If you’ve just come off of your organization’s year-end closeout process, congratulations! You survived! Now that it’s fresh in your mind, this is the time to use what you created to inform your nonprofit’s financial management procedures.
You can use your year-end data to educate your board of directors about financial matters, create better financial plans for next year, and focus more sharply on areas that need fundraising help or management attention. Here are some areas where you can become more efficient.
1. Board Minutes
Did you need to track them down at the last minute at year-end? Keeping accurate and detailed minutes of board meetings is critical. These records not only provide a history of decisions made but also serve as a reference for future actions and accountability. To effectively keep track of board minutes throughout the year:
Assign a Dedicated Recorder:
Designate a person responsible for taking minutes at every meeting. This could be the board secretary or another member.
Use a Standardized Format:
Having a consistent format makes it easier to review and understand the minutes.
Store Minutes Digitally:
Store minutes in a secure, easily accessible online location, such as Google Drive or Dropbox. This ensures that all board members can access the minutes as needed and that they are preserved for future reference.
2. Related Party Transactions
Was it a fire drill trying to identify transactions involving dealings between the nonprofit and parties with close relationships, like board members or major donors? Related party transactions can sometimes be complex and require careful documentation. Track them now for a more efficient closeout next year:
Keep a Comprehensive Transaction List:
Keep a running list of any related party transactions as they occur. This list should include details such as the nature of the transaction, parties involved, and the value of the transaction.
Make your Transaction List Accessible:
Use online storage services like Google Docs or Dropbox to maintain this list. Nonprofit Numerics will need to report on these transactions for your audit, so having them organized and easily accessible is crucial.
3. Lease Agreements
This may be new to your reporting needs, and you may not yet have a system for tracking these. But lease agreements are another area that requires meticulous record-keeping. These agreements can have significant financial implications, so it’s important to manage them properly over the course of the year:
Keep Digital Lease Agreement Copies:
Keep digital copies of all lease agreements in a secure, organized online folder. This ensures that you can quickly access any agreement if questions arise.
Track Key Lease Dates:
Use a calendar system to track important dates related to the lease, such as renewal dates, expiration dates, and payment due dates. Setting reminders can help ensure that you never miss a critical deadline.
Review Leases Regularly:
Periodically review lease agreements to ensure compliance and to identify any potential issues early. This can help you address problems before they escalate.
4. Grant Management
If grants are a vital source of funding for your nonprofit, as they are for many, managing them effectively is essential. And reporting back to funders without having to scramble for data is, well, …. priceless. You need systems!
Use a Grant Calendar:
Maintain a calendar with key dates for grant applications, reporting deadlines, and renewal periods.
Centralize Grant Documentation:
Keep all grant-related documents, such as proposals, agreements, and reports, in a centralized online location.
Track Grant Compliance:
Monitor grant compliance requirements to ensure that your organization meets all obligations and avoids any penalties.
5. Fundraising Activities
Your year-end data probably sharpened your attention on your fundraising activities. To sustain and improve your nonprofit’s fundraising operations:
Data-Driven Campaign Planning:
Your year-end data can guide you in developing a comprehensive plan for fundraising campaigns, including timelines, target audiences, and marketing strategies.
Current Donor Database:
Maintain an up-to-date database of donors, including contact information, donation history, and communication preferences. Segment by categories that are meaningful to your organization, so you can use that data for more personalized and effective marketing and fundraising initiatives.
Acknowledgments:
Make sure you have systems that ensure timely and personalized acknowledgment of donations. These recognitions strengthen donor relationships and encourage future support. They can also be a great double-checking system for your financial records of donations.
6. Volunteer Management
If your nonprofit has volunteers, they can play a crucial role in many areas of your organization. Did you learn you needed some specific fundraising help during year-end closeout? Are there volunteers with skills and connections you might tap more successfully? Is your Board of Directors lacking in any areas that came up at year-end? Make sure you’re evaluating your volunteers to identify possible future Board members.
Volunteer Database:
Keep a detailed database of volunteers, including contact information, special skills, employers, and areas of interest.
Training and Orientation:
Provide regular training and orientation sessions to ensure volunteers are well-prepared. This is also a great engagement opportunity.
Recognition:
Implement a volunteer recognition program to show appreciation for their contributions. It doesn’t need to be anything elaborate, but it should be something that makes volunteers feel important and connected.
Follow these recommendations, and next year’s financial reporting and audit processes will be more efficient. Plus, you’ll be focusing on the areas of your nonprofit management that can make your financial situation stronger and your processes more effective.
