Strategic Financial Management for Non-profit Leaders.

Accountability refers to the responsibility of non #

profit leaders to ensure that their organization is transparent and answerable to stakeholders, including donors, beneficiaries, and the general public. This concept is closely related to governance and stewardship, as non-profit leaders must be able to demonstrate that they are using resources effectively and efficiently to achieve their mission. In strategic financial management, accountability involves establishing clear financial policies and procedures, as well as regularly reporting on financial performance to stakeholders.

Accrual accounting is a method of accounting that involves recognizing re… #

This approach is in contrast to cash accounting, which recognizes revenues and expenses only when cash is received or paid. Accrual accounting is useful for non-profit organizations because it provides a more accurate picture of financial performance over time, and allows for better matching of revenues and expenses.

Activity #

based costing is a method of costing that involves assigning costs to specific activities or projects, rather than to broad categories such as departments or programs. This approach is useful for non-profit organizations because it allows for more accurate costing and pricing of services, and can help to identify areas where costs can be reduced or optimized. For example, a non-profit organization that provides educational programs might use activity-based costing to assign costs to specific courses or workshops.

Annual budget refers to a plan that outlines projected revenues and expen… #

The annual budget is typically developed by the organization's management and approved by the board of directors. It is an important tool for strategic financial management, as it helps to ensure that the organization has sufficient resources to achieve its goals and objectives. The annual budget should be based on realistic assumptions about revenues and expenses, and should be regularly reviewed and updated to reflect changes in the organization's circumstances.

Asset allocation refers to the process of dividing a non #

profit organization's investment portfolio among different types of assets, such as stocks, bonds, and cash. The goal of asset allocation is to achieve a balance between risk and return, and to ensure that the organization's investments are aligned with its overall financial goals and objectives. For example, a non-profit organization with a conservative investment strategy might allocate a larger portion of its portfolio to bonds, while an organization with a more aggressive strategy might allocate a larger portion to stocks.

Audit committee refers to a group of individuals who are responsible for… #

The audit committee is typically composed of members of the board of directors, and is responsible for ensuring that the organization's financial statements are accurate and complete. The audit committee may also be responsible for selecting and overseeing the work of external auditors, and for reviewing and responding to any audit findings or recommendations.

Balance sheet is a statement that provides a snapshot of a non #

profit organization's financial position at a particular point in time. The balance sheet lists the organization's assets, liabilities, and net assets, and is an important tool for strategic financial management. For example, a non-profit organization might use its balance sheet to determine its liquidity, or to assess its ability to meet its long-term financial obligations.

Bequest refers to a gift of cash or other assets that is made to a non #

profit organization through a donor's will or estate plan. Bequests are an important source of revenue for many non-profit organizations, and can provide a significant source of funding for programs and services. Non-profit leaders should consider developing a planned giving program to encourage and facilitate bequests from donors.

Budgeting refers to the process of developing a plan for revenues and exp… #

Budgeting is an important tool for strategic financial management, as it helps to ensure that a non-profit organization has sufficient resources to achieve its goals and objectives. The budgeting process typically involves establishing financial goals and objectives, identifying sources of revenue, and allocating resources to specific programs or services.

Capital campaign refers to a fundraising effort that is designed to raise… #

Capital campaigns are typically organized around a specific goal or objective, and may involve a variety of fundraising strategies and tactics. For example, a non-profit organization might use a capital campaign to raise money for a new community center, or to purchase a vehicle for its programs.

Cash flow refers to the movement of cash into and out of a non #

profit organization over a specific period of time. Cash flow is an important aspect of strategic financial management, as it can affect the organization's ability to meet its financial obligations and achieve its goals and objectives. Non-profit leaders should consider developing a cash flow budget to help manage and predict cash flow.

Cash reserve refers to a fund of cash that is set aside by a non #

profit organization to meet unexpected expenses or to provide a cushion in case of financial uncertainty. The cash reserve is typically invested in low-risk assets, such as cash or short-term investments, and is designed to provide liquidity and flexibility. For example, a non-profit organization might maintain a cash reserve equal to three to six months of operating expenses.

