Unleashing Financial Fortitude: Empowering Nonprofits for Success

Nonprofits are the best corporate citizens. While businesses focus on creating shareholder value, nonprofits pursue a mission that matters to their donors and local communities. This is why I am so proud of the work Chief Financial Partner does with nonprofit agencies to improve their financial health.

Recently, we worked with an agency facing variability in its donations and needed financial flexibility to sustain its mission during lean months. Concurrently, the agency's management team recognized the potential for optimizing their excess cash beyond the limitations of a traditional savings account.

Upon reviewing their budget variances, which included expenses from an ongoing software upgrade with irregular costs and seasonality in donations from events like their annual gala and year-end donation appeals, we developed a strategic roadmap. This analysis allowed the agency to identify surplus funds that could be prudently invested in safe fixed income securities. We created a treasury and CD ladder that invested their excess cash in equivalent tranches that mature every 30 to 45 days over an 18-month period. This initiative generated $60,000 in annual interest income!

Drawing inspiration from corporate best practices, we implemented policies detailing allowable investments, trading limits, and delegation of authority. These controls ensure prudent financial management and compliance while maximizing investment returns.

Collaboration with the agency's auditors ensured proper accounting treatment and disclosure of these investments. This comprehensive approach not only strengthened the agency's financial position but also instilled confidence in donors and stakeholders.

Work like this is a testament to the positive impact strategic financial management can have on mission-driven organizations.