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HR Management
June 18, 2021
While the nonprofit sector is dedicated to serving those in need, without encompassing diversity, equity, and inclusion (DEI) into their governance and operations, they risk...
Read MoreAboutDiversity, Equity, and Inclusion in Nonprofit Organizations
Nonprofit Management
June 14, 2021
With the rise of smartphones, social media and other digital channels, nonprofits now have more tools available to them for engaging donors than ever before.
Read MoreAboutFour Best Practices to Improve Donor Engagement
Nonprofit Management
May 27, 2021
Nonprofits across the country were forced to pause, pivot and make remarkable changes to their in-person events last year due to the unprecedented circumstances of COVID-19....
Read MoreAbout2021 Virtual Event Best Practice Tips
Nonprofit Management
April 16, 2021
In today’s talent-based economy, an organization’s workforce is one of its most important tangible assets. Despite its importance, this asset is often not carefully planned,...
Read MoreAboutA Workforce Strategy Designed to Help Push Your Nonprofit Forward
Nonprofit Management
December 18, 2020
This year, UST has been busy creating a plethora of timely and relevant resources designed specifically to help the nonprofit sector navigate the many unknowns presented by ...
Read MoreAboutUST's Most Popular 2020 Content
Nonprofit Management
December 02, 2020
This short 30-minute on-demand webinar features tools and resources that can help nonprofit employers streamline HR processes and stay compliant with state and federal regul...
Read MoreAbout[Webinar Recording] Supporting Nonprofit Sustainability During a Crisis
Nonprofit Management
November 04, 2020
As we continue social-distancing—heavily relying on virtual resources—large-scale events have taken on a whole new look and feel.
Read MoreAbout2020 Virtual Event Best Practice Tips
Nonprofit Management
October 15, 2020
UST's latest interactive webinar series, "UST Live," brings the collective expertise of reputable nonprofit leaders to you—live&#x2014...
Read MoreAbout[Webinar Recording] UST Live: Developing a Sustainable Strategy for 2021
Nonprofit Management
April 03, 2020
While in the midst of a global emergency, the current COVID-19 pandemic, nonprofits are challenged with how to successfully continue managing their mission-driven brand.
Read MoreAboutHow to Manage Your Brand During a Global Emergency
Nonprofit Management
March 12, 2020
Capacity building is an investment in the effectiveness and future sustainability of your nonprofit organization–does your nonprofit have the ability to deliver a...
Read MoreAboutThe Benefits of Nonprofit Capacity Building
Nonprofit Management
February 20, 2020
Social media continues to prove to be an essential part of a nonprofit’s marketing strategy. A key benefit of social media is that it offers new forms of communication and t...
Read MoreAboutFive Steps to Achieve Social Media Capital for Your Nonprofit
Nonprofit Management
January 29, 2020
When marketing in the nonprofit sector, it can be a difficult road to navigate. With more than a million nonprofit organizations registered in the U.S., it can be challengin...
Read MoreAboutFive Obstacles Marketers Encounter in the Nonprofit Sector
Nonprofit Management
December 10, 2019
It’s that time of year again when we can expect to experience some inclement weather conditions across the states. When severe weather interferes with the day-to-day operati...
Read MoreAboutWinter is Upon Us - Prepare your Nonprofit Now
Nonprofit Management
September 11, 2019
What is a KPI? A Key Performance Indicator (KPI) is “a measurable value that demonstrates how effectively a nonprofit (or another type of organization) is achieving its key ...
Read MoreAboutHow KPIs Benefit a Nonprofits Success

