Fund Management and Reporting

When it comes to managing donor gifts, fundraising professionals in nonprofit organizations have to walk a fine line. On the one hand, professional fundraisers are not the accountants or financial managers of their organizations. On the other hand, they have a fiduciary responsibility under the AFP Code of Ethics to ensure to the best of their ability that donations are recorded and reported accurately and used according to the donors’ wishes—even if the donor is no longer around. 

It’s a little like when you were young and your mother told you not to let your little brother run into the street.

The following sources can help fundraisers get the information they need to monitor and evaluate financial management practices in their organizations.

Principles of Nonprofit Investment Management
This PDF document identifies and defines seven key issues involved in nonprofit investment management: objectives, payout policy, asset allocation, manager selection, risk management, cost, and responsibilities.
https://www.commonfund.org/_catalogs/masterpage/principlesofnonprofitinvestmgmt.pdf

Nonprofit Asset Management: Effective Investment Strategies and Oversight
This book is a guide for effective investment management and oversight of endowments, foundations and other nonprofit investors. Although not aimed primarily for fundraising professionals, it provides valuable information to help fundraisers evaluate and oversee their organization's management of donor funds. It covers topics such as a simple framework for the oversight of assets, setting investment objectives, investment policy, asset allocation strategies, investment manager selection, alternative asset classes, and how to establish an effective oversight system to ensure the program stays on track.
http://www.wiley.com/WileyCDA/WileyTitle/productCd-1118004523.html

All About Financial Management in Nonprofits
This "free library" provides links to a multitude of information sources on topics such as basics and getting started; planning and cash management; financial statements, analysis, and reporting; and special topics such as cutting costs and lease versus buy.   
http://managementhelp.org/nonprofitfinances/

Financial Management Tools and Resources
The Council of Nonprofits website provides links to information sources on financial management, unrelated business income taxation, nonprofits and the new OMB uniform guidance, own your own costs, (mis)understanding overhead, and other related topics.
https://www.councilofnonprofits.org/tools-resources-categories/financial-management

Reporting Net Assets In Correct Columns
Financial statements of nonprofits display net assets (equity) in three classes: unrestricted, temporarily restricted and permanently restricted. This article clears up some of the confusing classification issues and reporting pitfalls that persist.
http://www.thenonprofittimes.com/management-tips/reporting-net-assets-correct-columns/?r=ig-mo

The 2015-2016 Nonprofit Accounting Insights & Analysis Survey 
This survey by Nonprofit PRO magazine reports information central to nonprofit accounting management, including the amount of time spent inside and outside an organization’s financial system pulling and manipulating data, and specific software features used to manage nonprofits.  
http://www.accufund.com/npo-survey/uncategorised/npo-survey

Outcomes Reporting
This survey found reporting on outcomes is made difficult for most nonprofits.
<http://thirdsectortoday.com/2015/10/29/survey-finds-reporting-on-outcomes-made-difficult-for-most-nonprofits/>

Operating Reserves

The AFP Fundraising Dictionary defines reserves as "assets set aside that usually represent a percentage of an organization’s operating budget for an emergency or other use." An operating reserve may be thought of as a "rainy day" fund--assets set aside to cover unforeseen expenses that may arise.  Compare: CONTINGENCY FUND

 

Members may find the AFP Fundraising Dictionary Online at:

http://www.afpnet.org/ResourceCenter/ArticleDetail.cfm?ItemNumber=3380

Note: You must be an AFP member to access the Fundraising Dictionary Online.

 

The following articles contain information about operating reserve policies and related material:

      Operating Reserve Policy Toolkit for Nonprofit Organizations -Sector Source  
 
     Operating Reserves | Sustainability | Nonprofit Management ...
 
     Operating Reserve Policy Toolkit - nccs2.org
 
     Operating Reserves Policy - Nonprofits Assistance Fund
 
     Nonprofit Fiscal Policies & Procedures - Compass Point ...
 
     Operating Reserve and Investment Policy - Colorado Nonprofit
 
     About Operating Reserves for Nonprofits | Nonprofit ...

The Nonprofit Operating Reserves Initiative and the ...

 
     Operating Reserves - National Council of Nonprofits


Readers may also wish to consult the following book available for sale in the AFP online store:

Developing Fundraising Policies and Procedures, Best Practices for Accountability and Transparency