My Financial Management Plan is an easy-to-use online tool that helps you organize and integrate the key components of your financial management system into a plan that you can share with your Finance Committee, senior management, Board of Directors, or others who "need to know." The tool is modular--which means that you can decide whether to complete the entire program or simply focus on the topics that seem most relevant to your nonprofit. All of your answers, input and uploaded files will be saved on a secure server and ready for your review and use when you return to My Financial Management Plan.
In any area where you already have a financial management element or policy in place, you will be directed how to upload and integrate those elements into your Financial Management Plan. For those areas where you do not have existing policies we'll provide sample templates for your consideration.
My Financial Management Plan will help you turn disparate elements of your financial management system into a cohesive plan that will help you demonstrate that your nonprofit is effectively and thoughtfully managing precious financial resources.
Since the program and your work reside securely online, you can return to your Financial Management Plan whenever you wish — to expand, revise, or rewrite.
This module will collect basic information about your organization including:
|Board Fiduciary Obligations|
The Financial Role of the Board of Directors
This module focuses on creating a policy that promotes financial literacy amongst staff and board so that decisions about the nonprofit can be made with the most understanding of the information available.
|Managing Fraud Risk|
Fraud is a risk that is common to all organizations—from the corner convenience store (the in-store cameras are not present simply to catch burglars in action) to city hall. It is the fact that nonprofits require all of their assets for mission fulfillment that necessitates diligence on the part of the nonprofit executive. This module will help you outline a policy for preventing fraud in your nonprofit.
The term "internal controls" refers to the safeguards used to assure that transactions are properly authorized, appropriately executed, and accurately recorded in accordance with management's intentions. Every organization that has at least one checking account should establish internal controls to protect its financial assets, and this module will help you come up with a policy.
A functional accounting system tracks the money that moves through your organization by account (income or expense item), funder and either program, admin or fundraising. This module will help you create a policy to make sure your system will be set up to do this.
|Chart of Accounts|
Choosing and setting up your chart of accounts is one of the first steps in creating your nonprofit's financial system. This module will walk you though what a good one looks like and allow you to include your own as a part of you financial management policies.
Critical goals of Cost Allocation are reporting costs equitably amongst differing activities and maximizing the spending of restricted funds and government contracts. Costs are allocated or classified based on the activities with which they are associated. For example, telecommunications expense may be allocated as "program" or "supporting" expenses depending on the purpose of the calls.
|Joint Cost Issues|
When something has both a program element and a fundraising element you encounter joint cost issues. This module will help your organization create a policy for recognizing joint costs and accounting for them properly.
|Grants and Contributions|
A contribution is as an unconditional, nonreciprocal transfer of assets, relief of liabilities, use of facilities or utilities (including advertising), or provision of services. This module will break that definition down and help you create a policy that will help your organization manage these income sources.
|Classifying Net Assets|
Is this money restricted or unrestricted? If it is restricted, how is it restricted? This module will help you make sure you are classifying your assets correctly.
|In-Kind Contributions and Expenses|
This module will help you formulate policies regarding in-kind contributions and their related expenses. Donated item collected by a nonprofit that will be then given out, sold, auctioned or raffled will be covered in the next module, Individual Donations.
Many nonprofit organizations receive donations from individuals, from cash to clothing to items a nonprofit will resell to raise money. It is imperative that nonprofit organizations make sure these kind of transactions are handled correctly, from the financial and regulatory side to good donor management. This section will walk you through the rules regarding individual donations, what the nonprofit is supposed to do and what the responsibilities of the individual donor are. You will then be able to create a policy for your organization.
The development and use of a budget is essential to sound financial management. While the process used may differ from one organization to the next, every agency needs some process in place by which it considers, reviews, adopts and monitors an annual budget.
|Managing Cash Flow|
Measuring cash flow is critical to all organizations. This module will help you create a policy for tracking and monitoring the cash in your nonprofit.
|Financial Statements and Financial Reporting|
The preparation of timely and accurate financial statements is necessary to achieving organizational accountability. But what do we look for in those reports. This module will walk you through several of the key reports all nonprofits should be preparing and help you develop a policy for creating them.
|IRS and the Form 990, part 1|
In 2008 the IRS introduced a new version of the form 990, the first major update to the form in 30 years. These sections will go over some general 990 issues and rules and will also go through what the new form is "looking" for in our organizational policies, especially around governance issues. We will address what nonprofits need to get ready to complete the form 990 (or 990-EZ or 990-N as appropriate).
|IRS and the Form 990, part 2|
In the 990 Part 2 section we will go though policies that are more specific and will only apply to certain organizations:
Government Reporting & Allocation is often not the same as GAAP. OMB guidance tells the Nonprofit how to calculate costs that are reimbursable by a federal award. It does not address financial statement presentation. This module will help you create individual policies for any government contracts you may have.
Who needs an audit, and if we do how do we manage it? This module will help you create a policy on for your nonprofit's audit.
|Return on Investment Analysis|
In recent years growing attention has been drawn to the issue of "outcomes." What change did the nonprofit inspire or create as a result of the funds it received from Donor X? Or what was the per-client cost of providing emergency housing, crisis counseling or a training program on first-time home ownership? This module will walk you through the process of creating a return on investment ("ROI") policy and conducting an ROI analysis on key programs.
Organizations are well-advised to adopt an investment policy describing the agency's investment philosophy and goals, acceptable investment instruments, and the selection of investment advisors. This module will walk you through creating one for your nonprofit.
To begin developing a customized Financial Management Plan for your nonprofit, click here.
For information about developing a special edition of My Financial Management Plan for your national association or umbrella group, contact Melanie Herman at (202) 785-3891 or via e-mail.