How donor dollars are spent is important to those seeking services through the nonprofit as it shows how successful that nonprofit is at its mission. For those donating funds--whether you are a foundation, a corporation, or an individual--statements like this show how your dollars work and the outcomes they help achieve. However, financial stewardship is about more than just a statement on a website or on marketing materials…nonprofits have to prove their financial stewardship. Individuals seeking services or donors looking to give funding to help a nonprofit should consider the following:
Financial Stewardship
If you’ve ever visited a non-profit’s website, you’ve probably seen these types of statements: “CASY spends 96 cents of every dollar on our mission…MSCCN spends 92 cents of every dollar on our mission.” You might be asking yourself, “But what does that mean for me?"
Research the Organization’s Accomplishments.
Beyond a general statement about how funds are used, you should look at the actual accomplishments of the nonprofit. This information can be found in annual reports and on their websites. Also, take a look at their partners.
Consider their Financial Responsibility.
If the organization is transparent, its financial information, including IRS Form 990 and audited financial statements, should be on their website.
By: Stacy Bayton
Statements like this are important as they reflect how an organization puts their donations to good use covering the work that needs to be done for the people they serve rather than spending it on big salaries for its executives or fundraisers. This is very important not only for those of you who are seeking assistance through that nonprofit, but also for those who are donating funds to the nonprofit.