Every director and board member of a community arts education provider would like to have a large endowment, reserve cash in the bank, and a surplus at the end of every year. Unfortunately, for most organizations, this is a dream, not reality. Without these indisputable but hard-to-attain signs of financial strength, how can an organization assess its financial well-being? Print this page
Financial health is about more than just reserves and endowment balances. Having a large budget or a complex accounting system doesn’t always lead to management excellence and long-term success. Just as personal health depends on healthy behaviors, the financial health of a nonprofit organization depends on management behavior, including policies and practices.
Financial management uses terminology that may be unfamiliar to community arts education provider staff. The Nonprofit Finance Fund Glossary of Financial Terms is a valuable resource.