[PREFACE: This blog article was started pre-coronavirus pandemic. That’s why the first sentence doesn’t start, “During these difficult times,” and the context doesn’t talk about COVID-19 throughout. However, it’s important to note that building a financially sustainable nonprofit is your best shot to keep services running during tough economic times such as these. So, let’s get to work.]
In the nonprofit world, nirvana is achieved through financial sustainability. We’re talking about a level of sustainability that most organizations only dream about: fully funded operating reserves, available lines of credit, multiple revenue streams, and a full understanding of when the money flows in, how to leverage it, make it grow, and how it is best spent.
Financial sustainability creates its own beautiful cycle. It breeds proactive leadership, strategic direction, and organization growth. Why? Because social impact leaders with a comprehensive understanding of their financial operations can confidently communicate, empower and build trust with their stakeholders. And, trust leads to increased financial support. [6 Step Guide to Build Donor Trust]
This high-performing type of organization is 100% possible! We know because we’ve seen countless organizations transform, including many of our clients.
So, where does a nonprofit start?
Here’s a model of the 4-part system that our CEO, Chantal Sheehan uses to help nonprofits achieve financial sustainability. It’s a cycle. It’s a system. The flow creates continuous improvement and continuous analysis.
Let’s break it down…
Simply put, stewardship is nurturing, supporting, and taking care of something. Its time spent thinking, planning, talking, and taking action to ensure long-term viability.
Ask yourself. Does your team steward your financial operations as much as other organizational activities? Think about how much time your team spends each week on fundraising? How much time do you spend cultivating donors? How much of your time is spent chasing donations and grant money? 50% of your week? 70%? Maybe even 90%?
Now, how much time do you spend analyzing how those hard-fought dollars are used? Do you have regular meetings with your team about finance? Do department or program heads talk about budget in real-time and regularly? In most cases, the time spent on financial management (stewardship) is not even close to the time spent raising the funds. It’s time to change that dynamic and take one huge leap closer to financial sustainability.
“Sustainability starts with a commitment to apply the same principles and stewardship to finance as we apply to fundraising and donor relationships.” – Chantal Sheehan, Blue Fox CEO
The use of modern financial technology is a critical support mechanism for financial stewardship. Tech platforms have come a long way in the last decade. They are more cost-effective and affordable than ever, and it’s time for nonprofits to get on board. Using financial technology appropriately is no longer just a plus for nonprofits… it’s a must. FinTech or bust! [Our Favorite Back Office Technology Solutions]
Some reasons why social impact organizations should adopt or seek out best of breed financial technology:
* Side note on “cloud-based”: Let’s get coffee if you think we’re talking about actual clouds here :)
Data. It’s not just a word for nerdy back-office folks crunching numbers. Data is a word used by proactive smart leaders. Data is what gives nonprofit executive directors, CEOs and board members the ability to make reasoned, educated decisions. Data is the pencil that draws the blueprints for strategic planning. If your last organizational decision was made by intuition, why not generate some data to check yourself and provide evidence? Data breeds buy-in too.
When it comes to collecting data, our CEO always says, “Garbage in, garbage out.” If your FinTech is working for you the way it should be, avoiding bad data should be straightforward. But here are some operational decisions for your team to consider to ensure your data is squeaky clean:
Now that your data gleams, it’s time to use it to generate insights. Data tells you what happened. Insights tell you why something happen, why something failed to happen or what might happen next. Insights result from analysis and discussion. One of the best ways to analyze and discuss data is to make it visual whenever possible.
Here are some tools that make financial data visual and encourage your team to generate insights to aid in organizational decision making:
Once you’ve taken your data from snooze-fest to wow-fest, you’ll notice a fairly immediate shift in how your team discusses it. Insights will begin to reveal themselves, giving you the capacity to make informed decisions and strategic moves as needed.
Stewardship (Yes, Again)
It’s time to close this loop of continuous improvement and analysis. Let’s talk about, plan for and become proactive (a.k.a. steward) about your financial situation to put your organization in a more sustainable position.
Data and the insights they reveal show you what financial risks and opportunities exist. Now, relate those to your external and internal environments. Determine what changes you can make now so that your organization is stronger and better able to mitigate risks. Think about how these new insights should inform changes to your current fundraising initiatives, revenue goals, operational plans, and program strategies. Then plan for a rainy day. Shore up any potential cash flow weak spots by acquiring a line of credit and creating an operating reserve (5 Key Elements Your Operating Reserves Policy Needs). Do this year after year, and you will watch your organization shift from reactive to proactive, and sustainability will follow.
As always, if your team could use support implementing this system at your nonprofit, Blue Fox is her to help! Give us a call at (321) 233-3311 or email hello@yourbluefox. Feel free to learn more about our philosophy, clients, services and our team before you make that call. Now, let’s get to work!