Charitable contribution refers to a donation of cash or other assets that… #

Charitable contributions are tax-deductible, and can provide an important source of revenue for non-profit organizations. Non-profit leaders should consider developing a donor recognition program to acknowledge and thank donors for their contributions.

Charity refers to a type of non #

profit organization that is established to provide relief to the poor, the distressed, or the underprivileged. Charities are typically exempt from taxation, and may be eligible to receive tax-deductible donations. For example, a non-profit organization that provides food and shelter to homeless individuals might be classified as a charity.

Community foundation refers to a type of non #

profit organization that is established to provide funding and support to other non-profit organizations in a specific geographic area. Community foundations are typically funded through donations and endowments, and may provide grants and other forms of support to non-profit organizations. For example, a community foundation might provide funding to a non-profit organization that provides after-school programs for children.

Cost allocation refers to the process of assigning costs to specific prog… #

Cost allocation is an important aspect of strategic financial management, as it can help to ensure that costs are accurately reflected in the organization's financial statements. For example, a non-profit organization might use cost allocation to assign costs to specific fundraising events or campaigns.

Cost #

benefit analysis refers to a method of evaluating the potential costs and benefits of a particular project or initiative. Cost-benefit analysis is an important tool for strategic financial management, as it can help non-profit leaders to make informed decisions about how to allocate resources. For example, a non-profit organization might use cost-benefit analysis to evaluate the potential costs and benefits of launching a new program or service.

Debt financing refers to the use of debt, such as loans or bonds, to fina… #

Debt financing can provide an important source of capital for non-profit organizations, but it also involves risk, such as the risk of default or the risk of increasing debt service costs. Non-profit leaders should consider developing a debt management plan to help manage and repay debt.

Donor #

advised fund refers to a type of fund that is established by a donor to support a specific non-profit organization or cause. Donor-advised funds are typically managed by a third-party administrator, and may provide a tax benefit to the donor. For example, a donor might establish a donor-advised fund to support a non-profit organization that provides education and job training programs.

Endowment refers to a fund of assets that is established to provide a per… #

Endowments are typically invested to generate income, and may be restricted or unrestricted. For example, a non-profit organization might establish an endowment to provide funding for scholarships or research grants.

Expense ratio refers to the percentage of a non #

profit organization's expenses that are devoted to administrative and fundraising costs, rather than to program costs. The expense ratio is an important metric for evaluating the financial efficiency and effectiveness of a non-profit organization. For example, a non-profit organization with a high expense ratio might be seen as less efficient than an organization with a lower expense ratio.

Feasibility study refers to a analysis of the potential costs and benefit… #

Feasibility studies are an important tool for strategic financial management, as they can help non-profit leaders to make informed decisions about how to allocate resources. For example, a non-profit organization might conduct a feasibility study to evaluate the potential costs and benefits of launching a new program or service.

Financial accounting refers to the process of preparing and presenting fi… #

Financial accounting is an important aspect of strategic financial management, as it provides stakeholders with a clear and accurate picture of the organization's financial position and performance.

Financial management refers to the process of planning, organizing, and c… #

Financial management is an important aspect of strategic financial management, as it involves making decisions about how to allocate resources, manage risk, and achieve financial goals and objectives.

Financial planning refers to the process of developing a comprehensive pl… #

Financial planning is an important aspect of strategic financial management, as it involves establishing financial goals and objectives, identifying sources of revenue, and allocating resources to specific programs or services.

Financial reporting refers to the process of preparing and presenting fin… #

Financial reporting is an important aspect of strategic financial management, as it provides stakeholders with a clear and accurate picture of the organization's financial position and performance.

Financial statement refers to a document that provides a summary of a non #

profit organization's financial position and performance over a specific period of time. Financial statements are an important tool for strategic financial management, as they provide stakeholders with a clear and accurate picture of the organization's financial position and performance. For example, a non-profit organization might prepare an annual financial statement to report on its revenues and expenses.

