CASE STUDY: How We Helped a Nonprofit Organization Grow from $50K to $2.2M & Transition to a New Executive Director Without a Hitch
One of our valued clients at Daily Balance is Mutual Assistance Network (MAN), is a nonprofit that creates local opportunities for resident-driven growth and change in Northern Sacramento to improve health, income, and education. When I first met Richard, MAN’s Executive Director (ED) at the time, just like almost all other nonprofit organizations we speak with, he was in a constant state of frustration over the organization’s finances and internal controls.
Here are some of the things the organization was struggling with:
- They were being inconvenienced by paper transactions and having to hand-sign checks.
- The accrual accounting that was required of them was a difficult beast to tame and a constant cause of stress.
- There wasn’t an internal person handling the finances outside of their bookkeeper, so it was difficult to stay abreast of their financial situation.
- And their outside auditor was missing the details he required, which meant they were missing opportunities that could benefit their organization and the people they serve.
All of this was pulling Richard in many directions, while adding a steady flow of unnecessary headaches for him and everyone involved.
He was looking for a solution. Fortunately, our paths crossed.
When I showed him the increase in accuracy, efficiency, and funding that he would gain by allowing Daily Balance to manage his bookkeeping, he was eager to get the ball rolling.
Best of all, after five short years, their organization grew from $50K to $2.2M in net assets, and MAN was able to very easily transition to a new ED named Danielle only a month after we started working with them.
Here’s how we did it…
| 1. |  |
Streamline the Information Flow Between MAN & Their Accounting – By doing this, their internal controls, approval processes, and accounting systems would save them time instead of causing them headaches. It would also ensure better accuracy, as well as continuity and clarity for everyone involved. |
| 2. |  |
Assign & Train an Internal Person to Handle the Finances – Training an existing staff member to be more proactively involved with managing the grants on the internal side would ensure the organization could attract and jump on more opportunities to get more funding. |
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Get Their Books in Tip Top Shape – By better organizing and maintaining the financials, the info needed to apply for grants would be readily available, while providing greater internal and external confidence on a monthly basis. |
The Strategy We Used to Help Them Turn Things Around
After determining where Richard and Danielle wanted to take the organization’s financials, we developed a strategy that would make their goals possible.
Here’s what we did:
1. We Optimized Their Internal Accounting Structure
Having a strong internal accounting structure would allow for more accurate accounting on a real time basis. This included restructuring their chart of accounts, allocation methods, and reporting structures. We improved their existing plan, created consistency and a better flow of information, and reorganized for enhanced reporting.
These changes improved their ability to take on more grants and allowed them to jump on opportunities since they now had a financial system that ensured their books were ready-to-go.
2. We Modernized Their Payment Systems
By instituting a vendor payment/management system, it provided MAN with secure, proper payment approval levels and the ability to electronically make vendor bill payments.
This was important because it safeguarded their cash, increased efficiencies, reduced the time required to handle payables, and helped to secure their cash overall, from approval processes to internal controls and beyond. Not only that, but it made it much easier and faster for them to share information with their auditors.
3. We Improved Their Accrual Accounting Systems
Since many nonprofits are required to be audited or reviewed each year, it is critical that their accrual accounting systems are on point. However, most nonprofits don’t know how to properly set up and utilize these systems since they are not accountants.
Once we set this up for them, they were able to have clean audits every year, get more funding, and get renewed by existing funders.
4. We Improved Their Cash Flow
When nonprofit organizations have reimbursable grants, they can end up prepaying their expenses for a month or more before they get reimbursed, which can create cash flow issues.
By managing MAN’s grant invoicing, we improved the timeliness of grant invoice submissions, allowing them to improve their cash flow. This gave them more control over their expenses and decision making processes.
5. We Provided Daily & Monthly Support
So much of the stress of managing a nonprofit is not having the proper support. That’s why we met with MAN on a monthly basis to review their situation, answer their questions, and provide them with the information they need to succeed and grow.
During our meetings, we talked about problem areas, continued to tweak things and make improvements, and we helped them smooth out any rough spots in their workflow. We also taught them about the financial aspects of nonprofits that they were unaware of so that they could focus on their programs while at the same time gaining a better understanding of the process.
This brought them comfort and confidence as they understood what was going on financially in their organization and they didn’t feel alone to figure it all out on their own.
What Were the Results?
Within just five years, MAN grew from $50K to $2.2M in net assets. Not only that, but Danielle’s quality of work life improved as her stress decreased, as did all of the employees, auditors, board members, etc.
After less than 1 month into our work with MAN, Richard took another job and internally promoted Danielle to take his place. What would normally be a difficult time for an organization was a smooth transition because we worked closely with them to ensure nothing fell through the cracks.
While still maintaining their fiscal accounting, we also provided a lot of hand-holding to get Danielle up to speed on the financial aspects of the organization. And the great part for them was that all of this extra time we provided was still covered as part of their normal flat fee.
As an added bonus to us, we are delighted that we still get to work with Richard since he hired us to work with his new organization as well.
Are You Ready to Reduce Your Stress & Gain Control of Your Organization’s Financials So You Can Make a Bigger Difference?
About the Author
Syd Highley is a seasoned CPA with over 30 years of experience, specializing in outsourced bookkeeping and accounting services for nonprofit organizations. He founded Daily Balance, Inc. to help nonprofits efficiently manage their financials without the cost of an internal accounting department. Syd's deep expertise ensures that his clients receive accurate, professional bookkeeping and financial management, tailored to their unique needs. His firm is known for delivering focused, persistent, and friendly service that saves organizations time and helps them receive more funding.
Accolades From Our Happy Nonprofit Clients
“Working with Daily Balance has been transformative for our organization. Their expertise in fiscal management has greatly improved our bookkeeping, invoicing, and reconciliation processes. Their deep knowledge and strategic approach have significantly enhanced our grant management and overall financial operations. Their customer support is exceptional; they are always available and responsive to our needs. With Daily Balance, we’ve been able to spend 99% of our grants last year and achieve a level of financial health and compliance that we couldn’t reach before.”
~Basir Azizi, Mutual Assistance Network
“Since working with Daily Balance, it’s been a seamless transition. They’ve quickly adapted to our financial systems, maintaining the same level of detail and accuracy while introducing improvements that have streamlined our processes. They’ve helped us save money, allowing us to allocate more resources to our core mission. Their expertise in non-profit bookkeeping has been invaluable, ensuring we remain compliant and financially healthy.
They are more than just a bookkeeping service. They are a partner, invested in our organization’s success. Their ability to step in, respond quickly to needs, and offer cost-saving solutions has been an incredible asset. We couldn’t be happier with the support they’ve provided.”
~Evan Hawkins, FACCC
“Daily Balance are experts in back office support in financial accounting and management. They support our needs and we continue to learn from their team. Their team of experts have a huge heart for non profits and the essential services they bring to enrich our communities.”
~Debra Oto-Kent, Health Education Council
“As a new company which is growing quickly, CSS needed to build its financial infrastructure to match our trajectory. DB was able to step in on one day to provide us with sound expertise and a talented team of professionals.
We view Syd and his team as our go-to experts as it relates to our finance and accounting needs. Their experience and expertise have helped CSS strengthen our organization at a critical time in our growth. They discuss solutions with us and provide solid options to consider as we are making business decisions.
~Tracey Schaal, Community Strong Strategies
