Category

Grant Management

Mid-Year Budget Review

By | Abila, Accounting, Accounting Software, Budget, CPA, Grant Management, Internal Controls, MIP Fund Accounting, Nonprofit | No Comments

Let’s face it. Stuff happens. And, though you may wish your hard-fought and well-planned budget was settled, the National Council of Nonprofits says it best, “Budgets should not be ‘written in stone’ because the financial position of the nonprofit may change during the year.”

How is your nonprofit’s budget performing? Have you reviewed it since it was created and implemented? Is your revenue on target? Have any of the following occurred at your nonprofit? …

  • A shift or pivot in strategy or direction
  • Unforeseen events (natural disaster, legal, economic)
  • Organizational structure change (such as consolidations)
  • A change in funding received versus projected funding (such as receiving more or less from planned grant funding or fundraising activities)

A successful budget is one that is carefully crafted and implemented by a thorough budget team, then cautiously monitored and continuously updated throughout the year to reflect the inevitable changes affecting your nonprofit.

Download our Budget Checkup tool to put your Nonprofit budget to the test.

To learn about best practices when it comes to effectively monitoring and reviewing your budget throughout the year, download Budget Checkup: Critical Components of the Nonprofit Budget Review Process.

Feel like you have a pretty good understanding about the importance of the budget review process, but still relying on spreadsheets or an outdated solution? Join a live webinar, “Budget Lifecycle: Key Components to Budget Creation and Support” on Wednesday, June 7, for an in-depth review of how a true fund accounting™ solution can help you improve budgeting, so you can focus on your cause.

Looking for new nonprofit software to track your budget?  Answer these 5 Questions to Measure Fund Accounting System Effectiveness.

 

Welter Consulting

Welter Consulting is a technology firm empowering nonprofit and government organizations with effective software, consulting & training that can help you with your accounting needs. We are committed to finding the most affordable technology, the most powerful solution, and providing expert support. By leveraging technology and superior reporting, our team helps to free more of your time to devote to the important work of your mission. We bridge people and technology together for effective solutions for nonprofit organizations. We are passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Please contact us online or call 206-605-3113 for more information.

 

5 Questions to Measure Fund Accounting System Effectiveness

By | Accounting, Budget, FASB, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Mandated reporting has become increasingly complex, due to multiple funding sources and programs within nonprofit organizations. You may find yourself having to rely on spreadsheets and workarounds, which can quickly become unmanageable and have a higher risk for error. As compliance, regulatory agencies, funding sources, and complexities grow, these issues can quickly hinder mission productivity and you may be exposed to larger burdens including:

  • System constraints limiting your ability to adapt other new and vital technology
  • Poor financial control which can lead to future loss of time and money
  • Lost opportunities for additional funding because your system is not flexible or robust enough to properly handle tracking and reporting requirements

Sound familiar? If so, you may need a more robust accounting system. Time to ask yourself the following five questions.

Are you facing an upgrade or needing software built for the complexity of nonprofit finance and accounting? Download “10 Reasons Why Nonprofits Need True Fund Accounting™.”

Does my current solution incorporate nonprofit-specific accounting rules?

Audited financial statements must present information in accordance with the Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 116 and 117, or Governmental Accounting Standards Board (GASB) guidelines. If your reports need heavy customization to comply with these guidelines, you should consider software that easily provides compliance-ready reporting.

 Can I easily measure performance of a program or activity?

Nonprofits typically need to measure a program or activity outcome, and track beyond basic financial information – something off-the-shelf, which is something most commercial accounting software is not designed to do. Your software needs to be robust enough to track and report performance or outcome measures on financial statements, as well as budgeting outcome measures for accurate forecasting.

 Am I able to create reports for varying fiscal years?

While commercial accounting often assumes that fiscal years end in the same months each year, nonprofits often have to report to several different audiences, with different information requirements and reporting timelines. Thus, the ability to track and report across different time periods (cross-fiscal & grant-year reporting) is critical for nonprofits.

 Can I easily show how money is tracked or budgeted?

Funds must be treated as distinct entities with their own general ledger and individual revenue, expense, income, and balance sheet reports. Nonprofits need software that will automatically handle the offset postings to cash or payable accounts by fund, as well as the encumbrance processing, grant tracking, and budget controls.

 Can I perform allocations of indirect costs by grantors?

Accuracy of allocations is critical in providing auditors and grantors a complete audit trail, but these allocations typically are not handled well by a commercial accounting system not designed with nonprofits in mind. Allocations need to be performed on virtually any account balance at the program level, department level, or grant level, and across multiple segments at one time with advanced calculation options, including fixed or dynamic percentages, unit measures, and more.

 

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

What Do Grant Organizations Look For? What Funders REALLY Want When They Make Decisions About Where the Money Goes

By | Budget, Fundraising, Grant Management, MIP Fund Accounting, Nonprofit | No Comments

Funders, defined as people at grant organizations, approve fund requests. They can be a nonprofit organization’s bane or best friend. A new report, called Social Solutions: Foundation Report Study, examined the metrics by which foundations and granting organizations determine which nonprofit organizations to awards funds. The results are surprising and tell us a lot about what nonprofits can do to increase their opportunities to receive funding.

The Three Most Important Considerations for Funding

Funders overwhelmingly agreed on the main consideration for granting an award: IMPACT.

98% of those responding to the survey picked “impact” – as in the award they gave would make an impact on the project or people – as the most important consideration for funding.

