Healthy nonprofit organizations employ financial management practices that build stability and flexibility both today and in the future

• Budgeting – Budgets matter because they provide the financial information to support all planning. Effective budgets are realistic, using sound assumptions and clear accountability to achieve those assumptions. A budget is a planning tool that is realistic and based on sound assumptions. Above all, budgets should be realistic, flexible, and consistent.
• Program Costs – Financial decisions rely on good information. It is essential that organizations understand the real costs of their programs in order to make decisions about fundraising needs, contract terms, and program expansion or modification.
• Overhead Costs – Nonprofits are required to account for functional expenses – program services and general/administration & fundraising (or overhead). While lower overhead expenses may sound better to donors, this emphasis is destabilizing and unsustainable. Make the case by reframing from “overhead” to “infrastructure.”
• Cash Flow – Day to day, cash in the bank to pay the bills often matters more than any financial statement or long-term plan. Cash flow can be monitored and managed with a few basic management tools.
• Financial Responsibility – Responsibility for making financial decisions and carrying out financial activities is shared throughout an organization. Responsibility needs to be supported with good information, frequent communication, and appropriate authority.
• Operating Reserves – Every nonprofit needs to have some cash in reserve in order to respond to an unexpected downturn or opportunity. Is there a golden number that every organization should maintain, and how can a nonprofit build reserves?
• Accountability and Transparency – Between the IRS, Attorney General, foundations, and donors, everyone is demanding information and answers about how nonprofits receive and use financial resources. This trend is accelerating and many nonprofits choose to make accountability an important organizational value.
• Responding to Financial Problems – Sometimes things go wrong – contracts are lost, fundraising plans flounder, and expenses skyrocket. Responding to financial problems requires strong leadership, good communication, creative planning, and decisive action.

• www.irs.gov - IRS website with important information on filing your 990 forms and for payroll forms and requirements
• www.NonpofitsAssistanceFund.org - This bi-monthly newsletter features financial management resources to help nonprofits create and maintain a financially healthy organization, shares stories of nonprofits who were able to overcome financial difficulty, highlights upcoming workshops, and keeps you up-to date on what we are up to at Nonprofits Assistance Fund.
• www.LegalZoom.com - website with affordable legal options including incorporation
  www.Entreprenuer.com - great information on starting a new business including how to write a business plan
• www.VLANY.org - website for Volunteer Lawyers for the Arts New York with great information on legal issues including contracts, copyright and more
• www.vlama - articles and resources on legal issues for artists and arts groups. Resources include the Artist Toolbox
  www.StarvingArtistLaw.com - legal resources, articles and more for the arts
• www.vlaa.org - articles and downloads on 990 forms, Managing Cash Flow, Anatomy of a Contract and more.