell the CEO how the budget stayed on course over the last year.

The two of you can talk about program outcomes. If something did not work, you can cut it or adjust its funding. Use their oversight to adjust the budget for next year.

Know About Nonprofits

Nonprofit budgeting is important to your nonprofit’s financial footprint. Whatever experience you have with for-profit budgeting, put that aside. You need to report how all of your funds are used to support your cause.

When making a budget, be as specific as possible. Distinguish between real and projected expenses and revenues.

Take time drafting out your budget. Set clear terms and expectations with the board of directors. Then run several budget reviews, including an annual one with the CEO.

Get the support you need to make a difference. The Charity CFO offers premium budgeting resources for nonprofits. Contact us today.

What Questions Should Nonprofit Leaders Be Asking?

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“Accounting can get messy. Systematize and document your processes, and delegate to the appropriate roles.”

That was just one of the practical, but necessary, pieces of advice that Tosha Anderson, founder & CEO of The Charity CFO, shared as a guest on the latest episode (No.87) of the Path Podcast.

Hosted by Dr. Patton McDowell, this episode dives into the specifics of nonprofit leadership. Further, individuals in this type of role need a wide range of skills and experiences to be successful.

Discussed in this episode of the Path Podcast

But, no single leader can manage all of the technical aspects of a growing enterprise without help. So, this episode is for any nonprofit leader who is looking to find answers to key questions such as:

  • What important contracts and agreements should you be focused on?
  • Why is it hard for people and your fundraisers to get along?
  • What is the best way to manage the accounting and bookkeeping part of your business?
  • And more!

If you are new in your leadership position, you may not even know where to begin. Fortunately, look no further than this podcast episode to get you started!

Next Steps for Nonprofit Leaders and Listeners

Interested in learning more about Patton and PMA Consulting? Need help identifying your organization’s points of pain? Looking to build a plan to knock them out? Hoping for the resources to help you be at your best? Then you need to check out this Patton’s website. 

Did you realize that your accounting, bookkeeping and financial thought leadership is a point of pain for your nonprofit? Schedule a FREE CONSULTATION with Tosha Anderson and her team here.

Crafting an Online Presence: A Guide to Nonprofit Social Media

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More than 72% of adults in the United States have at least one social media account. These aren’t just people—they’re millions of opportunities for your nonprofit to have an impact on most of the country’s population.

If you’re looking to generate revenue for your nonprofit or spread awareness about a certain issue, you’re in need of nonprofit social media guidance.

We’re here to share exactly how to harness your nonprofit’s ability to make tangible progress using social media.

Nonprofit Social Media: The Basics

Before you even decide which platforms to use, you need to do two things:

  • Decide your goals (revenue, starting conversation, event attendance, sharing information)
  • Identify your audience

While your goals might be a combination of the above, and your audience may have a large demographic or age range, it’s important to strategize your social media before diving right in.

Below are a few categories your posts should fall into.

Hot tip: create a content schedule that posts different pieces of content. For example, you don’t want seven days in a row of community building posts. Mix it up by integrating informational posts, too!

Promoting Awareness

At the core of each nonprofit’s mission is education. Without sharing crucial information about the issue you’re combatting, your audience won’t see the value in the work you’re doing.

To get your audience engaged in the purpose of your organization, use statistics and infographics on Twitter or Instagram.

Build Community

Another way to generate a following on social media for nonprofits is to build a virtual community. Your followers want to feel like they’re a part of your movement, so let them in!

Do this by hosting live Q&As on Instagram or virtual forum meetings. Ask your followers to comment with a friend’s name or share their posts for more engagement.

LinkedIn is a great place to cultivate social networking for nonprofits, too, so try posting information there to gain a professional following. The cost of social network marketing is really just your time, so take a leap!

55% of the users who follow nonprofits on social media take action to benefit that organization. Considering some people use social media infrequently or just to share personal information, that’s a pretty great conversion rate!

Share Impact

Lastly, your followers want to know how your work is going. Be transparent and share statistics or stories with them!

Tell them how their donations are making your work possible. People respond well to stories, so get creative in how you share the information. Maybe have a volunteer of your organization or youth participant in your programming share the news!

Ideas for Nonprofit Social Media

Now that you have a sense of your goals and your audience, it’s time to get to it! Here are the top ideas for engaging social media posts that will get your nonprofit some well-deserved attention and donations.

