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Financial Management

Nonprofits have an obligation to act as responsible stewards in managing their financial resources and must always comply with all legal financial requirements. They should adhere to sound accounting principles that produce reliable financial information, ensure fiscal responsibility and build public trust. Nonprofits should use their financial resources to accomplish their missions in an effective, efficient manner and establish clear policies and practices to regularly monitor how funds are used.
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 Staff Recommended
A Board Member’s Guide to Nonprofit Overhead
Blue Avocado
Article/Blog, Guide/Tool
A helpful overview of key issues related to nonprofit overhead, including what counts as overhead, how different charity watchdogs report overhead, tips for allocating expenses appropriately so you don't over-represent your true overhead costs and more.
Accounting Manual Template
California Association of Nonprofits, Blue Avocado
Sample/Template
A sample accounting policies and procedures manual designed for nonprofit organizations with an Executive Director/CEO, Operations Director/Finance Director and Bookkeeper involved with accounting processes.

 
Accounting Policies and Procedures Manual
California Association of Nonprofits
Sample/Template
A sample accounting policies and procedures handbook.
Accounting Software
Article/Blog, Guide/Tool
The following reference documents are helpful when determining what accounting software is right for your organization.
Accounting Standards for Nonprofits
Article/Blog, Guide/Tool, Video/Tutorial
Due of the nature of their work, charitable organizations are expected to uphold principles of transparency and accountability. Fund accounting is a crucial part of that effort because it allows nonprofits to track every dollar spent back to the original funding source to ensure that donor intentions were met.
American Institute of Certified Public Accountants
Organization/Agency
Financial management support institute and the umbrella organization for the Maine Institute providing resources including legal information, rules, effective practices and a "nonprofit toolkit" for Boards and, in particular, their financial and audit committees.
Appealing a Late Filing Penalty
Article/Blog, Guide/Tool
Nonprofits that fail to file their annual return with the IRS (Form 990, etc.) are subject to penalties and fees.
Staff Recommended
Audits, Compilations and Financial Reviews
Article/Blog, Guide/Tool, Sample/Template
The following resources provide a thorough overview of financial audits for charitable nonprofits, including what an audit is, who should have one, audit alternatives, state by state requirements, the role of the board/audit committee, and a step-by-step approach to managing an audit.
Balance Sheets
Propel Nonprofits
Article/Blog
These resources provides a good overview of a balance sheet - also called the Statement of Financial Position - and outlines six key measures useful to all types of nonprofits
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Beyond Financial Oversight: Expanding the Board’s Role in the Pursuit of Sustainability
Nonprofit Quarterly
Article/Blog
This article examines the role of the board of directors in establishing organizational sustainability.
Board Treasurers
Article/Blog, Sample/Template
These articles provide guidance to help nonprofit board treasurers be successful in their role.
Boards and Financial Management
Minnesota Council of Nonprofits
Article/Blog
Learn about the financial responsibilities of a nonprofit board.
Budgeting for Nonprofits
Article/Blog, Guide/Tool, Sample/Template
The following resources provide suggested strategies, schedules and tips for the annual budgeting process, including budgeting for programs, projecting cash flow, and more.
Building an Equity Lens into Nonprofit Finance
One place to look for tangible evidence of any individual’s or group’s priorities and values is to look at where they spend their money. This article offers nonprofits--and their stakeholders--suggestions on how an equity lens can be applied to many aspects of nonprofit finance and budgeting.
Business Resource Guide
Maine Department of Economic and Community Development
Guide/Tool, Organization/Agency
The mission of Maine’s Office of Business Development is to encourage business growth and
retention in Maine. They offer a variety of guides and support to help business people understand the resources available including, Tax Increment Financing, Community Block Grants, and multiple tax credit programs.
Changing Your Organization’s Address
If your nonprofit organization changes its address you'll need to notify both the Secretary of State's office (if you are incorporated in Maine) and the IRS.
Checklist for Developing an Evaluation Budget
Evaluation Center
Guide/Tool
A guide to help nonprofits budget appropriately for evaluation activities.
Community Associations Institute
Organization/Agency
This is a national organization that supports community associations including nonprofits like homeowners associations, road associations and condo associations. While these kinds of associations share many things in common with charitable nonprofits, this organization is able to provide resources more targeted to these types of associations. Resources and tools include governance guidelines, information on disaster preparedness and recovery, and a "reading room" with articles on topics such as insurance and risk management, governance, homeowner resources, maintenance, meetings and more.
