Nonprofits face many unique challenges when compared to other sectors. One hardlined reality? Nonprofit finances are susceptible to a high level of scrutiny. The general public, donors, and governmental authorities can all be sources for an eagle-eyed analysis of a nonprofit’s financial records.
As a CPA and financial advisor to nonprofit associations and organizations, this certainty is at the heart of a recommendation I give all of them: yield the power of financial transparency.
A CPA who understands what nonprofits are up against can advise their clients on how to accomplish financial transparency and why having it is a best practice.
Here are three outcomes nonprofits leaders can achieve through financial transparency and how the right CPA can help you get there.
Increased Donor Trust and Engagement
Nonprofits rely heavily on donations to achieve their mission. And point blank, donors are more likely to give to nonprofit organizations that are transparent about their finances. Clear and accurate financial reports that are easily accessible to your donors builds trust and increases engagement.
As a Nonprofit CPA, I can help ensure that your nonprofit’s financial reports are accurate and transparent, giving donors confidence in your organization’s financial management.
In fact, our firm has a 100% success rate in obtaining clean financial statement audit opinions for all of our clients.
Complete Regulatory Compliance
Having a tax-exempt status means that nonprofit organizations are subject to specific financial reporting regulations. This includes the required IRS Form 990, which provides an annual record of a nonprofit’s activities, governance, and detailed financial documentation. Regulatory compliance demonstrates a nonprofit’s commitment to financial transparency and accountability and keeps your organization free from the burden of an audit or worse yet, unfavorable media attention.
As a Nonprofit CPA, I can help ensure that your nonprofit organization is in compliance with all required regulations and that you are providing accurate financial reports to all stakeholders.
Greater Organizational Success
Accurate and clear finances is a huge win for the organization’s leadership, by showing the results of their work and the financial position of the organization. It allows a nonprofit’s leadership to make fully-informed decisions. Allocation of the resources, budget considerations, and program delivery are all impacted by clear and accurate financials. Transparency makes the picture clear so the board can understand the financial health of the organization, and ultimately, make a greater programmatic impact.
CPAs that have experience with nonprofits can help make those financial records clear, identify potential problems or areas for improvement, and recommend strategic choices that are aligned with the organization’s mission and goals. And by doing so, they achieve greater organizational success.
Nonprofit organizations need the support and advice of a qualified Nonprofit CPA in their corner. Our team at Lumix knows the nonprofit sector and can help you achieve financial transparency for the health of your organization and to reach more of those you serve. Contact us today to schedule a consultation.