April, 2004 -by Peter C.
This Month's topic:
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|This Month's Topic: Financial Management
Each month, this area provides with a
number of my favorite and most helpful sites regarding the topic of the month.
Tip of the Month
Each issue, I start with a discussion
of my management perspective on the month's topic, and give you a few hands-on
ideas to consider.
Here, I provide you with my
recommendations on the best printed materials available that can help you
become more mission-capable in the area of financial
I provide you with some good ideas for
financial software, and some suggested uses of the tech to better your
organization in the area of financial management.
How does marketing effect financial
management? That may seem like a stretch, but it won't after you finish
reading this tip.
In May, we'll look at issues surrounding
Websites of the
This section includes websites of interest on this
month's topic. I urge you to give each a look, as they often cover different
areas or have a different focus on the topic area..
Management Tip of the Month
Financial Management in a Mission-Based
Organization: One part of the job
People who have heard me speak, or read my books
over the years know the mantra: The first rule of nonprofits is
"Mission, Mission, and More Mission". The second rule of
nonprofits is "No Money, No Mission" Thus, financial management is an
important part of good mission, and a stewardship responsibility for anyone in
a staff or volunteer role.I urge you to carefully manage your funds, and to
think of all of your expenses as investments in mission; investments that
should be measured by a combination of both financial return (are you making or
losing money on a particular service and how much) and mission return (how much
mission are you getting) versus other options for the uses of the funds.
Additionally, you need to be increasingly transparent in your financial
efforts, so that funders, donors, and community members clearly understand that
you are managing your financial resources appropriately.
That having been said, financial management is only
one of the many things you need to do as a mission-based manager. Thus
you need to develop financial systems, working with your accountant, financial
manager, and board Treasurer, to allow both your board and staff to budget and
monitor your finances in an efficient and responsible manner. I see far too
many CEO's who perseverate on their financials at the cost of many other
important functions. If you haven't seen them, take a look at some of this
month's website and publication recommendations, check them out for some help
in this area. Start with the
Management Library's finance section and work from there.
Balance in nonprofits is so crucial. This balance
includes good, but not obsessive, financial management.
If you found this hint helpful, there are
lots more management, marketing, and technology ideas for you in the "Ideas"
section at www.missionbased.com.
Check them out--they're free.
Here are my recommendations for your review
in the area of financial management. There are literally dozens of of
good titles, some general, some very, very focused. After you look at these,
type in Nonprofit Financial Management into the Amazon search block on the
left, and you will see what I mean about wonderful choices!
My top recommendations in financial
management are these:
If you want more information on these
recommendations, click on the cover image and you will go the page about the
book on Amazon.com. There, you can look at more info about the book, and read
some reviews before you decide whether or not to purchase or look for this book
at your local library.
Note: If you want more
recommendations on publications in a wide variety of areas, including financial
management, go to the publications section of my website:
Again, If you don't find enough choices there, type
"nonprofit financial management " in the Amazon.com search box on the
left hand side of the page and you'll have more choices than you probably
Technology Ideas .
Financial management and
There are a lot of applications of technology to
help you with financial issues.
Website: One place that is essential to
focus on is your website, both in sharing financial information and in
organizational transparency. For example: Do you post your 990's for the public
to see? Do you have your financial reports available online in a section for
board members? What about area budgets for staff, again in passworded areas of
the site? Use the web to help disseminate and share information.
Printed Materials: Make sure your printed
reports vary to meet the needs of different groups within your organization.
For example, it is unlikely that most board members need as much financial
detail as your board Treasurer does. See more on this in my Marketing Tips
below. Remember that having good looking, color printouts is no longer
expensive or difficult.
Software: There is some great financial
management software out there, and some that is really poor-that takes more
time to use than a pencil and paper would. How do you tell what would be good
First, check websites of the vendor. Most
reputable vendors will allow you to download and try a sample version. Look at
the features. Does the software track the things you need tracked, does it have
the capacity for the number transactions, functions, and accounts you need now
or project to need over the next 3 years?
Remember that many financial management software
sets come with the option to add on different kinds of functions. Check to see
if your current software can add capabilities that meet your growing needs
before you buy something else.
Talk to peers about what they are using. Talk to
your state and national trade association, and see if they recommend certain
products or, better yet, can provide you with discounts on purchase.
Finally, make very, very, very sure about the
level of tech support that the vendor provides. Are there local tech experts
who are certified by the manufacturer that can help? Does the manufacturer
provide an online chat option for support? Ask other users of the product how
they have found support.
Here is a terrific article on purchasing the right
software package for your organization.www.iknow.org/pages/articles/findingther.html
Here is a set of good questions to ask when
looking for a package: www.nonprofits.org/npofaq/05/12.html
Here's a listing of good nonprofit financial
software with some parameters, costs and reviews from the Nonprofit FAQ:
If you found this hint helpful, there are lots
more management, marketing, and technology ideas for you in the "Ideas" section
at www.missionbased.com. Check them
Schedule for Peter Brinckerhoff
Below you'll see the date, location, and topics of
training I'm scheduled to do in the next few weeks. For more information on a
particular speaking engagement, get in touch with the contact person listed in
the right hand column, or email me.
For more information on my availability throughout
the next 12-18 months, available topics, sample agendas, and fees go to
||North Easton, MA
||Center for Nonprofit
||Center for Nonprofit
Marketing and Financial management; not a
odd as it would seem.
Marketing and financial management---do they
go together? Although it might sound odd, there are real applications of
marketing in the financial management area.
First, remember that good organizational
marketing and its result: meeting the wants of all your funder, service, staff
and board markets is a key part of good financial health---happy customers come
But in the financial management area itself
you can apply marketing techniques particularly when it comes to financial
reporting. Far, far too many organizations provide voluminous financial
reports, all identical, to everyone that receives financial information. In
doing so, these organizations not only waste paper, but they impede and
sometimes subvert the financial oversight process---there is too much
information and it is too dense to read and understand.
How do you find out what people want? You ask them.
And, you have the capabilities to differentiate reports by person or group. For
example, a division manager probably needs to see detailed information about
his or her programs, but only summary information about the entire
organization. Same is true for your Treasurer as opposed to a general board
member: the reporting needs are different.
Sit down with your board and staff and ask
them what kind of information they can use, in what format, and how often. Then
do your best to match those wants with the reports your financial department
produces. Hint: Nearly all good financial management packages can do this kind
of differentiated reporting. Don't let your CFO say "We can't do that!"
Finally, remember to train your board, and staff in how to read, understand and
use the financial information that you do give them.
If you want to see more about this in detail, take
a look at more about my book
Mission-Based Marketing; Second
If you found this hint helpful, there are lots more
management, marketing, and technology ideas for you in the "Ideas" section at
www.missionbased.com. Check them
Future Topics in 2004
for the Mission-Based Management Newsletter....
Involvement of Younger Staff, Board, and Volunteers
your topic suggestions at email@example.com
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