According to the report The Next Generation of American Giving, when donors are looking for financial information on nonprofits, the top two things they look for are financial efficiency (70%) and the impact of their donation (59%). Donors care about financial stewardship and they also care about being able to clearly see the impact of their donations.
Nonprofits are unique—there are no stockholders or owners. Instead, you have donors. You promise donors you will use their donations to further your mission, and you have a responsibility to follow through on that promise and to be good stewards of their resources. Donors want to hear about the results you achieved, and they also want to know your organization is financially secure. Who wants to donate to an organization that goes out of business the next year?
Learn more: Register for Blackbaud University’s “Best Practices: Finance–Organizational Collaboration” online class.
Everyone in your organization plays a part in financial stewardship, but the roles of finance and development are prominent. Development raises the money. Finance manages the money. Development reports back to donors how the money was used. A strong and strategic relationship between development and finance ensures your organization is accountable to donors, so you can keep the donors you have, attract new ones, and be successful in achieving your mission.
Here are a few ways development and finance can support each other:
- Development involves finance in building case statements and donation solicitations. Being accountable to donors starts with the promise you make when you ask for a gift. Your solicitations should be as clear as possible when stating what you will do with donations received. Finance can help answer key questions like: How much money do you need for this project? What happens if you receive more donations than you need? What exact language should be used? Having finance involved from the beginning helps avoid conflicts surrounding these issues later.
- Development focuses on raising unrestricted funds. This can be a challenge, but unrestricted funds provide your organization with the most flexibility. Restricted funds fuel your programs, while unrestricted funds fuel your growth. Unrestricted funds can be used to build infrastructure and innovate. Your finance team can feel good knowing funds are available that can be used for any purpose.
- Finance supports investment in development and communications. It takes time and money to build relationships with the donors that make the work of your organization possible. Development and communications are increasingly intertwined, as getting information out about the donor’s impact is a priority. Audiences have high expectations for communications—they want them to be quick, professional, and personalized. Proper resourcing for development and communications should be in the budget.
- Finance inspires confidence in leadership’s financial management. Sharing financial information is good. Sharing financial information that shows leadership had a solid plan, where the budget and actuals match, is even better. Include details—both numbers and narratives—about your finances on your website, in annual reports, and in other marketing materials.
Ready for more organizational best practices that will help you have a greater impact? Sign up to learn about Blackbaud University’s 20+ Organizational Best Practices courses designed to give you the skills you need to stay on top of trends in the social good community.
I find a good relationship between Development and Finance is essential fundraising.
Yep! So grateful we have a good relationship with our Finance people!
I totally agree. You have to work closely and well with your Finance people. After all, fundraising is built upon good relationships.
Agree with all these points!
This is terrific: Restricted funds fuel your programs, while unrestricted funds fuel your growth.
I’m really grateful I have such a good relationship with finance!
Teamwork!!
Great information, thank you!
I work in Development and collaborate with our accounting department to ensure our GuideStar page is up to date and accurate. When I need 990s for our profile, I simply ask accounting. We have a good relationship between Develoment and Finance. Thanks for the post!
Having a well defined budget, can help focus development efforts.
Our Finance & Fund Development staff work together as a Team. Some of the staff have responsibilities in both departments. We meet weekly to keep all of us on the same page.
good communication and clarification/understanding of the terminology between the two departments is important
Good!
the only way to succeed is to have cooperation between development and finance.
It is crucial our partners in mission office and finance office see eye to eye. Some conversations may be tough, but necessary to handle the donors request in the way they request it. Sometimes it is hard for finance to understand as they follow different guidelines than we do.
Fuel your programs vs. fuel your growth is something unbalanced here and needs work. This reminds me to start pushing that phrase.
Great point on unrestricted gifts!
Spot On! Communication through the entire process is essential.
Fundraising, Marketing, Communication, and Finance should be best friends and work together as a team.
This is something we need to work on
Thank you for sharing your incite!
ugh Insight I meant INSIGHT!
No matter what, do not let Finance dictate how you set up your campaigns, appeals, or other code tables. Consider their input and reporting needs for sure, but remember that fundraising software is meant to support fundraising efforts.
Very good points.
Great article, good points
Love the fuel analogy – we’ll have to borrow that phrasing!
Even though we work closely with our Finance Dept. I never thought about including them in building our case statements. Great food for thought!
We have a great relationship with our finance team, one that is essential for meeting our fundraising goals
Exactly! Most of my professional career has involved difficulty between the two departments. Thank you for clearly laying out paths forward.
I will be sharing this article with my team and encourage them all to take the training. Thank you!
I completely agree! We have a very good relationship with our finance office.
One organization I work with has Finance and Development teams that work well together but use separate systems for tracking funds. The bottom line number is always the same but they generally have descrepencies in the details, mostly due to categorizing (individual vs. foundation vs. corporate, etc.). Any suggestions to more easily keep everyone on the same page?
Good article – and exactly right.
“Having finance involved from the beginning helps avoid conflicts surrounding these issues later.” This is so true, especially when you have program people also working on proposals. Let’s work together!
Agree completely about working together to meet our goals.
Couldn’t agree more!
Good synopsis of the differences!
Very important concept. Teamwork makes the dream work.
Thank you. One cannot underestimate how important it is for Finance and Development to work closely together and to understand each other.
Fairly new CFO – hoping for same continued positive working relationship with finance.
Teamwork makes all of our dreams work.
This is all good information that should be shared with the Finance department to assist them in understanding fundraising processes.
Great tips!
I totally agree! Finance role is a HUGE impact in fundraising development and communication efforts of the organization.
Positive and refreshing – two thumbs up!
Yes, working with Finance is important! Good article!
#2 FTW!
With Development and Finance both expected to report financial progress to the leadership team and board, ensuring both departments are on the same page and using the same language is crucial. Thank you.
Keeping our Finance department happy is critical! Thanks for the article
Communication and Teamwork so important
Good article.
A solid working relationship with the finance team is critical in any organization. We are blessed at our to have a very strong one. Thanks for sharing.
I love the emphasis on internal responsibility and financial accountability… it beats the alternative of the pressure coming from external forces. (Aka, your donors!)
Goodness
While our Development and Finance teams do work closely together, it seems like there’s always a bit of a communication gap when it comes to terminology and fund tracking expectations. I’d love to see a more in-depth webinar on how to bridge that gap with some emphasis on Raiser’s Edge and Financial Edge integration.
We could not complete our mission without the expertise of our Development and Finance Teams. Their relationships and ability to translate our work is critical.
Our finance team was open to working with us to make sure we have all the information about upcoming capital projects and ongoing needs that can be presented to donors. It is a win-win!
I’ve been lucky to always have good relationships with finance. It is critical to success for both offices and the organization as a whole.
Love the topics covered in this!