From Deficit to Surplus: Transforming Financial Health for an Urban Faith Center

A large faith-based nonprofit in a major U.S. city faced significant financial challenges. Despite strong community engagement and a committed leadership team, their budgeting process lacked clarity and cohesion, leading to a six-figure year-end deficit and severe cash flow issues that affected payroll and operations. With inaccurate revenue projections and years of uncollected dues on the books, they needed a reset—not just a band-aid.

The Challenge

When the organization reached out to Kiwi Partners, they were experiencing: 

• A lack of clarity in budgeting and spending processes

• Inaccurate revenue projections based on ideal membership contributions rather than actual cash flow

• Accumulated unpaid dues inflating their expected income

• Cash shortages that jeopardized payroll and severance payments

  
  

Our Approach

We began with a comprehensive review of their budgeting and revenue tracking methods. We identified key areas for improvement and made several strategic recommendations: 

1. Realistic Revenue Projections

   Instead of relying on membership revenue based on the number of congregants multiplied by the annual dues rate, we advised using actual cash collections from the previous year to project membership revenue for the coming year’s budget. This approach provided a more accurate financial picture and accounted for non-renewing members. 

   
   

2. Conservative Budgeting

   We suggested adjusting revenue projections conservatively, especially when increasing membership dues, to account for potential drop-offs or non-renewals. 

   
   

3. Expense Management

   We emphasized starting the budgeting process with confirmed revenue figures and then aligning expenses accordingly. This included making tough but necessary cuts in both staff and non-salary expenses to ensure financial stability. 

   
   

4. Debt Write-Offs

   We advised the organization to write off long-overdue unpaid dues that had inflated the budget unrealistically, recognizing that these amounts were unlikely to be collected. This move clarified their true financial position and helped leadership plan more effectively.

   
   

The Results

In less than a year of implementing these changes, the faith center experienced a remarkable financial turnaround. They moved from a six-figure deficit to a six-figure surplus, marking a $1,000,000 improvement from the previous year’s deficit. More importantly, they developed stronger internal controls and budgeting practices to prevent similar challenges in the future.

This success story highlights the impact of strategic financial management and realistic budgeting in transforming the financial health of nonprofit organizations. The involvement of a trusted third party brought critical objectivity, helping leadership navigate difficult moments and make tough decisions with clarity and compassion.

Even mission-driven organizations with dedicated leadership can find themselves facing financial uncertainty. But with the right support and strategy, a turnaround is possible. Our expertise in nonprofit accounting enabled the faith center to achieve financial stability and continue serving their community effectively. 

At Kiwi Partners, we specialize in helping nonprofits build smarter budgets, implement better processes, and regain financial control. If your organization is facing similar challenges, we’re here to help.

👉 Ready to strengthen your nonprofit’s financial foundation? Contact us to speak with an expert.

Richard Hetherington, CPA, MBA, joined the Kiwi Partners team in 1999 and has over twenty-six years of experience across the legal, financial, and nonprofit sector. Richard has provided CFO services to over 60 nonprofits clients, providing strategic financial oversight and collaborating closely with internal accounting teams to strengthen financial operations and reporting. Richard is conversant with many software packages and accounting packages such as Sage Intacct, Fund EZ, QuickBooks, Financial Edge, Great Plains, BILL, Expensify and iMIS membership database. 

Read Richard's Bio