The Basics Of Financial Management — Knowhow Nonprofit (2)

Finance ManagementYou’re certainly not alone – and this site is starting to try and sort out what are the free and paid options and how they compare. Multiyear professional and organizational support — combined with funding to purchase new financial software and to defray some of the cost of staff time — helped organizations achieve long-lasting change. Two years of involvement by expert financial management consultants enabled organizations to diagnose areas of need, develop work plans with ranked priorities, train staff members in good financial management practices, and implement their work plans.

The unrestricted grants from the Wallace Foundation — $115,000 for customized learning organizations and $65,000 for the group learning organizations — enabled organizations to make the investments required to improve their financial management. When CEOs reported at the beginning of the initiative that they were strongly motivated to participate in SFM because it aligned with their organizations’ needs and plans, their organizations made significant progress in all aspects of financial management. The reverse was true for organizations where strengthening financial management had not previously been part of their plans.Finance Management

Encouragingly, the initiative demonstrated that with a concerted effort it is possible to achieve significant and lasting improvements in financial management. Together with improvements in funding practices, these have the potential to strengthen program quality by permitting organizations to focus on programs instead of managing financial crises. Widespread weaknesses in organizations’ financial management can have negative effects on their stability, planning, and programs.

Good financial management is an important factor in facilitating and sustaining long-term improvements in program quality. Opaque budgeting practices that did not include program managers left program staff members ignorant of their budgets, leading to over- or underspending. Organizations that did not understand how to allocate overhead costs accurately across programs faced budget shortfalls that affected program stability. This initiative suggests that efforts to create change in financial management can be effective in achieving lasting organizational improvements.

Improved program quality is not guaranteed when financial practices are strong, since high-quality programs require other important forms of support, such as good planning, reliance on evidence, high-quality program staff members, high-quality staff training, and activities that engage participants. Another consultation appointment you can make is financial management counselling.

Finance Management