financial

Changing lives through financial empowerment

posted by
Kristen Coco,
Program Developer
YWCA

In 2012, 25 percent of Americans had more credit card debt than they had in their emergency savings. With consumer spending fueling 70% of our nation’s economic growth, the need to consume commercial products has forever been a staple in American culture. As a society, we are constantly being bombarded with advertisements, all pulling us to spend money. With so much pressure to spend, how are we supposed to fight the debt that is overwhelming our country?

The answer lies in education. For the past six months I have worked with YWCA Maricopa County, expanding its Own It Financial Education program, which provides low-income women and families a free education teaching them how to become financially stable and independent. It has been amazing to see the impact financial literacy can have on a person, and just how crucial financial literacy is on the future of our young people.

Research Friday: Financial literacy: understanding money for today’s activities and tomorrow’s security

 

posted by
Pat Lewis,
Senior Professional
in Residence
ASU Lodestar Center


Welcome to Research Friday! As part of a continuing weekly series, each Friday we invite a nonprofit expert to highlight a research report or study and discuss how it can inform and improve day-to-day nonprofit practice. We welcome your comments and feedback.

You serve on a nonprofit board of directors. Or, you are a member of management for a nonprofit organization. You are expected to understand the organization's finances. And your role (board or staff) determines how you contribute to the overall security of the nonprofit with which you are affiliated.

When those who are responsible for an organization's overall fiscal management responded to a study by The Moody Foundation, it was found that nonprofits need to "fortify their financial skills to better forecast future needs, navigate economic instability, and manage risk."1 This study, Financial Literacy and Knowledge in the Nonprofit Sector (PDF), "engaged a random sample of primarily human service nonprofits, as well as health, civic, environmental, arts, and education nonprofits."2 Again, the study surveyed nonprofit financial managers such as CEOs and CFOs.

The report is divided into five areas of study: I) financial knowledge and literacy, II) indicators for programmatic and financial decision-making, III) the board role & governance, IV) controls and procedures for financial management, and, v) some closing thoughts.

Why should I learn about nonprofit accounting?

posted by
Thomas K. Avery, CPA
,
ASU Lodestar Center
NMI Instructor /
Chief Financial Officer
Catholic Community Foundation -
Diocese of Phoenix

Good question. As a nonprofit accountant, I hear this question asked often. Some of the objections to learning about accounting sound very reasonable at first, especially when there's no one around to express a contrary view. So, I'll step up to the challenge and face those objections head on.

“I don’t need to learn that stuff. We have an accountant in our organization who deals with it.”

It's a good thing if you have a knowledgeable accountant on the payroll who knows the ins and outs of nonprofit financial tracking. After all, not every organization has the luxury. If you're one of the lucky ones that does, be kind to that person and tell them that you really appreciate all that they do.

Why? Many organizations need and want an accountant on their payroll. If your accountant feels under-appreciated or undervalued, he or she may head for greener pastures, leaving you without a thorough understanding of the basics of your organization’s financial results. Your remaining staff members may need at least a small knowledge of the basics to link to the new person you hire. So, don’t rely too heavily on your accountant. Attaining good financial management skills will help ensure that your organization moves forward, even without him or her.

“My brain is not designed for numbers. I supervise people that do that.”

Some people have a better understanding of numbers, accounting principles, and so on. Were they born that way? We can’t say with certainty that there is or isn’t a gene for accounting. But most of the math work of accountants is elementary school math: addition, subtraction, etc.