Budgeting, Cash Flow & Financial Reporting for Nonprofits & Charities
A nonprofit leader’s guide to budgeting, reporting, and cash flow
Nonprofit leaders are often focused on cutting costs — but cost-cutting alone can’t lead to financial sustainability. In this practical and highly accessible session, Stephen Newland reminded us that the real key is putting the right systems, tools, and strategies in place to make your finances work for your mission, not against it.
Stephen is the founder of MoneyPath, a fractional CFO service that helps nonprofits and social entrepreneurs simplify finance so they can thrive. He brought 15+ years of experience across Fortune 500 companies, startups, and nonprofits to this session, delivering straightforward advice with zero jargon and a whole lot of clarity.
Whether you’re trying to improve cash flow, streamline reporting, or finally get a budget that works, this session laid out a roadmap for leaders who want their organizations to not just survive, but thrive.
Top Takeaways
10 Things Social Purpose Organizations Need to Know About Thriving Financially
1. You can’t cut your way to sustainability
Many nonprofits try to solve financial stress by trimming expenses. But that’s a short-term tactic, not a long-term strategy. Instead, focus on growth, process improvement, and proactive planning to drive financial health.
2. A good budget isn’t a crystal ball
Budgets aren’t meant to predict the future perfectly. They’re a plan for what you hope to do and a tool to help you make decisions. Think of it as a roadmap — and remember that it’s okay to adjust along the way.
3. Bookkeeping is the foundation
If you’re not keeping accurate financial records, nothing else works. Whether you outsource or build capacity in-house, prioritize clean, up-to-date bookkeeping. It helps you build trust with funders and make sound decisions internally.
4. Simplify your reporting
Don’t overwhelm your team with 15-page financial reports no one reads. Instead, focus on a few key indicators and visuals that tell the story quickly—like actuals vs. budget, cash on hand, and income by program or campaign.
5. Know your cash position
It’s critical to know how much cash you have and how many months of expenses you can cover. Use your financial reports to identify trends in your income and expenses, and build a cushion over time.
6. Systems beat heroics
Organizations shouldn’t have to rely on one finance-savvy staff member to make it through the month. Use simple tools (like checklists) to create systems that reduce risk, ensure continuity, and make your processes more resilient.
7. Internal controls matter — yes, even for small organizations
It’s not just about avoiding fraud (though that matters too). Internal controls also build funder confidence, protect staff from burnout, and create clarity around who does what and when.
8. Diversify your revenue streams
Relying too heavily on one source — especially the government or one major donor — puts you at risk. Aim for diversified income through individual giving, earned revenue, monthly donors, and corporate sponsorships.
9. Be intentional with restricted and unrestricted income
Unrestricted funds give you the most flexibility, but restricted funds can help you launch new programs. Make sure your team understands the difference and has a plan for managing both effectively.
10. Don’t wait until it’s urgent
Too many organizations wait until the finances are in crisis to take action. Building good habits now — like regular financial reviews, forecasting, and scenario planning — can keep you ahead of problems instead of constantly reacting.
Your Questions, Answered
How much cash on hand should an organization have?
Stephen recommended aiming for 3–6 months of operating reserves. If you’re not there yet, set incremental goals. Even having one month of cushion is a great start.
How often should we review our budget?
Monthly is ideal, especially if you’re managing active programs and revenue. Stephen also suggests a mid-year check-in to re-forecast based on actual performance.
We don’t have a bookkeeper. Is Excel okay?
Excel can work in the short term for very small organizations, but it’s risky long-term. QuickBooks or Wave are affordable, user-friendly options that allow you to scale while maintaining clean records.
Any tips on getting Board members more engaged in finances?
Make it approachable. Use visuals, avoid jargon, and provide short summary reports. Stephen recommends a simple dashboard with 3–5 key numbers for each board meeting.
What’s the difference between accrual and cash accounting?
Cash accounting records income and expenses when they’re received or paid. Accrual accounting tracks when they’re earned or incurred, giving a more accurate picture. Most funders prefer accrual, but it depends on your organization's size and needs.
How do you handle restricted vs. unrestricted funds in your reporting?
Stephen advises separating them in your chart of accounts and reports. This ensures you can clearly track how restricted funds are used and report back to funders accordingly.
What’s next?
Financial sustainability isn’t about cutting—it’s about clarity. With a few simple shifts, small nonprofits can build a strong financial foundation that supports growth and reduces stress.
As Stephen said: “Finance doesn’t have to be scary. It can be your biggest asset in driving your mission forward.”
If you missed the session or want to revisit key insights, the full recording is available to watch in our Membership. Be sure to sign up for The Good Growth Company newsletter to stay in the loop for upcoming sessions in our 10 Things series.
