I read this article recently, “Three Significant Trends in Nonprofit Financial Management.” The author, Dawn King, focuses on three trends currently occurring in the nonprofit sphere:

  1. Accountability – Nonprofits are being asked to be accountable for the financial management of an organization to local, state and federal authorities. Across the nation, new laws are taking effect as a reaction to unethical practices both in the nonprofit and for-profit sectors.
  2. Public Donations are Down – In the current economic climate, previous donors are tending to make smaller donations and new donors are harder to find. Fewer donations can lead to a cut in programs and services, which makes the organization less attractive to new donors.
  3. Grand Funding is Down – Federal and state money has been directed to more economy-boosting programs and many private foundations have seen their endowments shrink as investments have underperformed, so they have fewer funds to grant.

What does this mean to existing nonprofit organizations and people starting a nonprofit? It means that you must take stock of your financial management policies, procedures and overall performance. Make sure you have the correct record-keeping in place and that you are complying with all the new regulations and reporting requirements. Ensure that your donors are kept informed as to your organizations financial status. It is vital now, more than ever, that nonprofit organizations practice sound financial management and remain accountable for how their funds are spent.

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