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HR Management
June 18, 2021
While the nonprofit sector is dedicated to serving those in need, without encompassing diversity, equity, and inclusion (DEI) into their governance and operations, they risk...
Read MoreAboutDiversity, Equity, and Inclusion in Nonprofit Organizations
HR Knowledge
June 04, 2021
As states begin to loosen their social distancing restrictions, nonprofit employers are beginning to strategize a return-to-work plan while staying compliant with state, loc...
Read MoreAboutUST Workforce Re-Entry Toolkit
HR Knowledge
May 21, 2021
People-related risks within an organization can range from bad hires and misconduct to harassment and lack of diversity in the workplace.
Read MoreAboutPeople Risk Management Toolkit
HR Knowledge
May 17, 2021
When looking at the current work environment, we can see that it requires flexibility, being open to new skills and navigating new ways of working.
Read MoreAboutPreparing Your Nonprofit Workforce for the Future of Work
HR Knowledge
May 06, 2021
Question: An employee has reported that another employee made a racially insensitive comment in the break room in front of several people.
Read MoreAboutHR Question: Handling Racially Insensitive Comments
HR Knowledge
April 29, 2021
Welcome to the inaugural issue of UST's Quarterly Nonprofit Digest, a bite-sized overview of the employer strategies, sector statistics, and resources that UST share...
Read MoreAboutUST Quarterly Nonprofit Digest: Employee Engagement Strategies
HR Knowledge
April 12, 2021
Question: We are looking to hire millennials in an effort to create a more dynamic workforce. What are other companies doing in terms of workforce standards, benefits, polic...
Read MoreAboutHR Question: Creating a Dynamic Workforce
HR Management
March 25, 2021
You only get one shot at a first impression... In an effort to help nonprofit leaders strengthen their employee onboarding process—making new hires feel welcome, ...
Read MoreAboutEmployee Onboarding Toolkit
HR Knowledge
March 15, 2021
The employee experience is how employees feel about what they encounter and observe over the course of their employee journey at a nonprofit organization—involvin...
Read MoreAboutAn Overview of the Employee Experience
HR Management
February 26, 2021
Last year, as employers continued to grapple with the ongoing impact of COVID-19, UST surveyed more than 165 nonprofit employers across the U.S. to uncover the latest sector...
Read MoreAbout2020 Nonprofit Workforce Trends Infographic
HR Knowledge
February 18, 2021
What is inclusion in the workplace? Inclusion is defined as a proactive approach in the recruiting and engaging of people with different perspectives, backgrounds, and demog...
Read MoreAbout4 Ways to Help Build an Inclusive Work Environment
HR Management
January 29, 2021
Nonprofits had to react quickly and adapt their internal processes when the Coronavirus hit last March—one being how they hired and onboarded new employees.
Read MoreAbout[Webinar Recording] Virtual Onboarding Strategies for Nonprofit Employers
HR Knowledge
January 15, 2021
While remote work was on the rise even before the COVID-19 pandemic, most employees taking advantage of working from home still had some form of in-person relationship with ...
Read MoreAboutHow Remote Working Impacts the Future of Talent Acquisition
HR Knowledge
December 09, 2020
The ongoing COVID-19 pandemic has created new and unique challenges for employers and their employees. Group health plans and other employee benefit plans are one area of co...
Read MoreAboutCOVID-19 and Employee Benefits Plans Q&A
November 23, 2020
The Coronavirus has presented a whole new set of challenges to the nonprofit sector—one of the most prevalent being the impact of unpredicted unemployment costs.
Read MoreAbout2020 Risk Management Toolkit for Nonprofit Employers

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The Importance of Understanding Your Nonprofit's Cash Flow

Understanding the concept of the “business model” for your nonprofit has become a more integral component to maintaining organization sustainability within the nonprofit sector. Nonprofit leaders, grant makers and stakeholders want more insight behind the business and financial foundation of how a nonprofit organization is able to deliver according to their mission drive initiatives.

When discussing the nonprofit business model, often times it will include topics such as, cost to deliver services, mix of sources of funding, and key drives of financial results. Discussions around the financial stability and sustainability, more times than not, focus on the overall health of the balance sheet and operating results of a nonprofit. While each of these are essential components to have a better understanding of an organization’s finances and business model, these types of conversations can lose sight of a critical part of any business—the day-to-day operations. For example, the way a nonprofit organization does business can have a major impact on cash flow.

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a nonprofit’s ability to create value for shareholders in determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow. Managing cash flow is primarily consisted of questions: when will we pay our staff; when is this bill due and when will this grant payment come in? While there are variety of nonprofit business models, each one has a particular bearing on these types of questions.

A nonprofit business model has two main components: what kinds of programs and services nonprofits deliver, and how they are funded. Each of these components have implications on organizational cash flow that should be understood in order to have effective financial planning.

Below are a few helpful strategies to use when addressing cash flow issues:

1) Understand where funding is coming from: Each type of income stream can have certain implications and challenges for cash flow, so if a business model is built primarily around one type of funding, you will need to understand and plan for those implications and challenges.

2) How to balance cash going in and out: In order to meet operating cash needs in the absence of adequate cash reserves, a nonprofit can turn to a line of credit to meet the temporary imbalance between available cash and expenses due. Credit lines, when used responsibility, can be a useful and vital tool for cash flow management.

3) How to manage cash across your organization: While it may be impossible to ensure that cash is coming into the organization exactly on time and on target to keep things on autopilot, it is possible to plan for those times when it isn’t, and make decisions to be sure that bills and staff are paid on time.

Being informed, strategic, and collaborative in cash flow management can help to ensure that a nonprofit’s long-term strategy isn’t hindered by avoidable and short-term obstacles.  

For more information on this topic, please reference this article: https://www.propelnonprofits.org/resources/managing-cash-flow/

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