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May 31, 2010

Need to Improve Your Nonprofit’s Financial Management? 13 Key Questions You Should Be Asking

One of the most difficult challenges in financial management is for the board to focus on sufficient detail to be thorough and strategic without being drawn into insignificant and distracting detail. To ensure you’re linking mission to money, regularly ask yourselves these questions:

  1. Can we convincingly prove to donors and to ourselves that our spending reflects our priorities?
  2. How well do we stick with our plans and priorities and did our spending reflect the spending expected in our approved budget?
  3. What events might force us to deviate from delivering on our priorities this year and next?
  4. How can we curb spending mid-year if our contributed income fails to meet our goals?
  5. What are we going to do next year that is different from what we are doing this year and why are we making this change?
  6. How are we going to balance the budget for next year?
  7. What are our priorities for this year and have they changed?
  8. What is the emphasis of our actual budget spending?
  9. Is our actual spending still consistent with our priorities?
  10. Are our priorities for the year being executed as expected?
  11. What course corrections are necessary to ensure we meet our priorities for the year?
  12. Are there major pledges that we expect to be paid? What could affect their timely payment? Are there major grants we are expecting to receives? What could affect their timely payments?
  13. Is there a major payment we need to make in the coming months?

Need more? E-mail us to find out how we can work with you or present a workshop to hone these ideas. Check out our book, Linking Mission to Money: Finance for Nonprofit Board Members. You’ll find an invaluable annual checklist and schedule for your board’s duties in Chapter Five—Reviewing Priorities. Click here for more.