By: Blue Fox CEO, Chantal Sheehan and Marketing Guru, Chelsea Clementi
A Letter From Our CEO, Chantal Sheehan
I’m over it.
The government screw ups.
The conspiracy theories.
The unemployment rate.
The food supply.
The feeling of loneliness.
The worry. About everything. All the time.
Oh look, murder hornets.
I’m so over this s#!t. I know you are, too.
That’s why I’ve decided it’s time to break up with COVID-19.
As leaders and business owners, we have a job to do. Yes, we must acknowledge and accept the reality we now find ourselves in, but we can’t afford to lose touch with each other and perhaps more importantly, ourselves. We can’t afford to sacrifice today and tomorrow’s opportunities because a virus just gave the world a horrible, epic swirlie and we’re glued to a device watching things fall apart.
It’s time to break up with COVID-19.
This is a defining moment in time, no doubt. How will this moment come to define you?
Remember: we have work to do. We must get up every day, lead our teams, take care of our families, and provide services and support to communities and people who rely on us. (And hopefully, find toilet paper somewhere in between.)
Need inspiration, or a reminder of why your work matters? Here’s a sample of the amazing things our clients have been up to – also known as why we get out of bed every day:
What are you up to? Let us know and we’ll give you a shout out, too. We’re in this together.
Still in bed? Still feeling blue?
Let’s throw all the damn clichés in here at once and snap the hell out of it:
Just keep swimming.
Be in the moment.
Enjoy the little things.
Or tell someone you wish you could.
Fix something you can fix.
Clean something you can clean.
Make a good meal.
Then give it to someone else.
Rethink your career.
Consider your long-term plans for your business.
(Make a long-term plan for your business.)
Plant a garden.
Plant a tree.
Talk to your neighbors.
You’ve got this.
Here are some of our favorite resources right now for moving on and moving out of crisis mode.
Those of us who successfully break up with COVID-19 and end our internal toxic relationship with all that it brings will be better for it in the end. I know that sounds trite, naïve even. But it’s a hallmark of human experience that when disaster or tragedy strikes, we evolve in response. The exceptional among us turn horror into beauty, discord into order, and brokenness into wholeness.
Join me. Say sayonara to this stupid virus.
Become a stronger, better, more flexible, adaptable, sustainable person, and then empower and support those around you to do the same.
I’m with you.
The Nonprofit Transparency Transformation
Welcome to the Blue Fox Blog! A fairly entertaining source of info and news related to our company, nonprofits, social sector trends, and, of course, accounting. Enjoy!
What Fuels Financial Sustainability?
The Magical Nonprofit Financial Ratio Matrix
Dear COVID-19, I'm Breaking Up With You
The Latest COVID-19 Resources for Nonprofits
10 Reasons to Outsource Your Nonprofit Accounting
6 Step Guide To Build Donor Trust
Our Favorite Resources for Nonprofit Fundraisers
3 Vital Resources for Nonprofit Start-ups
2020 Nonprofit Trend: The Virtual CFO
How to Make Your Nonprofit Recession-Proof
What Nonprofits Need to Know About the New Overtime Ruling
Double-entry Accounting Made Easy - Essential Desktop Guide, Free Download
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As Keynote Speaker for Nonprofit Hub's Cause Camp 2020
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Accounts Payable Made Easy - The Marriage of Bill.com and QuickBooks Online
Nonprofits - It's Time to Automate Your Back Office
How to Engage Your Board of Directors in Financial Conversations
How to Join the Social Enterprise Movement
Kindness Leads to More Profit & Productivity
Don’t Ignore This Nonprofit Management Advice
Building Blocks for A More Just, Equitable, and Inclusive Work Environment
QB Tip of the Month: How to Use Classes for Painless Grant Writing
Nonprofit Leaders - Talk Finance and Empower Your Staff
When to Hire An Accountant for Your Social Impact Org
Why Outsource Your Accounting?
That Time I Went to Cause Camp
Impact Investments in Yourself
Are You Paying Too Much for Payroll?
Financial Dashboards - Capture Attention, Create Conversations, Drive Results!
Don't Let FinTech Scare You - Our Top 4 Back Office Tech
The Wonderful World of Micro-Donating!
The Case for Kindness in Business
How Nonprofits Build Donor Trust: Be Transparent
5 New Year’s Resolutions for Sustainable Nonprofits
Why We’re on a Mission to Help Conservation Organizations
Money Matters - So Why Aren’t More Nonprofits Talking About It?
Tips to Get You A Clean Audit Every Year
Blue Fox Teams Up With Bloomerang to Develop Nonprofit Resources
Blue Fox Earns Better Business Bureau Accreditation
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Blue Fox - The Origin Story