When it comes to organizing the finances of your nonprofit organization, you’ll find that there are many similarities to the management of your own personal finances. Balancing your checkbook, paying your taxes, trying to save funds for something important, they’re all unavoidable aspects of your personal finances, and can be painstakingly frustrating at times. But if you’re organized, diligent, and know what you’re doing, the chore of managing your finances can become much less painful (well, besides paying your taxes, at least).
Similarly, keeping your organization’s finances in check is incredibly important if you wish to continue to maximize your income, improve donor acquisition and stewardship, minimize unnecessary expenditures, and remain efficient to help further your mission. And in order to make sure you’re able to achieve those goals, you’ll want to make sure to have a proper strategy in place, and the system to allow you to implement it. For the purpose of this article, let’s separate your nonprofit’s finances into three main categories: Funds, Appeals, and Campaigns. You’ll want to focus on the most meaningful ways to utilize these three elements, track and learn from your successes (and mistakes) for each, and over time, begin to discover what works best so you can repeat those results in the future.
Funds are the various accounts that your nonprofit has or uses to achieve specific goals. When you are attempting to build a new shelter for your animal shelter, or renovate your community library, or raise money to help provide school supplies for children, you should be “storing” those funds in specific, tailored Funds. Try labeling each Fund you have as well, so you can keep track of those funds more easily, and be more transparent to your donors. Having a dedicated “Save The Gulf Coast Sea Turtles Fund” is much better than having a simple account without a name, or no Fund at all.
While your Funds are your actual accounts, Appeals are the specific actions or events you go through to raise funding and donations for the Fund. You’ll want to keep track of every individual action you undertake, as well as every response to those actions. For example, an awareness campaign can be one of your Appeals, and you’ll want to track not only who you’ve contacted, but who has responded to those interactions, who has read (or not yet read) any emails or letters you’ve sent, and how they have or have not responded. Once you’re able to track and categorize that information, you’ll be able to discover what types of correspondence is effective for you, what is a waste of resources, and who you may be able to specifically target with different strategies to yield better results.
If Appeals are individual, specific actions and events you undertake to raise money for your Funds, Campaigns are the overarching umbrella that encompasses those Appeals. Think of your Campaign as a subset of your cause: If you’re trying to build a new facility to house your organization, and you need to raise money for your State-Of-The-Art Facility Fund, you’ll go through a number of different Appeals, over a set period of time, to raise that money as a part of your Capital Campaign. If you need that new facility in Summer 2018, you can set a goal of raising adequate funds (say, $500,000), and start raising funds and awareness in Summer 2015. That means your Campaign has a start date, a projected end date, and a reasonable, achievable, transparent goal. You’ll want to host several events, make multiple Appeals, and reach out over time to help raise money consistently.
Finally, make sure to keep your reporting in mind when dealing with your Funds, Appeals and Campaigns. Try to plan for the future, and figure out what kind of information you would like to know by the end of each Campaign. You may not ever know everything you need to know to have great success, but intelligent planning can help you to gather data that will be useful when strategizing for future efforts. Plus, if you keep your reports organized, you’ll have more time to dedicate to your mission, and less to bookkeeping.