April, 2004 -by Peter C. Brinckerhoff

This Month's topic: Financial Management

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Websites of the Month

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..

Helpful Websites for Financial Management
Free Management Library	The Free Management Library's deep, deep, deep section on nonprofit finance.
Nonprofit Genie	A great set of questions and answers on nonprofit finance from the Nonprofit Genie.
Nonprofit Financial Center	A wonderful set of tools in the financial area for you, including sample budgets, cash flow, checklists and the like.
Coping with Cutbacks	A great list from the Wilder Center on what to do in tough financial times. From the wonderful book of the same name.
Muridae-Financial Accounting Requirements for Nonprofits	A terrific list of what you must have in terms of financial reporting for the feds and for most states.

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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 Free 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.

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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: www.missionbased.com/publications.htm

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 want!

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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 for you?

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: www.nonprofits.org/npofaq/05/09.html

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.

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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 www.missionbased.com/training.htm

Date	City	Topic	Contact
4/26-27/04	Buffalo	Business Development	NISH Deborah Atkinson datkinson@nish.org
5/04/04	North Easton, MA	Mission-Based Marketing	Stonehill College Center for Nonprofit Management Courtney Dunleavy cdunleavy@stonehill.edu
5/05/04	Akron, OH	Faith-Based Management	Center for Nonprofit Excellence Susan Griffin griffin@cfnpe.org
5/06/04	Akron, OH	Mission-Based Marketing	Center for Nonprofit Excellence Susan Griffin griffin@cfnpe.org
5/12/04	Springfield, IL	Mission-Based Management	Alzhiemer's Association Conference Maggie Schaver mschaver@siumed.edu
5/13/04	Cincinnati	Mission-Based Marketing	Michelle Class Barnes, Dennig MClass@barnesdennig.com

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 back.

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 Edition

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.

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Future Topics in 2004 for the Mission-Based Management Newsletter....

May	Online Marketing
June	Transparency
July	Start-up
August	Governance
September	Political Activities
October	Increasing Involvement of Younger Staff, Board, and Volunteers
November	Outcome Measurement
December	Life-Long Learning
Send me your topic suggestions at peter@missionbased.com

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