Staff Recommended
Conflict of Interest
Article/Blog, Sample/Template, Video/Tutorial
Maine's Nonprofit Corporate Act defines conflict of interest transactions and the IRS Form 990 asks organizations to indicate whether they have adopted a conflict of interest policy. While having a written policy is not legally required, it is a strongly recommended practice and the IRS may increase their scrutiny of returns from organizations that have not adopted recommended policies. The following resources will help you understand this topic. The sample policies provide a basis from which nonprofits can create their own policy, and are not intended for verbatim use without careful review.
Dashboards
Article/Blog, Sample/Template, Video/Tutorial
A dashboard is a tool for visualizing data. Some dashboards show performance over time while others provide a snapshot of  a particular aspect of a business. An effective dashboard illustrates rather than tells the audience about areas that need attention or action. There are diverse applications of and approaches to dashboards, and the following articles provide helpful tips and samples.
Directors and Officers Insurance (D&O)
Article/Blog, Guide/Tool, Periodical, Video/Tutorial
Directors and Officers Insurance, commonly called D&O Insurance, offers protection against a breach of "duty" by the directors and officers. Whether or not to carry this kind of coverage can be a complicated question. The following articles provide information to help nonprofits decide, and offer advice on finding coverage.
Staff Recommended
Dissolving a Maine Nonprofit
MANP
Some nonprofits must make the painful decision to close their doors. MANP provides the following resources and recommendations to help Maine nonprofits navigate the decision to dissolve and the dissolution process.
Staff Recommended
Document Retention Policies
Sample/Template
The following samples can help your organization craft its own document retention and destruction policy. They are not intended to be used strictly verbatim without careful review.
Endowments
Article/Blog, Guide/Tool, Sample/Template
Is your organization considering creating an endowment? Endowments are one way to create sustainability for your organization to continue its mission, but are not the right fit for everyone. These articles outline common myths, and provide suggestions organizations should consider when creating and managing endowments.
Exempt Organizations Update
IRS
Newsletter
Periodic newsletter with information for tax-exempt organizations and tax practitioners - attorneys, accountants, and others - who represent them.
Expense Reimbursement Policy
Minnesota Council of Nonprofits
Sample/Template
Form 990 asks organizations to indicate whether they have adopted an expense reimbursement policy. While this policy is not required, it is recommended and the IRS may increase their scrutiny of returns from organizations that have not adopted recommended policies. This sample provides a basis from which nonprofits can create their own policy, and is not intended for verbatim use without careful review.
FAQs for Tax Exempt Organizations
IRS
Guide/Tool
Comprehensive answers to frequently asked questions regarding tax exemption and everything related.
Federal Employment Taxes
IRS
Guide/Tool
Nonprofit tax-exempt organizations – even those operated by volunteers – must be aware of employment tax issues. Exempt organizations normally withhold and pay employment taxes under the same rules as other entities. This guide provides an overview of the employment tax issues nonprofits need to be aware of.
Federal Register
Organization/Agency
The Federal Register provides access to the official text of federal laws, presidential documents, and administrative regulations and notices.
Financial Crisis Assessment
Foraker Group
Guide/Tool
This tool helps organizations spot if they're in financial crisis crisis or coming close to one.
Financial Leadership
Nonprofit Assistance Fund
Guide/Tool
There is a world of difference between financial management and financial leadership, and refocusing your approach from fiscal management to fiscal sustainability gets you there. Outlined in this guide are such essential steps as: transforming your annual budget analysis; deciding whether or not income diversification is the way to go; achieving a robust reserve; and equipping your board for effective financial governance.
Staff Recommended
Financial Management
National Council of Nonprofits
Guide/Tool
A great collection of resources related to how boards can become financially literate, managing cash flow, and the financial management policies and procedures a nonprofit needs.
Financial Policies and Procedures Handbook
Nonprofit Financial Center
Sample/Template
An example of all types of financial policies and procedures.
Financial Policy Guidelines and Example
Propel Nonprofits
Guide/Tool, Sample/Template
Developing and adopting a written financial policy is a valuable practice for any nonprofit organization, no matter how small or large. Financial policies clarify the roles, authority, and responsibilities for essential financial management activities and decisions. Use this sample and guide to help you develop your organization's policy.
