In this segment of Counting On Chazin, Michelle Philo, CPA and Director of New Client Experiences and Technical Services focuses on aligning nonprofit strategic plans with budgets, a crucial aspect that is often overlooked, yet is needed to ensure the financial feasibility of initiatives and programs.
Michelle begins with explaining how fundraising is directly linked to the cost of implementing new initiatives or expanding existing ones. She highlights the need to determine the costs associated with these initiatives, such as staffing requirements and inflationary rates.
The discussion delves into the collaboration between the accounting and finance teams and the board or strategic group during the planning process. Michelle suggests that the board should develop the strategic plan, which is then translated into goals and a plan of action by the executive director and their leadership team. The accounting and finance team plays a crucial role in putting financial figures behind the plan of action.
Michelle recommends involving the CFO or financial leaders when working through initiatives to assess their feasibility and identify necessary resources. This helps avoid going off on tangents or proposing unrealistic goals that may not be feasible for the organization. She emphasizes the importance of considering key performance indicators such as donor retention rate, average gift per donor, and cost per client when planning for growth.
The interview also touches on the concept of a five-year rolling budget, where the current year's plan is in focus but is continually adjusted based on feasibility and changing circumstances and Michelle provides examples of how nonprofits can align their strategic plans with budgets, considering factors like grant funding availability, cash flow management, and the need for additional staff or infrastructure.
Interviewer Julia Patrick, acknowledges the disconnect between the narrative nature of strategic plans and the concrete financial aspects required for implementation. She expresses concern over the lack of integration between the two and the potential limitations this may pose.
Michelle explains and amplifies on the significance of cash flow in nonprofits, emphasizing that inflows and outflows may not align. Proper cash flow management is necessary to ensure the organization can meet its financial obligations, such as payroll and supply purchases. She suggests considering reserves and planning for timing differences between grant funds and program implementation.
In this segment of Counting On Chazin, Michelle Philo, CPA and Director of New Client Experiences and Technical Services focuses on aligning nonprofit strategic plans with budgets, a crucial aspect that is often overlooked, yet is needed to ensure the financial feasibility of initiatives and programs.
Michelle begins with explaining how fundraising is directly linked to the cost of implementing new initiatives or expanding existing ones. She highlights the need to determine the costs associated with these initiatives, such as staffing requirements and inflationary rates.
The discussion delves into the collaboration between the accounting and finance teams and the board or strategic group during the planning process. Michelle suggests that the board should develop the strategic plan, which is then translated into goals and a plan of action by the executive director and their leadership team. The accounting and finance team plays a crucial role in putting financial figures behind the plan of action.
Michelle recommends involving the CFO or financial leaders when working through initiatives to assess their feasibility and identify necessary resources. This helps avoid going off on tangents or proposing unrealistic goals that may not be feasible for the organization. She emphasizes the importance of considering key performance indicators such as donor retention rate, average gift per donor, and cost per client when planning for growth.
The interview also touches on the concept of a five-year rolling budget, where the current year's plan is in focus but is continually adjusted based on feasibility and changing circumstances and Michelle provides examples of how nonprofits can align their strategic plans with budgets, considering factors like grant funding availability, cash flow management, and the need for additional staff or infrastructure.
Interviewer Julia Patrick, acknowledges the disconnect between the narrative nature of strategic plans and the concrete financial aspects required for implementation. She expresses concern over the lack of integration between the two and the potential limitations this may pose.
Michelle explains and amplifies on the significance of cash flow in nonprofits, emphasizing that inflows and outflows may not align. Proper cash flow management is necessary to ensure the organization can meet its financial obligations, such as payroll and supply purchases. She suggests considering reserves and planning for timing differences between grant funds and program implementation.