Kick off the New Year with a Head Start on Your Form 990 Filing As…
The financial health of your organization remains at the core of your work. Not because money makes the world go round. But because without it you will be spending your time filling the funding gaps and chasing cash. Instead of fighting oil companies or city hall.
Over the next three weeks, you’ll learn the three key’s to your organization’s financial health. Think of them as the three things every health care provider tells you do to maintain your own health. The equivalent of brushing your teeth, eating your fruits and vegetables and exercising.
Social scientists tell us that it’s easier to start new habits than to break old ones. Once you start these new habits you’ll wonder how you ever lived without them.
1) Don’t borrow from your future by spending grant funds too quickly.
If you receive a one-year grant halfway through your fiscal year, you should plan to spend only half the grant in this year’s budget and save the other half for next year’s budget.
Most grant funds, especially general operating funds, will pay for ongoing costs like staff, rent, etc. If you spend the full grant in six months but have to wait 12 months for a renewal grant, then you’ve created a six-month funding gap. Ouch!
But it’s a lot harder to accomplish in practice. Because Generally Accepted Accounting Principles [GAAP] requires that the grant funds need to be fully recognized as income in the year given. And because QuickBooks doesn’t provide an automatic way for you to separate grant funds that you are saving for future years.
Technical Assistance can provide you with tools and language to show auditors how you’ve allocated your grant money and can also help you set up QuickBooks to separate the funds over two fiscal years.
Now that you know to spend your grant funds over their full time period, you need a way to track them. This spreadsheet will help you allocate your grant funds to the correct budget year. You can also use it to see how much of your foundation funding in your budget is committed, renewal, or prospective funding.
Members can also watch a Screencast that shows you how to keep your Grant Tracking spreadsheet updated.