Good financial health is the cornerstone of a sustainable nonprofit. As nonprofit leaders, we all know the importance of financial management, but budgets and audits still give us the worst headaches. How can we build up our financial management muscles and confidence? On today’s episode, Betty Ferreira, founder of GoodCasting and who has trained and coached many nonprofit leaders on financial management, shares with us how we can figure out our organization’s finances without headaches and tears.
Myths Betty wants us to leave behind
- You have to be good at math to manage your finances. Managing finance doesn’t necessarily require you to be good at math. A lot of it is exercising your logical thinking muscles.
- You have to have all the answers whenever you’re talking about finance with your board. Don’t aim for perfection. Aiming for perfection will trap you into the habit of avoiding talking about your organization’s finance with your board of directors. No one has all the answers. Work with your board together on figuring out your finances.
Betty’s tips for figuring out your finances
- Know that you can transform your organization’s business model and financial structure. Many inherit the business model and financial structure from their predecessors and assume that they can’t change them. You can (and in some cases, should) absolutely make changes to the financial structure to suit the changing needs of the organization.
- Have a thorough and transparent discussion about finance with your board. It’s tempting to provide the minimum and most succinct version of your financial statements to your board. But in order for them to do their job of providing financial oversight, you should present them more comprehensive information including the financial position statement of your organization. Expect that this process will take time and effort in going back and forth with your board.
Favourite quotes from this episode
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“Doing the math and sorting out your finance is connected to social justice — they’re about your organization’s resilience and impact.”
“For both fundraising and finance management, don’t wait for the crisis to build the competencies.”
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Resources from this Episode