Financial Strategy Tools
Article/Blog, Guide/Tool
This article presents a method to profile an organization’s financial makeup, and to create a comparison to a panel of similarly situated organizations. The Nonprofit Cohort Analysis Tool (NCAT) helps nonprofit staff and board members to visualize trends in their organization’s revenue streams and expenditures; identify candidates for revenue growth or expenditure savings; and gain an understanding of placement among peer organizations.
Finding and Managing Consultants and Vendors
Guide/Tool
The following resources will help you find and manage consultants and vendors, whether for a defined project, or ongoing support. If you need a referral for support on fundraising, strategic planning, legal issues, accounting issues, meeting facilitation, technology, or any other outside support, start here. (Many of the consultants and vendors in MANP's Yellow Pages offer nonprofit rates.)
Staff Recommended
Form 990: What to File and How
Article/Blog, Video/Tutorial
These resources provide an overview of the different versions of IRS Form 990 and how to complete this annual return (due the 15th day of the 5th month after the end of your fiscal year, which means May 15 or November 15 for most organizations).
Glossary of Financial Terms
Nonprofit Finance Fund
Guide/Tool
A helpful quick reference page of financial terms.
How Small Nonprofits Can Improve Their Fiscal Health
The Chronicle of Philanthropy
Article/Blog
An article providing financial management suggestions for staff and board members of small organizations (under $1 million).
Staff Recommended
How to Dissolve a Maine Nonprofit
Article/Blog, Guide/Tool
For some nonprofits the painful decision to close the doors must at some point be made. MANP has created a page dedicated to the helping nonprofits navigate dissolution, as well as a white paper on the topic.
Staff Recommended
Internal Controls
Guide/Tool, Video/Tutorial
The following resources provide an overview of practices and policies to ensure sound internal controls and prevent financial mismanagement.
Investment Policies
Guide/Tool, Sample/Template
The board of directors of a nonprofit has a fiduciary responsibility to protect the assets of the nonprofit and to use those assets to further the nonprofit’s mission. One way to do so may be to invest the nonprofit’s cash in investment vehicles, such as stocks and bonds, and other financial investments, that can grow the nonprofit’s assets.

Before your nonprofit invests in the stock market, develop a sound approach to investing assets by: defining the nonprofit’s objectives for investing, identifying the nonprofit’s risk tolerance, and adopting an investment policy.

Find guidance and sample policies in the following resources.
IRS Publication 557: Tax Exempt Status for Your Organization
IRS
Guide/Tool
Detailed guide with information on most types of tax exemption, including rules and restrictions related to fundraising and lobbying.
IRS Publication 561: Determining Value of Donated Property
IRS
Guide/Tool
This IRS publication outlines how to determine the value of various kinds of donated property for the purposes of determining tax deductions.
Maine Revenue Services
Organization/Agency
Information on Maine taxes and exemptions, including sales tax and property tax.
Maine Society of Certified Public Accountants
Organization/Agency
CPA directory and financial management support organization which provides resources such as news, articles, newsletters, and career help.
Maine Uniform Prudent Management of Institutional Funds Act
State of Maine
Statute
As outlined in our Guiding Principles + Practices, nonprofits have a legal and ethical obligation to expend grant and donor funds responsibly (including those managed through an endowment) and to ensure that funds are dispensed according to the funders’ wishes and requirements, in accordance with the Maine Uniform Prudent Management of Institutional Funds Act.
Managing Restricted Funds
Propel Nonprofits
Article/Blog
This resource article defines unrestricted, temporarily restricted, and permanently restricted income and gives nonprofit leaders guidance on how to record, report, and effectively manage contributed income and net assets.
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Moving a Nonprofit to Another State
Article/Blog
This article provides a simple outline of options for a nonprofit that was founded in one state, but later wants to move to another.
National Center for Charitable Statistics
Organization/Agency, Research/Report
A national clearinghouse of data on the nonprofit sector in the United States, including access to specific organizations' Form 990 data, and information on filing the 990.
Nonprofit Financial Management
The Wallace Foundation
Organization/Agency
This website has a broad range of resources to support nonprofits in developing strong nonprofit management practices, including tools for budgeting, planning for growth, planning for uncertainty, calculating the cost of programs, projecting cash flow, understanding and interpreting financial reports, managing government contracts, strengthening internal controls and efficiencies, and much more.