 

Add Donation Buttons

Especially on Facebook and Instagram, it’s important to make it easy for your followers to donate to your nonprofit. Use Facebook’s charitable giving platform to show that you’re open to donations and encourage users to fundraise for you if they’re able.

Use Hashtags

Hashtags are the best way to get an organic following on social media, no matter the platform. Hashtags are like coding your content to get to the right people.

For example, if you’re sharing something for Giving Tuesday, use the #givingtuesday hashtag to show up in the feed. For more niche topics, use specific hashtags to get recognized, like #artmuseum, #omahaarts, or #donatenow.

Share Videos

If the rise of TikTok taught us anything, it’s that people love short-form videos. Some nonprofits have been taking advantage of this, and TikTok has even responded by adding certain features to support nonprofit fundraising.

Even if you’re not on TikTok, your nonprofit can still make short-form videos to educate the public on your mission.

For example, a museum can make a short video going through an exhibition or touring the building. A nonprofit focused on poverty alleviation can share statistics and footage from donation events or services they offer the community.

There are endless opportunities!

Develop a Style Guide

Using social media solidifies your brand. To build trust among your followers and any new communities, you have to have consistency across the board.

Even if you only have a couple of people managing your social media, develop a style guide with all the information someone new would need to create your content.

This could have a list of your researched hashtags, approved colors, and graphics, or resources for posting techniques. This will ensure that your voice and branding is cohesive for your followers.

Pro tip: Use a free design platform like Canva to keep everything branded and stored!

Use Stories

While many people enjoy perfectly curated content, it’s important to shake it up a bit by using stories on Twitter, Facebook, or Instagram.

Use stories to show the day in the life of an employee or use engaging stickers like polls. This allows you to learn more about your audience and create fun content!

Keep up With the Times

Even if you use a content calendar to schedule content ahead of time, make sure that you’re keeping up with your platforms in between. Like, comment, and engage with other content and accounts you follow.

This helps the algorithms in these platforms see you as a contributor to the platform in multiple ways, instead of just posting.

As the events of 2020 and early 2021 have proven, it’s crucial that you keep up with what’s happening in the world. You don’t want your content to seem insensitive, so make sure your calendar is easy to adjust and that you’re flexible in what you post.

Going All-In on Social Media

If your nonprofit social media is ready to take off, congratulations! Using social media to get people interested in your work and cultivate new donors is a huge step towards furthering your mission as an organization.

When you’re ready, use these nonprofit social media marketing tips to gain new followers and keep them inspired by your work.

If you’re looking for more information on how to make your nonprofit successful, check out the rest of our blog.

We help nonprofits strategize their operations and services to be as efficient as possible. Check out our services and contact us for more information!

How to Create Value-Driving Reporting Metrics

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There are around 1 million nonprofits in the United States. Many of them struggle creating value-driving metrics.

The vast number of nonprofits shows how difficult it may be to find funding if you are considering a nonprofit. You may realize that in order to succeed as a nonprofit, you need to find resources and people who are interested in contributing to your cause.

Another study stated that around 30% of nonprofits failed after 10 years. With such a high risk of failure, it’s important for nonprofits to figure out how to be successful.

Part of nonprofit success is dependent on reporting metrics. Value-driven metrics are what current and potential funders might be interested in when looking to fund your nonprofit.

Here are some key reporting metrics you need to keep an eye out for if you want to attract funders. Ultimately, this is how you create value-driven reporting metrics.

Return on Investment: Creating Value-Driven Metrics

One of the most critical reporting metrics is the return on investments. This is your ROI and how much you are making from your nonprofit.

It’s one of the metrics you can look at and decide how successful it is and if it’s getting the funding it needs to make a difference.

This is where you compare the cost of raising the event and paying for catering and a place to host the event and then compare it to how much was actually raised. You may have broken even, made a profit, or had a loss.

If you want to calculate your ROI for a nonprofit, you would want to divide total costs by total funds raised. This gives you an idea of how much is making from your nonprofit.

It can also give your investors or funders an idea if your nonprofit is successful and attracting interest.

Average Gift Price: Creating Value-Driven Metrics

Another metric to look at is how much a gift is when someone donates to a nonprofit. You want to see how much each gift on average is worth, which gives you an idea of how much people are giving to your nonprofit.

Metrics are important to help guide your nonprofit and your bookkeeping.

You can also see how many gifts in a specific time frame. You may know the average price per gift, but you still need to know how often you are receiving these gifts.