Fund accounting refers to a method of accounting that involves tracking a… #

Fund accounting is an important aspect of strategic financial management, as it can help to ensure that resources are being used in accordance with donor restrictions or other requirements.

Fundraising refers to the process of soliciting and securing donations or… #

Fundraising is an important aspect of strategic financial management, as it involves developing and implementing strategies to attract and retain donors, as well as to cultivate and steward relationships with stakeholders.

Funding cycle refers to the process of securing funding for a non #

profit organization, from the initial solicitation of donations or grants to the final reporting and evaluation of the funding. The funding cycle is an important aspect of strategic financial management, as it involves developing and implementing strategies to attract and retain funding, as well as to cultivate and steward relationships with stakeholders.

Funding source refers to a source of revenue or support for a non #

profit organization, such as a donor, a foundation, or a government agency. Funding sources are an important aspect of strategic financial management, as they can provide critical support for programs and services.

GAAP refers to Generally Accepted Accounting Principles, which are a set… #

GAAP is an important aspect of strategic financial management, as it provides a framework for preparing and presenting financial statements that are accurate, complete, and consistent.

Grant refers to a type of funding that is provided to a non #

profit organization to support a specific project or initiative. Grants are typically provided by foundations, corporations, or government agencies, and may be restricted or unrestricted. For example, a non-profit organization might receive a grant to support a research project or to provide services to a specific population.

Grant writing refers to the process of preparing and submitting proposals… #

Grant writing is an important aspect of strategic financial management, as it involves developing and implementing strategies to attract and retain funding, as well as to cultivate and steward relationships with stakeholders.

In #

kind donation refers to a type of donation that involves the provision of goods or services, rather than cash. In-kind donations are an important source of support for non-profit organizations, and can provide critical resources for programs and services. For example, a non-profit organization might receive an in-kind donation of food or clothing to support its programs.

Investment policy refers to a statement that outlines a non #

profit organization's investment goals, objectives, and strategies. The investment policy is an important aspect of strategic financial management, as it provides a framework for making investment decisions that are consistent with the organization's overall financial goals and objectives.

Investment portfolio refers to a collection of investments that are held… #

The investment portfolio is an important aspect of strategic financial management, as it can provide a source of income and growth for the organization.

Liability refers to a debt or obligation that is owed by a non #

profit organization, such as a loan or a accounts payable. Liabilities are an important aspect of strategic financial management, as they can affect the organization's financial position and performance.

Line item budget refers to a type of budget that involves allocating reso… #

Line item budgets are an important aspect of strategic financial management, as they can help to ensure that resources are being used efficiently and effectively.

Liquidity refers to the ability of a non #

profit organization to meet its financial obligations, such as paying bills or meeting payroll. Liquidity is an important aspect of strategic financial management, as it can affect the organization's ability to achieve its goals and objectives.

Marketing refers to the process of promoting and communicating a non #

profit organization's mission, programs, and services to stakeholders. Marketing is an important aspect of strategic financial management, as it can help to attract and retain donors, as well as to cultivate and steward relationships with stakeholders.

Mission statement refers to a statement that outlines a non #

profit organization's purpose, goals, and objectives. The mission statement is an important aspect of strategic financial management, as it provides a framework for making decisions about how to allocate resources and achieve financial goals and objectives.

Net asset refers to the value of a non #

profit organization's assets, minus its liabilities. Net assets are an important aspect of strategic financial management, as they can affect the organization's financial position and performance.

Operating budget refers to a plan that outlines projected revenues and ex… #

The operating budget is an important aspect of strategic financial management, as it helps to ensure that the organization has sufficient resources to achieve its goals and objectives.

Operating reserve refers to a fund of cash or other liquid assets that is… #

The operating reserve is an important aspect of strategic financial management, as it can help to ensure that the organization is able to meet its financial obligations and achieve its goals and objectives.

Outcome #

based evaluation refers to a method of evaluating the effectiveness of a non-profit organization's programs and services, based on their outcomes or results. Outcome-based evaluation is an important aspect of strategic financial management, as it can help to ensure that resources are being used efficiently and effectively.

