Finance Finest Practices for Your Grantmaking Group

As a grantmaker, you count on organizations you help to handle their awards successfully, precisely, and responsibly. Those self same expectations ought to apply to the way in which your administration and board deal with your group’s funds. Does your entity have all of the necessities? Listed below are some finance fundamentals that may allow your trustees and administration to know and handle their accounting wants. 

The Significance of a Finance Calendar 

What’s the best means to ensure issues within the finance division don’t fall off the radar? Use a finance calendar to maintain everybody within the loop. Simply as you count on grantees to satisfy their reporting deadlines, you need your workforce to remain on prime of upcoming obligations.  

Each finance calendar ought to embody assembly dates, fiscal occasions, regulatory obligations, and different deadlines which can be integral to your entity’s monetary well being.  

Assembly dates: Don’t simply embody the continued board and finance assembly dates. Put aside dates for the board and administration to evaluate the annual price range, monetary insurance policies and procedures, the monetary assertion audit, and the Kind 990 or 990-PF.  

Fiscal occasions: Plan out due dates for fiscal actions resembling payroll, financial institution, and bank card reconciliations. Your calendar ought to be aware your month-to-month shut and monetary reporting deadlines, and completion of the annual working price range. 

Regulatory obligations: Incorporate exterior due dates for regulatory gadgets like payroll tax remittances, W-2s to staff, and 1099s to impartial contractors. Remember to checklist your Kind 990/990-PF and enterprise registration submitting deadlines, and completion of your annual audit. 

Different deadlines: Don’t overlook about renewal deadlines on your group’s medical plan and enterprise legal responsibility insurance coverage, in addition to your employee’s compensation audit and state charitable registration. 

Tip! Claiming and repeatedly updating your group’s profile on Candid’s GuideStar is a good way to boost your visibility to potential donors, companions, and grant recipients. Not solely will it present a chance to showcase your entity’s affect, however it will probably additionally join you with a community of stakeholders within the philanthropic sector. Remember to embody this replace in your finance calendar. 

Board Schooling Alternatives 

Assist your board meet its fiduciary and financial obligations by offering members with the training they should make strategic selections and lead successfully. Listed below are 3 ways to supply invaluable board coaching alternatives: 

• Create a board orientation: Set board member expectations by sharing your entity’s organizing paperwork and historical past, entry to monetary reviews, and attendance necessities for conferences and different occasions. 
• Set up committees and the factors for serving on them: Typical committees would possibly embody Government, Finance, or Governance committees, in addition to these for Applications and Grants, Growth, Public Relations, or Know-how and Innovation. Even small foundations ought to have an Government Committee and a Finance Committee.    
• Evaluate key insurance policies: Your board will wish to meet at the least yearly to determine coverage selections which may affect the working price range, resembling modifications in focus or technique, in addition to fiscal insurance policies that mirror the values and techniques of the group. These would possibly embody creating or updating insurance policies for investments, grantmaking, expense reimbursement, or threat administration.   

Tip! Contingency planning is a should. Ensure your board is conscious of your entity’s Catastrophe Restoration Plan and has been briefed on: 

• Emergency contact info 
• Knowledge backup and restoration procedures 
• IT and programs restoration, together with various options 
• Insurance coverage suppliers and claims procedures 
• Monetary continuity plans for payroll, accounts payables, and receivables 

Fundamental Finance Capabilities 

To offer board members and administration with the data they should make knowledgeable selections, there are a number of primary finance features that your finance workforce ought to present: 

• Month-to-month financial institution reconciliations which can be carried out inside your entity’s accounting software program—not utilizing Excel 
• Well timed and correct month-to-month reviews which can be accomplished inside 2-3 weeks after month-end 
• A memo that helps to translate and clarify the monetary story to your board 
• Metrics reporting on the monetary and non-financial KPIs that your entity makes use of to watch its operations and affect  
• Entry to finance workforce members who can reply questions on monetary efficiency, or present coaching to board members on studying monetary reviews 
• Separation of duties in order that nobody individual can provoke, approve, and report a transaction 

Tip! Even in small organizations, it’s attainable to efficiently implement restricted management over finance features with involvement from an Government Director, board members, or others exterior of the finance division. For instance, a board member would possibly evaluate the financial institution reconciliations or payroll reviews. 

Utilizing Outsourced Assist to Deal with Monetary Challenges 

Outsourced assist can present cost-effective entry to specialised experience and convey a contemporary perspective to an entity’s processes and procedures. Think about outsourced options when your group wants help for a brief or short-term mission, to fill gaps left by retirements or transitions, or to ease the burden on a small workers. Plus, outsourcing can present one other stage of inner management and reduce the lack of institutional data that always happens throughout turnover. Use outsourced assist to: 

• Complement and help finance features, resembling serving to with account reconciliations, documenting insurance policies and procedures, creating money forecasts, or reviewing and analyzing grantee info 
• Sort out particular initiatives, resembling software program implementations, cyber safety coaching for employees, or organising a chart of accounts for a brand new group or throughout an accounting system conversion 

Tip! One nice use of outsourced assistance is to supply coaching on nonprofit monetary reviews for grant utility reviewers. Not solely will this assist reviewers higher assess the monetary well being of potential grant recipients, however it would additionally present workers with a larger appreciation on your personal entity’s finance features. 

Able to be taught extra about how your grantmaking group can have extra management of your funds? Take a look at our webinar, “Finance Fundamentals for Your Basis.”