You can also see how many gifts you are receiving from specific donors. This allows you to segment your donors and see what donors in a specific market donate to your nonprofit.

Conversion Rate: Creating Value-Driven Metrics

The conversion rate is how many people actually gave your cause based on how many you asked.

You want to see how many of your target markets is giving to your nonprofit if you asked them over email or set up a link online.

Another way to look at the conversion rate is to see how many people are giving based on your outreach. You want to see how many people are donating on social media, email, websites, referrals, and more.

You can see how many people actually clicked on your link and committed to donating to your cause. You can then measure your conversion rate and compare it to other nonprofit organizations.

Another valuable way to look at the conversion rate is to see what channels provide you the most donors. If you discover that some channels provide more contributors to your nonprofit, it may be best to focus more on your content and marketing on fewer channels that are more successful.

Website Visits: Creating Value-Driven Metrics

If your nonprofit has a website where people can choose to visit and donate, you need to make sure you have Google Analytics are some other measuring tool to see what’s happening on your website.

Funders who are evaluating your nonprofit may look at website visits and see how many people you are attracting to your nonprofit. They will want to see how many clicks you are generating and how many pageviews there are. 

These metrics are important because you want to see if people are engaged with your mission and what you are trying to do in your nonprofit. The better your website is designed and the easier it is to use, the more likely people will hang around longer on your website.

You’ll also want to see if people are specifically clicking on your call to action. Also, you will want to see if they are donating to your cause. This will provide insight on if you need to change the call to action or there’s a general lack of interest in your nonprofit.

Email Marketing Metrics

The final value-driven metric you need in your nonprofit that can give you insight on how to improve any part of your nonprofit is email metrics.

If you have an email list and send emails asking people to donate to your nonprofit, you need to look at the open rate, the click-through rate, and how much you are earning per email.

You want to see if your subscribers are donating based on the emails you are sending. These metrics can give you insight into if you need to make any changes with your emails regarding a subject line or body content.

Now You Know Everything About Reporting Metrics for Nonprofits

Value-driven reporting metrics are a great way to analyze the success of your nonprofit. It can help you determine what changes need to be done. This way, you can attract more investors.

While these metrics can be overwhelming, learning can help you increase funding. You will be able to optimize ways to ensure the success of your nonprofit.

If you want help with your nonprofit, you can contact us here.

How to Create a Business Plan For Nonprofits

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Is it time to create a business plan for your nonprofit?

If so, you need to consider what your service is. You also need to consider what your goal is for your business.

When it comes to creating a nonprofit, you still need a business plan. You need something that is going to guide your nonprofit. You need something that is going to tell you what your goals are, what marketing strategies you need, who your target audience is, how to file taxes, and more.

A business plan for a nonprofit is absolutely essential because it will tell you how to start and succeed in your organization. It means you have a plan to help people.

Creating a business plan for your nonprofit is easy if you follow these steps!

However, in order to be a successful nonprofit, you need to know everything that goes into a business plan.

Here’s a guide on the specifics on how to create a business plan for a nonprofit.

Creating a Business Plan, but Research First

The first part of starting any business is doing your research. Part of your research is figuring out what kind of nonprofit you are going to be.

 

You’ll need to create a mission statement and figure out your nonprofit is going to be unique from others.

Along with your research, you should fill out nonprofit tax forms. You need to figure out how to file for tax-exempt status since you are operating as a nonprofit.

Another part of your research is seeing if you need limited liability protection. If you are a director or operator for a nonprofit, you don’t want to be liable for any debt accumulated by your nonprofit organization.

Your Executive Summary

Another part of a business plan is the executive summary. This is exactly what it sounds like, a summary of your entire business plan.

It’s what your nonprofit will be made up of. Your executive summary should include a mission statement, what your goals are, what your past history is, and what makes your nonprofit different from others.

It’s a full overview of everything you plan to do in your nonprofit.

What Your Program Is About

A business plan can also share what your beliefs are, specifically what your mission statement is.

It’s what makes you distinguished in your nonprofit. You are figuring out what you are working towards as an organization, what you are trying to help out in.

When you figure out what your purpose is as a nonprofit organization, it can help you clarify it in your business strategy. Your business plan discusses the ways you will promote and grow your nonprofit.

It should be a detailed plan on how you plan to help those in need, the community, or whatever your program is going to be doing.

