Nonprofit Management: Home

Fundraising is an essential component and allows nonprofits to fulfill it's mission and deliver products and services. Individual and group contributions are solicited from members, alumni, volunteers, etc. Both in-kind and monetary donations require a set of procedures to manage the intended use. Donors have the ability to dictate exactly how their contributions are used and many nonprofit organizations utilize technology in order to manage this. A few of the more popular donation database software systems include: Raiser's Edge, Salesforce, and DonorPerfect.

A budget is a guide that can help a nonprofit plan for the future as well as assess its current financial health. It is quite common to periodically review the budget as well as compare it to the actual cash flow and expenses, to determine whether they are playing out as expected during the course of the year. It may be necessary to amend the budget during the year.

It is likely that the nonprofit's budget will be referred to many times throughout the year - by staff and board members who play different roles within a nonprofit. Budgets may even be requested by parties involved in financial transactions with the nonprofits, such as banks, or by donors/grantmakers considering a gift to the nonprofit. If and when you share the organization's budget outside the organization, make sure to stress that the budget is reviewed periodically throughout the year and revised as needed - not set in stone. Sometimes when people ask for the nonprofit's "budget" what they are seeking can be satisfied by sharing a copy of the most recently filed IRS Form 990 that shows a nonprofit's operating expenses and revenue during a fiscal year.

Membership growth is a concern for many nonprofit organizations. There are typically a few types of membership organizations: 1) corporate members, 2) individual members, 3) student members. Organizations also incorporate all three of these types of memberships and in the process can grow very large.

Understanding how each nonprofit organization is governed is a critical aspect in determining how efficiently it is run. A board of directors that is too large may have a difficult time making timely and relevant decisions in relations to fulfilling its mission and duties. Boards that have too little may not understand the needs of its membership due to inexperience and lack of diversity. One thing is certain though, the leadership and governance of the board are critical in fulfilling the purpose and mission of each nonprofit.

An organization's purpose and mission are unique statements that help to define a nonprofit. In order to get an "nonprofit" designation from the IRS, and organization must define it's mission and what they intend to solve and accomplish. By defining this mission, the IRS does not tax the nonprofit organization as long as the revenue collected goes towards accomplishing the stated mission. For the purpose statement, it goes beyond what a mission statement includes. It is simply the purpose for why the nonprofit was organized, it is a statement that is succinct and used to explain to potential donors, volunteers, stakeholders, and employees why they choose to associate themselves with the organization.