When it comes to managing nonprofit finances, the call for greater transparency and accountability is growing stronger.
Just as financial analysts and credit rating agencies scrutinize a corporation’s financial performance to make recommendations, charity evaluators are diving deeper into nonprofit results—and they’re expanding their evaluations and criteria to include the tracking and reporting of non-financial performance and outcome metrics.
Why are outcome measures so important? Nonprofit organizations are experiencing more competition for funding than ever before. Donors and grantors have higher expectations. Often, gifts and grants come with stipulations for performance because the givers want to ensure that their dollars are getting the greatest possible return on investment. Government funding, as well, has strengthened compliance reporting and performance expectations. Implementing strategic outcome measures not only helps a nonprofit to meet compliance requirements, but also strengthens its reputation while assuring current and prospective donors that the organization is efficient, proactive and a good steward.
What’s more, charity evaluators, such as Charity Navigator, have embraced outcome reporting and will be rating nonprofits based not only on financial reporting and analysis, but also on their tracking and reporting of outcomes – dramatically raising the standard for all nonprofit organizations. Face it, outcome metrics are an enormous part of improving overall visibility and performance for today’s nonprofits. Keep in mind, when it comes to outcome metrics, you want to define the key metrics that best measure what is most important to your mission. Don’t get lost in the weeds with tactical issues such as ‘Who will measure what—and when?’ The details and processes follow naturally – especially when you use a modern financial system to make it easy. Take advantage of external resources to get up to speed quickly.
You may have too few or too many metrics, but consistent progress brings success.
For so many nonprofits today, the day-to-day tasks of accounting and financial management are driven by a diverse array of complexities. Sage Intacct, in an exclusive relationship with GuideStar, the world’s largest source of nonprofit information, earlier this year unveiled the new Sage Intacct Nonprofit Financial Board Book powered by GuideStar. The Sage Intacct Nonprofit Financial Board Book is built on the Sage Intacct platform and incorporates the best practice metrics and insight that GuideStar uses to demonstrate the financial health of nonprofit organizations, as well as ensure the organization in on track in accomplishing their missions.
- It’s a real-time strategy tool that meets the specific needs of nonprofit organizations.
- It works with real-time transactional data from the system of record – automating the calculation of key financial and operational metrics important to nonprofit organizational health.
- Key metrics such as revenue composition, liquidity, and unrestricted cash are displayed via pre-built dashboards to show financial health over time.
- Metrics are automatically calculated using balance sheet, revenue, and expense data from Sage Intacct, and through additional operational sources from within the organization, including Donor Management Systems, Budgeting and Planning software, Payroll, and more.
- The Sage Intacct Nonprofit Financial Board Book helps to spur conversation and analysis, while real-time delivery eliminates delays in monitoring vital metrics – improving the organization’s ability to respond to unplanned changes in funding.
With the Sage Intacct Nonprofit Financial Board Book powered by GuideStar, nonprofits can gain real-time visibility into key revenue composition and source, monitor organization health with key metric visualizations, as well as easily track trend lines and changes for a more complete picture of financial health – all the while informing planning and strategy for proactive management.