Your Marketing Strategy

Another part of your business plan is your marketing strategy. This is how you plan to reach your target market and promote your nonprofit so you can find donors.

Your marketing strategy should be a detailed plan on how you plan to find and ask donors for funding.

When you create a marketing strategy that you have in your business plan, you need to make sure it’s very concise. For example, you want to make sure you know everything about your donors.

You want to know how you are going to target them on social media and why your posts should be relevant to them. You should also consider having a detailed email marketing strategy. When you do send out emails, you want to make sure that it resonates with your target market.

Finally, you need to consider if your website is up to date and is producing clicks and conversions. These are all elements you need to have in your business plan.

Financial Plan

Another critical part of a business plan for nonprofits is a financial plan. You want to makes sure that you know how much funding you need to make a profit.

You also need to know how much funding is required to get your nonprofit off the ground. This is where you may need to hire an accountant or someone who works with nonprofits on a financial plan.

A financial plan is important because it’s what makes or breaks your nonprofit. If you don’t receive enough funding, you don’t have enough to create fundraisers or events. You need a financial plan that is detailed and going to guide you when you figure out how much to spend on marketing, your employees, and creating events.

Your Organization Team

The final part of your business plan is your organization team. You want your plan to include who you are going to hire to help you with your nonprofit.

You may need employees for events, a marketing coordinator, an accountant, and other staff to help make your nonprofit successful.

You want to make sure you know who you are going to hire because it helps you stay on budget. You also know what roles are needed that are crucial to any nonprofit and the many functions there are in a nonprofit.

Now You Know Everything About Creating a Business Plan for a Nonprofit

Creating a business plan for a nonprofit is a lot of work, but it’s ultimately worth it. If you don’t create a plan and just want to wing it, there’s a much higher risk of failure.

With this guide, you now have a better idea of what it takes to create a business plan. You have an idea of what you need to get your nonprofit off the ground and give it the highest chance of success.

If you need help with your nonprofit business strategy, you can contact us here.

The Complete Guide to Nonprofit Startup Funding

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We have created a complete guide to nonprofit startup funding. The guide is for both those looking for seed money to start a nonprofit and existing organizations that need additional funding. The topic is overwhelming to many,  but considering the best nonprofit startup funding strategies is important.

Your dream can become a reality.

Funding is a key step for any charity, but this does not happen overnight. This blog will help you learn how to raise funds for your nonprofit so you can help your organization grow.

4 Types of Funding 

We’ve covered four broad types of initial funding (or for existing nonprofits)

1. Start With Your Community for Nonprofit Startup Funding

What do nonprofits do? Nonprofits serve their communities. If you are looking for funding options, start in your community. Work colleagues, friends, and neighbors might see the potential benefits your startup could bring. Don’t be afraid to post calls for help on your social media, too!

Businesses or Community Leaders

Established businesses have cash to spare if they believe your idea can bring something positive to society and be profitable. Also, community leaders tend to be well-connected. They could assist you in reaching out to other people who will likely be interested.

You can present your startup to these leaders and ask them to become board members. This way, they can represent more active stakeholders in your organization. This action will also increase your access to individual donations. Residents are likely to trust these leaders, so they might donate more.

Other Organizations

You can also contact other organizations who provide similar services, or who would be interested in the benefit your startup will bring. For example, churches are likely to find interest in funding food relief centers or homeless shelters. Food providers might also potentially willing to donate some of their own stock to supply your nonprofit. It never hurts to ask.

Friends and Family

You may find it awkward to approach your loved ones for money. But, reaching out to them will give you a good starting ground. They are more likely to understand how passionate you are about the organization. They might be willing to share a stake in the success of your creation. Even if they don’t, they will be more open to sharing your initiative with their circle of friends, thus expanding your reach.

2. Access Grants for Nonprofit Startup Funding

As a nonprofit, you cannot finance your startup in a traditional way. You don’t get to sell items and use the additional money to uphold your organization, so accessing nonprofit grants is a great way for your startup to flourish. However, nonprofit startup grants are a possible option.

What exactly are nonprofit grants, and what do they do?

Nonprofit startup funding is important for your charity.

Well, when it comes to grants, the earlier you receive them, the better. Instead of waiting until you’ve officially started your organization to begin applying, make sure you have a plan. Start reaching out before your organization becomes fully operational because this will prevent future instability. It will also enable the eventual success of your nonprofit.

