Here are 5 reasons why the quality of your nonprofit accounting software’s financial reporting is critical to your mission, ensuring resources are not wasted:
1. It’s Still Best Practice
Good financial reporting is still a best practice and a key expectation of both large funders and small donors alike. It bears noting that donors are increasingly sophisticated about your financials. They know how to find your 990s, examine your costs of fund raising, take a look at your balance sheet and net revenues. They expect you to follow best practices in this area. If you don’t have solid, dependable reporting and current numbers both funders and donors will question your ability to manage your organization well, and to use their investment in you (their donation) to the best mission outcome possible. Remember, donors have tons of choices of great missions to fund. Why would they invest in a weak, poorly run organization? (More online)
2. The Board Is More Deliberate Than Ever
Your board members are the fiduciaries of your nonprofit and are responsible if things go off the rails. Having good financial reporting that they can both depend on and access quickly is crucial.
Congratulations! If you’re reading this and you work or volunteer for a nonprofit, your organization is still here. Tens of thousands of nonprofits in the US and Canada went under during the 2008-2010 recession and its still lingering aftermath and, apparently, yours was not among them so, again, congratulations!
All that celebrating aside, many nonprofits came through the recession having learned a very valuable lesson; recessions are brutal on weak organizations, for-profit and nonprofit. The nonprofits that went into the recession with adequate cash reserves, good financial management, a business model that worked for their mission and their community, a good check and balance between board and staff, well trained employees and volunteers; those nonprofits, by in large, not only survived the test, but prospered as other nonprofits foundered. I hope your organization was one of those.
Other nonprofits that went into the recession less strong adapted well; they came through the crisis remade, with new business plans, improved staffing and volunteering models and better marketing; in short, they became better mission-based businesses.