Staff Recommended
Nonprofit Financial Management Guide
MANP
Guide/Tool
An overview of the key concepts for managing financial transactions and the reporting out of data essential for administration of nonprofit organizations. This is a great reference guide for Executive Directors, board members, and finance staff.
Nonprofit Good Practice Guide
Organization/Agency
Resources and information on good practices in all areas of nonprofit management, including a section on volunteerism.
Nonprofit Operating Reserve Ratio
The Urban Institute
Guide/Tool
A guide to help organizations determine what their operating reserve ratio should be.
Staff Recommended
Nonprofit Risk Management Center
Organization/Agency
A long-time MANP Partner, NRCM provides risk management support including a wealth of articles, links, a newsletter, risk management policies, risk management advice, and assessment and planning tools. Resources cover topics related to insurance, employees, volunteers, special events and much more.
Staff Recommended
Nonprofits + Property Tax
MANP
Guide/Tool
If your organization owns property, you may be exempt from paying property taxes to the municipality in which it is located, but you may not. As municipal budgets are squeezed, nonprofit property tax exemptions are scrutinized. These resources will help your nonprofit understand your options.
Overhead Cost Definitions
Nonprofit Finance Fund
Both the IRS and FASB (Financial Accounting Standards Board) have definitions for these functional expense classifications. This resource is an overview of different overhead definitions, and what may or may not be included.
Payroll
Idealware
Guide/Tool
Many nonprofits outsource the management of payroll. This guide provides some suggestions for third party services that small and mid-size organizations may want to consider in addition to exploring the services of their local bank.
Pricing Guide: A Resource For Community-Based Organizations to Value and Price Services
SCAN Foundation
Guide/Tool
With increased pressure for nonprofits to diversify funding sources, many are exploring earned income strategies. This guide was developed to help organizations understanding different pricing models and set the prices and rates on their products and services.
Propel Nonprofits
Organization/Agency
This organization offers webinars (including on-demand videos), has a great Resource Library with financial management tools, template, and articles to help you in your work, and has a free e-newsletter.
Quickbooks Training
TechSoup
Video/Tutorial
Many organizations use Quickbooks for their accounting. These free recorded webinars can help you make the most of the software.
Reporting Financial Information to the Board
The Board is responsible for short and long term planning, and they must ensure that systems are in place for administering effectively using resources, and guarding against misuse. In order to fulfill their responsibilities, board members must be able to rely on financial information that is accurate, timely, in context, and appropriate. This resource outlines the types of financial reports that are needed as well as how to present the information to the Board.
Restricted Funds
Article/Blog, Video/Tutorial
Nonprofits must be particularly careful to account for restricted funds, such as grant funds or donations that a donor has earmarked for a specific purpose. The following resources provide guidance on tracking restricted funds.
Sales Tax Exemption
Maine Revenue Services
Guide/Tool
Only some nonprofits are eligible for exemption from state sales tax. This link provides information from Maine Revenue Services to help nonprofits determine if they may be exempt from sales tax, including how to apply for sales tax exemption.
Sample Final Financial Report for Grant Awards
William A. Bayreuther Grantwriting
Sample/Template
Most grantors require a final project report, including a financial report. The attached sample illustrates a final financial report outlining budgeted expenses, actual expenses and the expenses allocated to that particular funding source.
Sample Organizational Operating Budget
William A. Bayreuther Grantwriting
Sample/Template
This Excel spreadsheet provides a sample and template for outlining a nonprofit annual operating budget for grant request purposes.
Sample Project Proposal Budgets
William. A. Bayreuther Grantwriting
Sample/Template
Most foundations and corporate funders require organizations to submit a project budget with their grant application. William A. Bayreuther Grantwriting has provided complementary samples of proposal budgets for a 1 year project, 2 year project and a capacity building request.
Sarbanes-Oxley and Implications for Nonprofits
Independent Sector, BoardSource, GuideStar
Article/Blog, Guide/Tool
These resources outline provisions of the Sarbanes-Oxley Act and how nonprofits can put in place effective oversight.
Scenario Planning
How do you plan for multiple possible futures? The following articles offer tools for "What if" planning.
