A nonprofit can finish the year with a balanced budget, or even a healthy surplus, and still experience significant cash pressure somewhere along the way. The reason is that an annual budget and a cash forecast answer different questions. A budget shows how much revenue and expense the organization expects over the course of the […]

A nonprofit budget can look perfectly balanced and still depend heavily on one assumption that has not been confirmed. Imagine your organization is building next year’s plan around $2 million of expected revenue, including a $300,000 grant renewal that leadership believes is likely but has not yet been awarded. If the grant renews as expected, […]

A nonprofit program can appear fully funded and still require significant financial support from the rest of the organization. That may sound contradictory, but it happens when a grant or contract covers the expenses that are easiest to identify while leaving many of the costs required to operate the program somewhere else in the organization. […]

A strong revenue year can create a false sense of security when it is time to build the next budget. Imagine your nonprofit finishes the year with $2 million in revenue. That sounds like a logical starting point for next year, especially if the organization had a successful year and leadership is considering new hires, […]

A grant can look healthy on paper and still be drifting off course. Imagine your nonprofit received a $250,000 grant for a 12-month program and, six months in, $150,000 is still unspent. At first glance, that may sound reassuring because there is still plenty of funding available. But the remaining balance alone does not tell […]