Performance metric refers to a measure of a non #

profit organization's performance, such as the number of clients served or the amount of revenue raised. Performance metrics are an important aspect of strategic financial management, as they can help to evaluate the effectiveness of a non-profit organization's programs and services.

Planned giving refers to the process of encouraging and facilitating char… #

Planned giving is an important aspect of strategic financial management, as it can provide a source of long-term support for the organization.

Program budget refers to a plan that outlines projected revenues and expe… #

Program budgets are an important aspect of strategic financial management, as they can help to ensure that resources are being used efficiently and effectively.

Program evaluation refers to the process of assessing the effectiveness a… #

Program evaluation is an important aspect of strategic financial management, as it can help to ensure that resources are being used efficiently and effectively.

Program service refers to a type of service or activity that is provided… #

Program services are an important aspect of strategic financial management, as they can help to achieve the organization's mission and goals.

Restriction refers to a limitation or condition that is placed on a non #

profit organization's use of funds or resources, such as a restriction on the use of a specific grant or donation. Restrictions are an important aspect of strategic financial management, as they can affect the organization's ability to achieve its goals and objectives.

Revenue recognition refers to the process of recognizing and recording re… #

Revenue recognition is an important aspect of strategic financial management, as it can affect the organization's financial position and performance.

Risk management refers to the process of identifying, assessing, and miti… #

Risk management is an important aspect of strategic financial management, as it can help to ensure that the organization is able to achieve its goals and objectives.

Social enterprise refers to a type of business or venture that is establi… #

Social enterprises are an important aspect of strategic financial management, as they can provide a source of revenue and support for non-profit organizations.

Social media refers to the use of online platforms and tools, such as Fac… #

Social media is an important aspect of strategic financial management, as it can help to attract and retain donors, as well as to cultivate and steward relationships with stakeholders.

Sponsorship refers to a type of funding or support that is provided to a… #

Sponsorship is an important aspect of strategic financial management, as it can provide a source of revenue and support for non-profit organizations.

Stakeholder refers to a person or group that has an interest or stake in… #

Stakeholders are an important aspect of strategic financial management, as they can provide critical support and resources for the organization.

Strategic plan refers to a document that outlines a non #

profit organization's overall goals, objectives, and strategies for achieving its mission. The strategic plan is an important aspect of strategic financial management, as it provides a framework for making decisions about how to allocate resources and achieve financial goals and objectives.

Strategic planning refers to the process of developing a comprehensive pl… #

Strategic planning is an important aspect of strategic financial management, as it involves establishing financial goals and objectives, identifying sources of revenue, and allocating resources to specific programs or services.

Tax exemption refers to the status of a non #

profit organization that is exempt from paying taxes, such as income tax or sales tax. Tax exemption is an important aspect of strategic financial management, as it! Can affect the organization's financial position and performance.

Time management refers to the process of prioritizing and allocating time… #

Time management is an important aspect of strategic financial management, as it can help to ensure that resources are being used efficiently and effectively.

Treasury management refers to the process of managing a non #

profit organization's cash and other liquid assets, such as investments or accounts receivable. Treasury management is an important aspect of strategic financial management, as it can help to ensure that the organization is able to meet its financial obligations and achieve its goals and objectives.

Unrestricted net asset refers to the value of a non #

profit organization's assets that are not subject to any restrictions or limitations, such as donor restrictions or board-designated restrictions. Unrestricted net assets are an important aspect of strategic financial management, as they can provide a source of flexibility and adaptability for the organization.

Volunteer management refers to the process of recruiting, training, and s… #

Volunteer management is an important aspect of strategic financial management, as it can help to ensure that resources are being used efficiently and effectively.

Zero #

based budgeting refers to a method of budgeting that involves justifying every expense or allocation of resources, rather than starting from a previous budget or baseline. Zero-based budgeting is an important aspect of strategic financial management, as it can help to ensure that resources are being used efficiently and effectively.