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 […]

Few things create more uncertainty for a nonprofit finance team than seeing one number in a grant report and a different number in the accounting system. Both numbers may look reasonable, and both may have been prepared carefully, but once they do not agree, the conversation quickly changes from reviewing the grant to figuring out […]