It would be hard to imagine our world without nonprofits and the good they do. But like any for-profit business, a nonprofit must work to maintain a healthy financial standing (so it can continue its mission to help others). Therefore, a financial advisor may be beneficial for nonprofits.
Read below for some common areas where a financial advisor can assist your organization.
1. Understanding Cash Flow
Having adequate cash on hand is a must for a nonprofit to serve effectively. A financial advisor can help your organization understand the cash flow trends, including how often cash is coming in and where it is being spent. If you do not have a good understanding of cash flow tendencies, then your nonprofit will be in a state of financial confusion and less likely to reach its monetary goals (thus, limiting how you serve your community).
2. Analyzing Financial Health
A financial advisor can also help you comprehend the overall financial health of your nonprofit. This goes beyond cash flows and gets into analyzing how the nonprofit’s actual results compare to its budget. Unfortunately, if your nonprofit is consistently over budget on expenses and under budget on donations, then it may cease to exist.
3. Developing a Fundraising Plan
A financial advisor can provide recommendations for how to increase fundraising. This requires an analysis of existing donations, grants, and gifts to determine if they will most likely continue and for how long. Your team, along with a financial advisor, should brainstorm new donations and study ways to increase existing ones. A financial advisor well-versed in nonprofits understands fundraising planning and can help make your brainstorming sessions productive.
4. Creating a Budget
It’s not uncommon for a large donor to want to know how the donation will be used. This is where a financial advisor can help because an experienced one will assist you in developing a realistic budget. And frankly, creating and maintaining a budget are just good business practices. A budget sets financial goals and boundaries for your organization.
5. Understanding Form 990
Most nonprofits are required to submit Form 990 each year. This form helps the IRS maintain information about your nonprofit, as well as provide information to the public about your organization. Form 990 can be daunting to understand and complete, and this is where a qualified financial advisor helps. The advisor knows which information for you to gather for the form and can assist with a possible audit.
Consider Hiring Morgan & Associates
Our team at Morgan & Associates has the experience to help your nonprofit with the areas above (plus much more!). We would love the opportunity to help.