Here are two prominent types of grants:

Government Grants

There are many government grants out there. This fact will benefit you because there’s no end to the applications you can send out to finance your startup. That being said, make sure to go through the different grants and see which ones will suit your organization the most. To have a better understanding of available grants, you can look through grants.gov.

There are differences between federal grants and state grants. So, make sure to research the ones that are applicable in your area. Keep in mind that there are requirements to meet and contracts to negotiate. You should expect some initial hurdles!

Foundation Grants

Private foundations also provide nonprofit startup grant funds. It may be difficult to know where to begin, but focus on your state and start researching the available private grants in the area.

You may also need to approach the foundation and give them details about what you plan to do with your nonprofit. This will include your projected budget and the specifics of your business plan. If all seems to be suitable, they’ll happily finance your organization.

Note: Business grants are a possible fundraising strategy. Many for-profit businesses create corporate programs, grant options, or scholarships, available to nonprofit organizations. A different type of corporate funding, if you will.

3. Individual Donations for Nonprofit Startup Funding

Did you know that several nonprofits exist by relying on individual contributions from the public? For example, individual donations are the major driving force for the World Wildlife Fund.

To access public donations, set up fundraisers or auctions. Don’t be afraid to get creative. That’s what will draw people in. Fundraising is also a great way to tell people what your nonprofit is all about. This could improve the chances of more donations or public support. Events like bake sales to full-on carnivals, in a post-COVID world, would be useful.

4. Offering Memberships

Providing membership options is a suitable method to earn a fixed amount regularly. People who sign up will contribute to your nonprofit on a recurring basis. You won’t have to worry about finances drying up.

Offering memberships do not apply to all forms of startups. If you have an idea about what to provide to your members- for example, exclusive access to events or information — then this may be a viable funding option.

Tips for Finding Funding Sources

There are several ways to show your organization is ready for funds, improving your chances to bring in more (and do more for your cause).

  • Compile relevant programs: Doing the research work of gathering all relevant programs (nonprofit grant programs, for example) helps determine the possibilities.
  • Clearly convey your nonprofit projects: Whether it’s through memberships, individual donations, grants, or other funding methods those giving will want to know about your track record and how the fund will be used.
  • Show transparency: Keeping accurate track of how dollars and donations are utilized gives people a sense of trust. Accurate financial record-keeping also mitigates issues with governance. Working with a qualified team, experienced in nonprofits, helps immensely.

Nonprofit Startup Funding Can Be Easy

It may seem scary at first. But, you have many options to access nonprofit startup funding. From grants to memberships, you will benefit from researching. You will also benefit if you try out as many options as possible.

Why should you believe in your dreams? If you are compelled to start a nonprofit, use this as your selling point. Helping your community is a great mission to guide your organization. There will always be others who see the potential in your charitable acts.

For more nonprofit help and outsourced bookkeeping assistance, check out our services. This is also a very popular topic in a Modern Nonprofit Facebook Group, which you can join TODAY.

Create a Nonprofit Operating Budget

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Are you looking for new ways to keep up with the hustle and bustle of your nonprofit organization? Have you noticed that the bookkeeping is starting to slip by the wayside? If so, then you need to create a nonprofit operating budget and learn how to manage it effectively.

Doing so can help ensure that you’re staying on task. you’ll find yourself with more financial peace of mind after knowing that there’s a specific purpose for every dollar you raise.

See below for an in-depth guide on how to create a nonprofit operating budget to get yourself back on track. Be sure to consider everything that’s listed.

1. Set Aside Time with Your Team to Manage your Budget. 

Perhaps this is the first time that your organization will be addressing the budgetary needs that you have. Maybe it’s been so long since you kept a budget that you need to reassess where you are currently.

No matter the case, it’s important that you set aside time to hash out a new budget with your team. Find a time period where at least one person from each department can offer their input.

For example, if you have an in-house marketing coordinator, be sure to clue them in on your new budget to ensure your marketing needs are being met.

You’ll find that a great deal of this meeting will be compromised. Don’t get discouraged if it feels like you can’t get anywhere at first. It’s all about compromise. Every department will feel like their side of the operations deserves a higher portion of the budget.

If you need assistance with building your budget, then you can also decide to outsource it to a nonprofit accounting and bookkeeping service. If you need help creating a nonprofit operating budget, The Charity CFO is an expert accountant for charities. 