Lagging behind impact but coming in second is MISSION. How well does the project or request match the fulfillment of the nonprofit’s stated mission?

And third, legal nonprofit status was cited as the third most important consideration. That was surprising given that one would assume that anyone applying to a foundation or grant organization would already have legal nonprofit status before requesting such funds.

Evaluating Impact

It wasn’t just the overall impact that was important to these funding organizations. To evaluate impact, they look at several criteria. This included:

  • Outcomes
  • Detailed data
  • Consistency to mission
  • Outputs
  • Community
  • Financials
  • Other criteria

Funders are also seeking clear, concise reporting, as well as strong community outreach. Communication around projects and nonprofit goals are also important. The funding organizations wanted to be sure that organizations are “putting their money where their mouth is” and doing what they state they will do in their mission and materials.

Reports Are Important

Reports back to the foundation are also an important part of the process. What the foundations and granting organizations seek in reports includes plenty of stories about how the money is making an impact, as well as the data to back that up. Spreadsheets, paper-based reports, and other documentation lends credibility and credence to reports and supports the nonprofits’ assertions of how money is being used or will be used.

One thing is certain: more feedback is required from nonprofits as part of the grant process than ever before. Funds are one thing, but telling a story about the funds is important.

Donors Like to See Dollars in Action

Donors like to see their money in action, making an impact, effecting change, and supporting the mission of the nonprofit. That goes for individual donors as well as foundations and granting organizations.

Large or small, all funders preferred to see stories (82%) over other forms of reports. Why stories? Stories paint a great picture of how funds have made a difference. That doesn’t mean that stories have to be written out. They can be told through images, slideshow presentations, or videos, but illustrating the impact of the funds on the lives of others was deemed very import for the funders to decide to whom to give money..

Your Take Away: Get Your Ducks in a Row

The big takeaway for nonprofit organizations is to be sure that you have your entire package prepared as best as you can before sending it to a funder. If your nonprofit status isn’t fully documented, your application may be pushed to the bottom of the pile.

Documenting achievements in both qualitative and quantitative formats is also important. Qualitative documentation such as stories, testimonials, and presentations enhances the emotional impact of your nonprofit’s work, while quantitative data support assumptions about its effectiveness.

Funders have money to give to worthy causes. Knowing what they are looking for and tailoring your grant paperwork to their requests can help you achieve your nonprofit’s funding goals.

About Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

 

The Right CFO Makes a Big Difference!

By | Accounting, CPA, Grant Management, Nonprofit | No Comments

Finding a CFO with the right skills, experience and chemistry with the organization’s leaders is critical. A CFO is more than an accountant. He or she is also a strategist. The CFO creates budgets, analyzes financial statements, provides strategic direction, and helps others in the company understand the plethora of data provided by the accounting and finance department.

When Should You Hire a CFO?

As your organization grows beyond its original size and begins to make a larger impact among its constituents, it’s natural to wonder when you should hire a CFO.  A few signs that indicate it is time to hire a CFO include:

  • The Executive Director, CEO or President is wearing too many hats. As a result, critical financial tasks aren’t getting done on time simply because the leader is too busy to handle them.
  • The organization’s finances have grown to be complex, requiring someone in the leadership chair who understands nonprofit accounting.
  • The Board of Directors feels a layer of oversight and leadership is needed to manage the accounting needs of the organization.

The right CFO will use their expertise to:

  • Bring a strategic, high-level perspective to the organization’s finance and accounting needs.
  • Build the organization’s capacity to manage its finances as it grows in size and complexity.
  • Reduce excessive workloads in the areas of finance, administration, real estate, technology or legal for the Executive Director (ED) and/or the Chief Operating Officer (COO).
  • Balance or supplement the skills of the controller or other finance team members.
  • Partner with the ED and COO to make decisions that benefit the organization from a financial perspective.

How to Find “CFO Right”

You may need to allow several weeks or months to search for the right CFO candidate.

The first task is to create a job description outlining the desired characteristics of the CFO. Focus on the necessary core capabilities, strengths, and experiences. It’s imperative that a non-profit CFO has experience with nonprofit financial management. Other core characteristics to look for among candidates include:

  • Understands non-profit budget models, contracts, and regulatory requirements
  • Knows and demonstrates passion about the organization’s mission
  • Produces detailed and precise work
  • Exemplifies strong listening and perspective-assessment skills
  • Communicates well, in a transparent fashion
  • Exercises good judgment in the midst of ambiguity

We mentioned it before, but the right CFO also has a certain chemistry with the leadership team. That’s not as an ambiguous term as you may think. Chemistry is essential to a calm, orderly, and productive relationship with the organization’s top leaders. The better they work together, the more work they can get done.

It’s difficult to assess chemistry, but allow all your top leaders to meet and interact with potential candidates. Give them time to get to know one another during the interview process. Ask them how they feel about each candidate. If you have several equally qualified candidates, you may need to rely upon the team’s judgment about compatibility as the deciding factor.

Can You Afford a CFO? Options

While hiring a full-time CFO is a great solution for many mid-sized and all large non-profit organizations, many are too small to afford or need a full-time CFO. If your organization falls into that category, there are several things you can do to afford to hire a CFO.

One idea is to hire an interim or temporary CFO. No one earns the title of CFO without building an extensive body of knowledge and experience. Bringing someone into the role on an interim or fractional basis gives the Executive Director and the organization immediate access to the many lessons learned over the course of their career, at significant cost savings.

If you’re interested in finding your next CFO or placing an interim CFO in your organization, Welter Consulting can help. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.