M+M 009: What's Really Going On?

You’ve built the financial foundation.

Tightened your internal controls.

You’re staying compliant.

Are using your budget + forecast to plan.

Now it’s time to make the numbers work for you.

Too often, nonprofits view financial reports as a “check-the-box” exercise for the board.

But when used strategically, they become one of the best tools to make smart decisions, increase funding, and run more effectively.

If your reports are hard to understand no one will read them and no decisions will be made with them.

Then it just becomes a waste of time.

This week is all about how to use financial reporting and analysis to create visibility and clarity.

Start With the Basics (That Every Board Should See)

Your board and leadership team should receive standard monthly reporting. At a minimum, include:

✅ Statement of Activity (Profit & Loss)

✅ Statement of Financial Position (Balance Sheet)

✅ Year-to-date (YTD) Budget vs. YTD Actual

✅ Full Year Actual + Forecast vs. Budget

Here’s what works well:

P&L and Balance Sheet:

Consider showing the last 3 months side by side so you can see changes. Trends help spot problems or wins quickly (e.g. rising expenses, cash balance changes, etc).

YTD Budget vs. YTD Actual:

This helps your board and team understand how you’re doing against your original plan. Establish a variance amount where if a line is +/- that amount vs. budget you provide an explanation in plain language.

Actual + Forecast vs. Budget:

The best way to explain this is if it’s August you’d show 7 months of actuals (Jan - Jul) and 5 months of forecast (Aug - Dec). Then you compare that to your full year budget. This provides your board/leadership a real-time view of where the year is going to end up. This will highlight areas to focus attention on for the rest of the year.

These are the foundation, but we’re just getting started.

Reports That Reveal What’s Really Happening

The board needs to understand the big drivers of your organization.

Are you going to miss on your grant revenue? How are salaries looking vs. budget? Are we going to have enough cash?

Then there are the day to day reports and analysis that will help you and your team run the organization more efficiently. 

Here are a few reports/analysis that I’ve seen drive better decision making at growing organizations:

🧮 Department Reporting

Does someone manage a budget for each department? Do they have reporting for just their slice of the pie? If not, it’s going to be much harder for them to feel ownership over their budget and team. 

🧾 Expenditures by Vendor

This report reveals how clean your bookkeeping is, for starters. Second though, you can pull this report and show it over a 6 month period. You’ll be able to identify recurring expenses and trends. This is a report that helped me identify over $30k in annual software savings for a startup I worked with. It’s a standard report in Quickbooks and most financial software. 

📊 Unit Economics

How much does it cost to deliver one unit of service, whatever that is for your organization? If you’re applying for a grant or donor support, this number is gold. It shows you’re thoughtful about your impact and resource use. If you can show donors that you’re getting more efficient over time then this will make you stand out against other nonprofits raising funds from the same major donors. 

🧍 Revenue Per Employee

How efficient is your staffing for your size and stage? Use this as a quick benchmark based on annual revenue:

• Under $1m: $50k–$100k per employee

• $1m - $5m: $100k–$150k per employee

• $5m+: $150k+ per employee

Too low? You may be overstaffed or need to increase revenue. Too high? You could be running too lean and risking burnout.

Fundraising Analysis That Drives Smarter Growth

Most nonprofits track how much they raised, but fewer break down how much it costs to raise that money.

If you’re doing events, mailers, or campaigns, take a closer look.

🎯 Cost Per Dollar Raised by Method

Include staff time, materials, venues, software, etc. You’ll have to make some assumptions here, but it will give you a true idea of the cost involved. There are also some soft benefits that can be tricky to quantify. For example, events on paper may look worse than other methods but you likely have some big donors coming to the event that may decide to give after.

What’s important here is that you can see if you’re getting more or less efficient in each area than you had been prior. For example, your cost per dollar raised through events should ideally go down each year as you raise more and make the event process more efficient.

🔎 Donor Concentration

What percentage of your revenue comes from your top five donors?

• 10–25% = Healthy

• 25–40% = Getting Risky

• Over 40% = Very Risky

If you’re too reliant on a few donors, your organization becomes vulnerable. Pay close attention to this when it comes to long-term planning and sustainability. It might be okay to operate with high donor concentration for a season, but the goal should always be working towards a more sustainable fundraising base. 

All it takes is one call or email and your organization would have to make substantial changes. You want to avoid that if you can.

Why It Matters

A good financial report doesn’t just inform, it provides clear next steps for action.

✅ It helps your board understand where you are and where you’re headed.

✅ It gives your team tools to make day-to-day decisions more effectively.

✅ It uncovers blind spots that could slow growth, increase risk, or waste resources.

And if the numbers don’t feel useful yet, that’s okay.

It often takes a few iterations to build a reporting system that works well for your unique organization.

What’s Next

Next week, we’ll wrap up the Financial Blueprint series with how to use your numbers to tell your financial story. Whether it’s to your board, your funders, or your community.

Because numbers don’t matter if they don’t drive action.

Let’s make sure your story comes through loud and clear.

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