2. Gather Data

You might be wondering to yourself “where am I supposed to come up with the numbers? How would I know how much to budget for marketing, events, fundraising, and so on?”. By looking at the previous data.

They say business is all about learning from the past; building a nonprofit operations budget is no exception.

 

How do you create a nonprofit operating budget? The Charity CFO explains.

Gather up all your bank statements from the checking account you use for your nonprofit’s finances. This might be overwhelming at first, but take a deep breath and give yourself a few weeks/months to comprise all the data (if necessary).

Decide which expenses fall under the umbrella of the different departments of your business, then add them up on a month by month basis. Did you spend more than you raised in previous months? Are you overspending in one area of your organization?

If need be, sit down with each department chair individually to assess the money you spent and the areas in which you could cut costs. This will give you a better idea of the amount you can set for that department’s monthly budget.

Be sure to get input from your board. This budget is a collaborative effort. Accounting for nonprofit organizations can be tricky, so we encourage you to utilize the resources and information we offer! 

3. Plan Your Activities

Nonprofits are all about the activities and events that you both attend and organize for your faithful following. It can lead to some tremendous fundraising opportunities.

However, too many nonprofits design their budget without considering those activities first and foremost. They’re then thrown out of whack when they can’t find the financial room to either attend the event or put on an activity that represents their brand in the right light.

Start by scheduling your activities as far out as possible (preferably a year out). How much money needs to be allocated to those activities? Which ones take priority?

As much as it might hurt, this is a great opportunity to cleanse your schedule of any activities that you aren’t seeing great returns from.

4. Properly Estimate Income

Planning income and expenses for a nonprofit can be challenging, but it isn’t impossible.

First, be sure to list your estimated income if different tiers of risk. This should be prioritized from “least trustworthy” to “most risky”.

For example, say you organize 4 groups for your income sources: group 1, group 2, group 3, and group 4. You might decide that people listed in group 1 are “most trustworthy”, meaning they’re most likely to donate generously and often.

Let the data guide you while you estimate this part of the budget. Put your most frequent sources of funding into group 1, the least frequent in group 4, and so on.

5. Put a Job to Every Dollar

Disclaimer: the job of your budget isn’t to primarily track the money that you spend. It’s to assign a job to every dollar that you raise for your cause.

For example, (for the sake of simple math), say that you budget to receive $1,000 in funds for this upcoming month.

You might consider putting $200 towards donations, $500 towards operations for the month, $200 towards activities and events, then have $100 leftover. This is the wrong way to do it.

You need to budget for all $1,000 in funds that you receive, down to the very last penny. If things change (which they often do), then your budget can be adjusted. Your ability to create a nonprofit operating budget also involves some critical thinking!

What You Can Do Today

Now that you have seen several effective steps that you need to take when building a nonprofit operating budget, it’s time for you to do so the right way.

Be sure to read this article to learn more about how to raise money with virtual events for your nonprofit organization.

And for more inquiries on our ability to be an expert accountant for nonprofits, be sure to reach out by requesting a meeting and we will be happy to discuss our bookkeeping services.

The Importance of #GivingTuesday in 2020

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Despite the cold temperatures, themes during the winter months are warm and optimistic. For example:

  • Thanksgiving: A holiday focusing on gratitude and appreciating what one has.
  • Christmas: A time spent feeling grateful for being with and giving to others.
  • Giving Tuesday: wait, you might ask, what is that?

It’s completely okay if you don’t know the specifics, or haven’t heard of, Giving Tuesday!

Giving Tuesday is a “global generosity movement unleashing the power of people and organizations to transform their communities and the world,” according to its website. And everyone can get involved! If that’s by donating to a charity, volunteering for a nonprofit, or performing random acts of kindness, you can do good this year.

Giving Tuesday is very important for nonprofits because it is a time for charitable donations and significant contributions from the greater public. We at The Charity CFO are proud to work with hundreds of nonprofits every day, and you can view our scope of work on our website here.

This Giving Tuesday, give if you can to the organizations that help make our communities great. With the COVID-19 pandemic, there has been no greater need for nonprofits to continue to help those who may be struggling.

Is your nonprofit hoping to find financial balance after Giving Tuesday? Schedule a time to talk with The Charity CFO and book a FREE STRATEGY SESSION here.

How to Hire a Freelancer as a Non-Profit

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Are you looking to hire a freelancer as a non-profit?

