Financial Management Case Study for Nonprofit Organizations

Financial Management Case Study for Nonprofit Organizations

Summary

Ready, Set, and Learn is a nonprofit preschool and daycare that provides a safe, comfortable, and educational haven for children of under privileged areas. It offers a place where parents can feel good about where their child is and know that they are safe as well as getting an education. They were having a hard time planning for unforeseen circumstances and did not have a good grasp on where their money went or what they should plan for.

The Background

Ready, Set, and Learn did not have a dedicated person handling the financial responsibilities of the organization and handled the finances as a group. They were in dire need of establishing financial controls and managing all financial aspects of its organization. In addition, there was a backlog of up to six months of financial information that had not been recorded or accounted for. They did not have a clear picture of their financial history and did not have a clear picture of what they expected for the new year.

The Solution

Ready, Set, and Learn began by creating a Financial Manager position. All of the back logged information was immediately logged. All of their expenses were tracked by categories. They established an annual budget and planned ahead for difficult financial times by developing a reserve fund. Internal controls were implemented to help prevent improper use of money and helps ensure cost control. Regular audits and financial reviews are conducted to ensue that the right tactics are in place and change anything that needs to be changed.

Lessons learned

Staying abreast of their organization's finances on a regular basis helped control costs, determine where their money was going, and where things needed to be changed. Establishing an annual budget and meeting regularly about it helped everyone understand the importance of fiscal responsibility.

This case study was prepared by Netta Dankel of the Center for Nonprofit Success. For more case studies on nonprofit management, visit the Center for Nonprofit Success website at: http://www.cfnps.org/research.aspx For a calendar of our upcoming seminars on nonprofit management, go to http://www.cfnps.org/education_calendar.aspx

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