Do your financial management practices ensure the long term survival of your NFP? The following questions can help you to discover if you are following the 10 Commandments of NFP finance.

These guidelines can help your NFP establish a more secure financial position and ensure its longevity so that your organisation can continue providing services while using ethical and sustainable practices and procedures.

1.Where is the Money Going? Do you know where your NFP’s funds come from, where they are going, and how future events might affect their flow? Creating A workable budget provides your NFP with both a current snapshot of your organisation’s finances as well as helps you to make accurate and reliable projections and plans for the future.

2. Do You Know the True Costs of your NFP’s Programs? It’s impossible to plan and remain under budget if you don’t have accurate figures for your true cost of operations and individual plan costs.

3. Have you identified the True Cost of Your Overhead? NFPs face a wide variety of costs that can impact their ability to deliver services and remain in operation. It’s important to correctly group these costs into the correct categories so that budgets can be maintained and accurate funding goals set as you identify the costs that support the infrastructure of your NFP operations.

4. What’s Your NFP’s Ideal Financial Cushion? In addition to managing cash flows so that your accounts maintain a positive balance, it is important to ensure that your organisation maintains adequate cash reserves to ensure that operations can continue even through an economic downturn or loss of a source of funding.

5. Are You Monitoring and Managing Your Cash Flows? Often times many businesses and NFPS fail not because they don’t earn or raise enough money overall, but because they failed to properly manage their cash flows to maintain a positive fund balance at all times. By using management tools, you can learn to time and space your payments and receipts so that you don’t stretch your organisation too thin.

6. What’s Your NFP’s Financial Literacy IQ? Knowledge is power. Ensure that your NFP is in compliance with the various rules and regulations regarding reporting and accounting. Make certain you are taking the time to educate yourself to learn the financial terminology and best practices and procedures while you encourage all of the board members of your organisation to do the same. Learn how to interpret financial data and reports and seek the help and guidance of trained professionals.

7. Do You Have More Than One Basket for Your Eggs? By diversifying your NFP’s sources of funds and the types of fundraising drives that you conduct, you can help to protect your NFP during difficult economic times and rapidly changing needs.

8. Is Your Leadership In the Loop? Since your NFP’s finances are connected with every aspect of the operations of you NFP, have you taken steps to ensure that financial accountability and involvement remains within every aspect of your operations so that each sector remains collaborative and complementary in nature? Doing so helps to ensure that leadership remains in touch with the needs to volunteers, donors and beneficiaries and that plans remain realistic and workable in the future.

9. Are Your NFP’s Actions and Policies Clear and Above Board? NFP’s serve the public interest and receive public funds, so there is a great demand for the policies, practices, and records of NFPS to be transparent and open to inspection by a diverse group, from governing bodies and tax authorities to lenders, donors, volunteers, foundations and more. By working to ensure that your NFP operates in a transparent and accountable manner, you build the public’s trust, and maintain legal compliance so that you can continue to meet the needs of your community going forward.

10. Do You have a Plan for Difficulties? No matter how successful your fundraising efforts might be, or how professional and trained your board members, all NFPs experience bumps in the road. Board members leave, paperwork such as contracts or receipts can be lost due to an unexpected disaster; even reputations are susceptible to tarnish over time. Making certain that your board plans for potential calamities before they happen will go a long way to ensuring your organisation’s survival should catastrophe strike.

Following the 10 Commandments of NFP Finance will ensure that your organisation remains financially sound and socially relevant for many years to come.