Cultivating Financial Confidence Across Your Nonprofit Team
How did you learn about nonprofit finance? We’re guessing it was the hard way – you probably never had a class, and you probably started out feeling lost or behind. Maybe you had a colleague who took you under their wing, or maybe you studied on the down low, embarrassed to admit you didn’t know a P&L from a balance sheet. And we’re also guessing it’s the same for your employees today. It’s not your fault; nonprofits have never been great at helping teams learn the foundations of finance. But that stops now. You’re about to ensure basic financial literacy across your organization!
The journey to financial literacy begins with a commitment to integrate this know-how into your organization’s culture. This means moving beyond the occasional seminar or memo and embedding financial understanding into daily operations and conversations. Your goal is to create a culture where financial discussions are not confined to the finance department but are a part of regular team meetings and decision-making processes. Start today with simple tactics that any leader can use:
Mind the Psychology: Financial conversations can bring up feelings of “I’m not a math person” anxiety, complicated personal relationships with money, and feelings of inadequacy when it comes to seemingly complex subjects. Acknowledge this may be an intimidating area and make space for folk to share and learn without judgment.
Create a Cheat Sheet: Provide easily accessible information, such as flow charts, glossaries (be sure to include all those acronyms), and online tutorials, as a refresher on financial terms or concepts. These resources should be user-friendly and tailored to the specific context of your nonprofit.
Head to Class: Organize ongoing training sessions tailored to different levels of financial expertise. These sessions should cover fundamental aspects of nonprofit finance, including reading and understanding budgets, basic accounting principles, and financial statement analysis. They should be engaging and interactive; use real-life scenarios and examples from your organization to illustrate key concepts. And, if you can find someone who’s not from finance to lead the session, you’ll boost morale and an understanding that finance is not just for the “math people.”
Budget Discussions should be Inclusive and Interactive: Encourage open discussions about the budget and financial decisions at team meetings. This practice demystifies the budgeting process and helps staff understand how their roles and responsibilities tie into the broader financial picture. (And ensure your less experienced staff have a seat at the table! Their pride in ownership will be palpable, and they’ll become more invested and accountable for the financial implications of their work.)
With these steps you’ll create a team that’s ready to take ownership of your organization’s financial health. They’ll know that finance is no longer a mysterious function, separate and apart from their work, but rather their best toolbox when it comes to serving your mission.