For Nonprofits, Cash Flow Management is King
By Lisa Cremin, Director, The Community Foundation for Greater Atlanta
We all have our strengths and weaknesses.
As a grantmaker, when reading nonprofit’s grant proposals and financials, it doesn’t take long to observe that cash flow management is a real challenge for many organizations, particularly small and midsized ones. Executive directors and staff of smaller nonprofits are uniquely talented in so many aspects of running their organization but many lack experience and training in financial management.
Without consistent cash flow forecasting and management, nonprofits leaders – just like business leaders- can find themselves in a corner when anticipated revenue doesn’t materialize as expected or scheduled. For a nonprofit dependent on grants, contributions or government contracts, it’s vitally important to understand when anticipated funds will arrive. All too often, nonprofit leaders find themselves to doing whatever it takes to keep their essential programs running. Which, as we know, is stressful.
Cash is king. Organizations need to have cash to operate, and they need to manage cash flow so they can predict cash flow shortages. Also, like for-profit businesses, they occasionally need access to bridge loan funds to bridge that gap. But these resources haven’t been there for undercapitalized small and mid-sized nonprofits, of which there are many.
I’m proud to be a part of The Community Foundation where we have taken on these issues and just launched a great new resource to help – www.NonprofitBridgeLoanFund.org. The website has applications for our unique bridge loans for small and midsized nonprofits that have been declined for a loan by a bank. The site also has capacity building tools, such as videos on how to do cash flow forecasting; resources for learning about nonprofit finance, and even a place where nonprofits can get the help of a coach to demystify and build skills in doing cash flow projection.
Our goal is to help remove the perceived stigma and lack of knowledge about loans and cash flow. We want to give nonprofit leaders a clear and easy path for getting basic financial help and build on their strengths. Check it out and let us know what you think.