The job of finance professionals in the charity sector can be a complex one involving accounting for multiple income streams and reporting back to multiple stakeholders, often with limited staff and resources.
In 2023, financial teams are also likely to feel the pressure with the ongoing cost-of-living crisis. Many charities are responding to the crisis in different ways to serve their stakeholders, from producing awareness campaigns, to signposting and sharing advice, giving extra support, and rethinking traditional ways of working.
But the State of the Sector Survey by Pro Bono Economics describes the sector as “increasingly overwhelmed” with inflation alongside a rise in service demand: “while demand is rising, the financial position of many organisations is deteriorating”. The report calls for a “strong response” from funders and government.
Internally, charities may be able to improve their own financial position by maximising efficiency and improving their agility in responding to challenges, using digital technology to support these changes. Using Sage Intacct’s 2023 ‘Nonprofit Finance Team Survival Guide’, we explore how finance teams can enter the upcoming financial year with more confidence to help them make a difference.
“Financial performance information is extremely important,” the guide says, “but it is even more powerful when paired with operational performance metrics that demonstrate the powerful impact your organisation can make with each pound of funding”.
Contextualising incomes and outgoings with non-financial statistics is useful for measuring how far the organisation’s money is going in achieving its mission, as well supporting you to provide transparency throughout the organisation and beyond – from executives and the board to the organisation’s supporters.
With the increase in service demand caused by the cost-of-living crisis, this type of visibility is even more important as charities and non-profits try to stretch their funds further. As the guide suggests, organisations will also quantify impact in different ways depending on their particular mission and activities.
The job of finance professionals in the charity sector can be a complex one involving accounting for multiple income streams and reporting back to multiple stakeholders, often with limited staff and resources.
In 2023, financial teams are also likely to feel the pressure with the ongoing cost-of-living crisis. Many charities are responding to the crisis in different ways to serve their stakeholders, from producing awareness campaigns, to signposting and sharing advice, giving extra support, and rethinking traditional ways of working.
But the State of the Sector Survey by Pro Bono Economics describes the sector as “increasingly overwhelmed” with inflation alongside a rise in service demand: “while demand is rising, the financial position of many organisations is deteriorating”. The report calls for a “strong response” from funders and government.
Internally, charities may be able to improve their own financial position by maximising efficiency and improving their agility in responding to challenges, using digital technology to support these changes. Using Sage Intacct’s 2023 ‘Nonprofit Finance Team Survival Guide’, we explore how finance teams can enter the upcoming financial year with more confidence to help them make a difference.
Charities need to find the financial management solutions that work best for them and their specific goals, or they risk wasting time on manual data entry and spending time navigating systems that give little relevant insight.
With the right system, finance teams should instead feel in control and empowered. Getting to this point can include considerations such as whether you are able to access the information you need at the moment you need it, whether the technology you use is easy to understand, and whether your systems are flexible enough to meet the organisation’s ever-changing needs.
Embracing a new technology can also include considerations of employees’ digital skills. In this case, weighing up expected long-term impact with short-term cost is a good approach.
You might also consider whether different internal stakeholders should have access to financial information as appropriate to their role. Using technology that allows this could, for example, improve the efficiency of operations through immediate visibility to required information.
The ability to look forward is key at all times, but particularly as we approach the new financial year, with budgeting and planning taking a prominent role in charities’ financial activities.
The guide says, “Many accounting systems are only capable of rear-view mirror reporting – backward looking month-end financial packets that don’t provide any real-time insights. Today, non-profits need access to more and better information than yesterday’s news”.
Time in the charity sector moves notoriously quickly and the charities that are able to adapt quickest to changing circumstances are better prepared to survive.
Click below to download The Nonprofit Finance Team Survival Guide from Sage Intacct
)
Access all our articles and search the provider directory for free.