Balancing the Mission Checkbook

Are you a mission cruncher?

In moments of indiscretion, some people have referred to me as a number cruncher. I understand. For non-finance folks, it’s easy to have the perception that those of us who work in nonprofit finance spend our days poring over formulas and spreadsheets (which, let’s be honest, is partially true). But the reality is, our passion for this work is driven by the missions of the nonprofits we serve and the broader causes they’re supporting. In fact, like many other nonprofit finance leaders I know, I began my career doing program work.  The finance skills came later and have always been in the service of furthering the mission of the organizations I’ve worked with.  I like to think of myself as a mission cruncher rather than a number cruncher.

Don’t get me wrong, my title is finance director and I have the initials CPA dangling after my name on my business card.  Admittedly, I take as much satisfaction as any nonprofit finance leader in sharing yet another squeaky clean audit with our board of directors.  I have even blushed with pride when a board member referred to my presentation of the annual budget as “elegant.”  I have the finance geek thing… bad.

But 30 years in the nonprofit sector have convinced me that the true power of financial acumen isn’t in achieving laser-like accuracy or producing a tidy report— at least not as ends in themselves.  The real purpose of excellence in financial management is to take a mission and make it hum.

So if we’re going to crunch a mission, what does that look like?  At every juncture where finance meets program in a nonprofit, there are opportunities for nonprofit leaders (board members, executives, program managers, and finance staff) to help strengthen and guide the effectiveness of the mission work being done.  The tools we use may be financial in nature, but the impact they have is all about getting more good work done in the world.  Mission crunching isn’t only for the accounting department.

Certainly in the budget process, mission crunchers should be leading the effort.  We can do our part to keep finance in the service of our programs and not the other way around.  One way to do this is to kick off budgeting discussions with “no numbers” sessionsEncourage program staff to develop their goals and work plans with a vision to further the mission of the organization and to sync with the organization’s strategic plan. When the program purpose, goals, and direction are defined first, putting numbers to the plans is that much more effective and meaningful. 

Another opportunity for thoughtful mission crunching can be found in analyzing our organization’s business model.  A nonprofit’s business model is closely tied to mission success.  And every nonprofit has a business model, whether we are consciously aware of it or not.  As nonprofits grow and mature, we are often forced to reexamine our model. Changes in funding or changes in client demographics or changes in the larger economy can all cause us to reassess how we go about our business.  An important step in analyzing our model is to calculate the true costs of each of our programs.  Only by knowing what is really going on under the surface of our organization can we make fully informed decisions about how to move the entire organization forward.

Knowing the true costs of our programs allows us to balance each program in terms of its value to our mission work and its contribution to our financial sustainability. Mission crunching leads us to chart these program by program reviews in a mission-money matrix.  Understanding the facts about each of our programs gives us a chance to make better choices, to deliberately decide when and if one program should subsidize another, and to set more effective priorities.  We gain the ability to advocate for and advance our mission.  Without that knowledge, we are destined to be victims of our financial statements rather than visionary finance leaders.   With accurate and unbiased information, we have the chance to guide our nonprofits to a place of strength rather than be subject to results that baffle us.  But to do so, we need to know where we’re starting from.

What better way to integrate finance and program than to lead the way as proud mission crunchers in our organizations. We need good tools (and, yes, even tools that use numbers), but how we apply those tools needs to take into account our organization’s mission, vision, and strategies.  However we approach the task, seeing ourselves as mission crunchers can take our work as finance leaders and our organization’s mission to a new level. 

I hope you’ll embrace the new label!

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Curtis Klotz, CPA, has an education as far removed from his CPA as you can imagine (religion and women’s studies). He loves using his disparate background to translate and integrate nonprofit finance with program functions.