The November question for the Giving Carnival is: “What business practices should nonprofits adopt to maximize their resources?”
Great question! I think a very helpful business practice would be having open books.
Donors are used to living in a world of increasing transparency. And with sites like GuideStar publishing our 990’s, our financial information is more readily accessible than ever.
I think we should embrace this. The hospital I work for is publishing its quality indicators on the web. If you want to see if we follow best practices with heart attacks, you can find out right on our own website. Even if the stats aren’t what we’d like them to be.
It goes beyond working with the 990’s on GuideStar though. It means having tight financial controls so that it’s easy to see that the money people give goes directly to the right place. [Don’t ask me for advice in setting these controls up. There are generally accepted accounting procedures already out there. Ask a CPA that’s conversant in nonprofit accounting.]
Another great practice is subjecting your books to an annual audit by an outside firm.
We don’t necessarily need to shout-it-from-the-rooftops that we have tranparent finances or really tight financial controls. People already expect us to so trumpeting it would probably raise red flags rather than reassure donors.
But the wonderful thing about the world we now live in is that if we don’t have these controls, we will be found out. I really think that is a huge benefit of living in our world!
I hope you can see that using good accounting practices will definitely help maximize your nonprofit’s resources!