Financial Strategy and Business Models

Information on nonprofit business model definitions and planning, the financial strategy and structure of nonprofits, how nonprofits are changing their financial strategies and adopting emerging models.

Blog Articles in Financial Strategy and Business Models

Myth (and Facts) about Nonprofit Social Enterprise

Nonprofit management and strategy topics seem to come in waves for me at Nonprofits Assistance Fund. The theme of the last quarter seems to be earned income and nonprofit social enterprise.  While the specific questions and ideas vary widely, there are some ongoing myths about social enterprise that I hear over and over that need to be dispelled. The myths fall into three categories:

 

Myth #1:  We can’t do that!

The “S” Word: In Pursuit of Sustainability

The term “sustainability” and its variations are everywhere in management articles, research reports, and conference presentations throughout the nonprofit sector. I’ll confess that I use it all the time, too. We can joke that this is just the newest buzzword, but the impetus is real. Leaders and advocates in the nonprofit sector are driven to find ways to ensure that valuable work can continue.

Lessons Learned From Accidental Financial Leaders

One of Nonprofits Assistance Fund’s goals is to build financial leadership in the nonprofit sector, and we know that financial leaders come from many backgrounds. When I first joined a board of directors three years ago, I probably couldn’t have told you the name of an income statement or balance sheet, much less the difference between the two. During my first year on the board, my goal during the finance portion of the meeting was to not say anything stupid. But with time and practice, I’ve started to grow into my role as an accidental financial leader.

The Innovation Sector

Innovation is essential to community and economic health. You often hear about innovation coming from the tech community—but what about in our sector? Nonprofits are constantly creating new solutions to old problems, and new ways to deliver those solutions. That’s innovation. Let’s ignite the conversation about how our state and region can continue to innovate and improve.  Following are some nonprofits doing truly innovative work in our community. 

Cookie Cart – Baking Bright Futures

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.

IRS 990: What’s in it for me?

When nonprofit organizations complete the IRS 990, the standard federal reporting requirement for nonprofit organizations, most probably aren’t thinking about how they will use the form. The 990 is essentially a compliance document, explaining to the IRS the mission, governance, program activities and financial situation of an organization for the prior year. The IRS uses the form to not only make sure the organization still exists, but also to check to see that the organization is meeting the rules for charities, and basically doing the things that it said it would do.

Mind the Gap: True Program Costs

Imagine this budget planning conversation at a human services nonprofit:

“The county wants to expand our contract! Isn’t that great?”

The easy answer is: Yes! We can provide more services in our community! But the smart answer is: It depends.  In this example, we’d need to ask ourselves a couple financial questions:

It's Never About the Donuts

I felt sick to my stomach. After a month of avoiding a serious look at our budget and a reforecast for the next six months, I was seeing a deficit of ($80,000). I knew that grant funding had not come in as expected and that donations were slower than previous years. I knew that we had included more stretch goals than baseline fundraising goals. I rechecked my forecast as the dread and fear sunk in.

6 Takeaways From This Year's #npfinance

It’s been a couple of weeks since the 4th Annual Nonprofit Finance and Sustainability Conference that Nonprofits Assistance Fund co-hosts with Minnesota Council of Nonprofits, and I’m still thinking about the topics, questions, and discussions from that day. The conference could not have had a better start than the keynote from Rodney Christopher, a Director on the Capital Deployment Team at F.B. Heron Foundation, on building strong nonprofit enterprises. Rodney invited us all to “let our nonprofit finance geek flags fly” and then provided us with inspiration and aspiration, with a strong dose of reality.

Want a nonprofit with flexibility, resilience, and durability? If only …

The #1 issue for almost half of the nonprofits included in a national survey is "achieving long-term financial sustainability." The most common responses for what they need to achieve long-term financial sustainability, are: “more revenue”, “more grants”, or “more general operating support.” If only we had more income ... If only.