Key Takeaways from Nonprofit BoardCon: Essential Financial Tools and Documents for the Staff and Board

Kiwi Partner’s CFO Consultant Yury Beyzarov, recently participated as a panelist at Nonprofit BoardCon, sharing insights from over 20 years of experience in nonprofit financial leadership. The discussion focused on strengthening financial oversight, enhancing board governance, and leveraging technology to improve financial decision-making. Below are the key takeaways from the panel.

Establishing Clear Board Responsibilities

A well-defined board member agreement helps set expectations and prevent micromanagement. This agreement clarifies the board’s role in governance, ensuring members focus on strategic oversight rather than day-to-day operations.

Essential Financial Documents for Board Oversight

To effectively monitor financial health, nonprofit boards should regularly review these key documents:

1. Statement of Activity (Income Statement): Tracks revenue and expenses, ideally compared to the board-approved budget.

2. Statement of Financial Position (Balance Sheet): Shows the organization’s financial worth and stability.

3. Statement of Cash Flows: Highlights actual cash availability, ensuring organizations can meet financial obligations like payroll and rent.

Using Financial Data for Strategic Decision-Making

Financial reports should do more than meet compliance needs—they should drive strategic decisions. Boards can use financial data to:

• Align financial planning with the organization's mission and long-term vision.

• Analyze financial documents to identify critical programs and assess their sustainability.

• Avoid the assumption of year-over-year budget increases without evaluating impact.

  
  

Cash Flow Management and Budgeting Best Practices

• Cash flow projections should be reviewed regularly, using tools that provide real-time insights.

• Budgeting should be an 18-month rolling process, incorporating multiple scenarios:

  1. Best-case (full funding secured)

  2. Worst-case (significant funding loss)

  3. Mid-range scenario (moderate funding fluctuations)

• Leveraging cost-effective financial tools like Excel templates or QuickBooks integrations can improve cash flow monitoring.

Leveraging Technology for Better Financial Oversight

Nonprofits of all sizes can enhance financial transparency with technology:

• Smaller organizations: Boards can share financial oversight tasks among members.

• Mid-sized and larger organizations: Cloud-based accounting and budgeting software (e.g., Sage Intacct, Martus) can improve efficiency and reporting.

• Board collaboration: Using dashboards and automated reporting tools ensures real-time access to financial data, reducing errors and manual work.

• Scenario Planning: Modern budgeting software enables nonprofits to prepare for funding fluctuations and make data-driven decisions.

Strengthening Board and Financial Committee Collaboration

• Boards should receive regular financial updates (monthly statements of income, quarterly financial reports) with a focus on key trends, rather than excessive details.

• Financial transparency is key—Boards should be notified of potential issues early to prevent surprises.

• The Finance Committee should work closely with the executive team to determine reporting needs and key financial indicators.

Auditing and Compliance: A Proactive Approach

• Boards should actively engage with auditors, asking about financial health benchmarks and best practices.

• Organizations should leverage audit insights to strengthen internal controls and financial policies.

• Finance teams should engage auditors year-round to avoid surprises during the formal audit process.

Balancing Profitability with Mission-Driven Goals

• Nonprofits must generate surpluses to sustain their mission and remain resilient in economic downturns.

• Financial reserves should be strategically allocated for operational stability, technology investments, and infrastructure needs.

• Maintaining at least 90 days of cash reserves is recommended to safeguard against funding gaps.

Final Thoughts: The Role of the Board in Financial Leadership

• Board members should focus on governance and strategy, leaving day-to-day financial management to executive leadership.

• Engaging program staff in financial planning ensures a mission-driven budgeting process.

• Technology adoption should be viewed as an investment, not an expense, to improve decision-making and operational efficiency.

  
  

By implementing these strategies, nonprofit boards can strengthen financial oversight, enhance decision-making, and ensure long-term sustainability.

About Yury Beyzarov

Yury joined Kiwi Partners in 2022 with 20 years of financial experience in the private and nonprofit sectors, including leadership roles at Citigroup, JP Morgan Chase, and MetLife. Prior to Kiwi Partners, Yury led a $140M budgeting process at a national nonprofit, implementing financial software that cut the budgeting timeline by 50% and reduced expenses by 15%. Yury's Bio.

For expert guidance on optimizing your nonprofit’s financial oversight and leveraging technology, contact Kiwi Partners today.