Staff Recommended
Self-Declared 501(c)(3) Nonprofits
MANP
Guide/Tool
A self-declared 501(c)(3) nonprofit is a qualifying charitable organization that chooses not to seek official recognition of its tax-exempt status from the Internal Revenue Service (IRS).  These qualifying charitable organizations receive all the benefits of tax-exempt status if they operate in compliance with all rules and regulations that govern other tax-exempt organizations under IRS code 501(c)(3). If your organization is wondering whether or not to apply for official tax-exemption and has annual gross receipts less than $5,000, this white paper is a must-read.
Starting Off Right: What New 501(c)(3) Organizations Need to Know
IRS
Video/Tutorial
This recorded IRS webinar helps new nonprofits stay legally compliant. It covers annual filing requirements, what records to maintain, what  to do to meet the "operational test", how to avoid jeopardizing 501(c)(3) status, and what tools are available for tax compliance as an organization grows.
Stay Exempt
IRS
Guide/Tool
Developed by the IRS, this easy-to-use website covers tax basics for exempt organizations. Resources include: virtual workshops and self-paced mini-courses that cover various IRS rules, regulations and systems.
Staff Recommended
Summary of LD 1770: Amendments to the Maine Nonprofit Corporation Act
MANP
Guide/Tool
Major changes were made to the Nonprofit Corporation Act in 2001. This white paper provides a summary of those changes, which include updated conflict of interest rules as well as duty and enforcement changes relevant to nonprofit directors and officers.
Tax Information for Charities and Other Nonprofits
IRS
Guide/Tool
Tax information for charities & other nonprofits from the IRS. Review the contents thoroughly and check for updates periodically.
The Overhead Myth
Guidestar
Guide/Tool
A great compilation of frequently asked questions related to nonprofit overhead.  Addresses topics such as "overhead ratio," fundraising vs. administrative costs, executive pay, and messaging/communications about nonprofit overhead.
The Value of Volunteer Time
Independent Sector
Research/Report
Independent Sector updates a value of volunteer time each year.
Tracking Volunteer Time
Guide/Tool
A guide on why and how to track volunteer time.
Types of Tax-Exempt Organizations
IRS
Guide/Tool
Chart containing all of the different types of tax-exempt organizations and their characteristics.
Unrelated Business Income
IRS
Guide/Tool
A helpful tutorial from the IRS about unrelated business income, including exceptions, exclusions and deductions, and form 990-T.
Unrelated Business Income Tax (UBIT)
IRS
Guide/Tool
If an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose the organization is subject to tax on its income from that unrelated trade or business.  This can sometimes apply to revenue from corporate partnerships. These resources outline the rules related to Unrelated Business Income Tax, or UBIT, including which organizations are subject to the tax, what the requirements are for filing a tax return, what an unrelated trade or business is, and how to figure unrelated business taxable income.
Using Loans: A Guide to Borrowing for Nonprofit Organizations
Guide/Tool
Like other businesses, nonprofit organizations sometimes need cash in the form of a loan to operate their programs effectively. Astute managers and boards understand that loans can be a tool that can help their nonprofit grow and succeed. This guide is designed to help nonprofits understand loans, uses for loans, and when it makes the most sense to consider this financing option.
Vehicle Donations
IRS
Guide/Tool
These resources outline the implications for your nonprofit's tax exemption when accepting a donated used car, as well as tips for determining whether to accept a vehicle donation.
Staff Recommended
What to Do If You Suspect Fraud or Misconduct by a Nonprofit
Guide/Tool
MANP's white paper provides an overview of steps to take if you suspect fraud or misconduct by a Maine nonprofit, including concerns related to charitable solicitation, tax law, gaming, and compliance with the Maine Nonprofit Corporation act. The additional resources provide additional context for protecting your organization.
Whistleblower Protection Policy
Various
Article/Blog, Sample/Template
Form 990 asks organizations to indicate whether they have adopted a whistleblower policy. While this policy is not required, it is recommended and the IRS may increase their scrutiny of returns from organizations that have not adopted recommended policies. These resources and samples provide a basis from which nonprofits can create their own policy, are not intended for verbatim use without careful review.
Staff Recommended
White House Office of Management and Budget (OMB) Guidance on Indirect Costs
National Council of Nonprofits
Guide/Tool
In 2013 the White House Office of Management and Budget (OMB) issued guidance that makes it clear that a nonprofit’s indirect costs (sometimes called overhead or administrative costs) are legitimate expenses that need to be reimbursed for the organization to be sustainable and effective.
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