If so, you probably have a lot of questions. You want to hire someone who will be a good fit for your business and produce high-quality work.

Indeed, there are many qualified freelancers out there. But there are also those who won’t be as great a fit for your company.

How do you tell the difference? We’ll go into some tips below.

Keep reading to learn more!

Why Hire a Freelancer?

If you’re a non-profit, you know the struggle of trying to decide when to hire a full-time member of staff.

The advantages of hiring a freelancer are well documented. It could help you save money, reduce your risk, and access specialized talent and skill sets that you wouldn’t be able to afford otherwise.

After all, you want as much money as possible to be able to go to your cause. In addition, most donors don’t give to your office administration fund. This often doesn’t leave you with endless funds to add people to your payroll.

Yet, you still need to get the work done. If it’s not something you can do yourself, you might find yourself at a bit of a loss.

This is when you should hire a freelancer.

What Are Freelancers?

Freelancers use their professional expertise to help a variety of clients.

Yet, instead of working for a company, they work for themselves, setting their own hours and prices.

This can have a variety of advantages. For one, freelancers offer you the flexibility to only pay for the services you need, when you need them. Frequently, freelancers and companies develop long-term working relationships.

Yet, you are under no obligation to use a freelancer more than once. This means you don’t have to keep them on your regular payroll when you’re finished using their services.

Are There Any Cons to Hiring a Freelancer?

For all of the positives there are to working with a freelancer, quite a few negatives also exist.

Chiefly, these pertain to variances in professional experience. These days, anyone can create a profile on places like Upwork or ProBlogger and market themselves as a freelancer.

So, how do you ensure you’re finding a true professional who will work well with your company?

Follow the steps below for a better freelancer hiring experience!

1. Identify Your Needs

A successful hiring process always begins with you.

Before you start searching for freelancers, identify what type of work you need done. There are many different types of freelancers, and you don’t want to hire a freelance social media manager when you really need a freelance writer.

Be as specific as possible, outlining the length and any other pertinent details.

Work out a budget as well. Do some research into what the average freelancer charges for this service and make sure you can afford it.

Compile all of these aspects into a list and allow anyone who will be over the freelancer or their project to contribute to it. The clearer you can be with yourself and your team, the higher the chances of hiring well.

2. Create a Job Ad

Using the information you just gathered, write a compelling job ad.

In order to attract freelancers, tell them as much information about the project as possible. For instance, if you want to hire a WordPress freelancer to help you with your website, emphasize how they’ll play a crucial role in your web development.

Then, inform them of any benefits they may receive, including what you’re willing to pay or the possibility for continued work. If you’re willing to discuss pay with them, take note of that as well.

Last, if your project is urgent, write that in as well. This will let the freelancer know that they should have a decent chunk of time in their schedule if they plan on working for you.

Require your applicants to send you their resumes and references. That way, you can see their professional experience and ask previous clients if they were satisfied with their work.

After you’ve finished creating your job ad, post it on a job site! Freelancers often visit certain sites, such as Fiverr, Upwork, and ProBlogger, to look for jobs, so make sure yours is there!

3. Search Freelancer Websites

As mentioned above, many freelancers go on freelancer job boards quite often.

Did you know that many of them also have profiles on these sites?

Usually, these profiles contain information on the types of work they do, how to contact them, as well as client reviews. If you’re looking for a specific type of freelancer, simply go on one of these sites and search for a particular service.

This should pull up a list of top-rated workers. Peruse through their profiles until you find a person you believe would be a great match. Then, reach out to them and pitch your project.

4. Pay Them for a Test Service

Do you have a specific freelancer in mind but don’t know whether or not they’d be right for you?

Offer to pay them for a test service. This test can be anything you’d like it to be as long as it showcases the skills necessary to complete your project. To save yourself money, make it shorter than your actual work order.

Once they return the test to you, evaluate it and see what you think of their work.

5. Ask to See a Portfolio

Most freelancers keep portfolios of their work to show potential clients.

Before hiring someone, ask to see their portfolio or other examples of their finished past work. This will give you an idea of what this person sees as a professional level of quality.

Want to Take Control of the Money You’re Spending?

If you decide to hire a freelancer, you are making a very good financial choice for your non-profit.

After all, freelancers often get the work done without giving you the additional burden of putting a full-time staffer on your payroll. They also often provide professional-level experience for a lower price.

Want to better manage your non-profit’s finances? See how we can help!