According to the report The Next Generation of Australia and New Zealand Giving, when donors are looking for financial information on nonprofits, some of the top things they look for are financial efficiency (64%), and the impact of their donation (58%). Donors care about financial stewardship and they also care about being able to clearly see the impact of their donations.
- Development involves finance in building case statements and donation solicitations. Being accountable to donors starts with the promise you make when you ask for a gift. Your solicitations should be as clear as possible when stating what you will do with donations received. Finance can help answer key questions like: How much money do you need for this project? What happens if you receive more donations than you need? What exact language should be used? Having finance involved from the beginning helps avoid conflicts surrounding these issues later.
- Development focuses on raising unrestricted funds. This can be a challenge, but unrestricted funds provide your organisation with the most flexibility. Restricted funds fuel your programs, while unrestricted funds fuel your growth. Unrestricted funds can be used to build infrastructure and innovate. Your finance team can feel good knowing funds are available that can be used for any purpose.
- Finance supports investment in development and communications. It takes time and money to build relationships with the donors that make the work of your organisation possible. Development and communications are increasingly intertwined, as getting information out about the donor’s impact is a priority. Audiences have high expectations for communications—they want them to be quick, professional, and personalised. Proper resourcing for development and communications should be in the budget.
- Finance inspires confidence in leadership’s financial management. Sharing financial information is good. Sharing financial information that shows leadership had a solid plan, where the budget and actuals match, is even better. Include details—both numbers and narratives—about your finances on your website, in annual reports, and in other marketing materials.
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This blog first appeared on SG Engage.