If you don’t like talking about money, you’re in the wrong industry

If there is one thing I’ve learned from working with small nonprofits, it’s that many of them hate talking about money. Whether it’s fundraising, budgets, or financial statements, money discussions make everyone uncomfortable.

I’ve seen board members refuse to participate in fundraising, Executive Directors shy away from discussing money with donors and clients, and boards and treasurers either quickly skim—or skip altogether—reviewing financial statements during meetings.

Money conversations are difficult. But they are necessary.

There are real reasons why nonprofits develop a habit of money avoidance. No matter the reason, avoiding discussions about money is often the root of dysfunction within a struggling nonprofit. Fortunately, there are steps you can take to reframe how you approach the money problem.

The first step is recognizing that your finances influence how your organization functions and how your mission is fulfilled—even when you’re not paying attention.

Money is powering everything you do, whether it comes from earned income, grants, or donations.

Or your board president quietly buying supplies with their own cash.

Second, it’s about recognizing that money is a tool. A necessary one. And that’s how you should be thinking about it: as the most important tool you need to do what you’re here to do. It’s already working in your organization; the trick is to plan how it’s working and use it purposefully.

Tell me if this sounds familiar:

Every couple of years, someone reluctantly volunteers to be the treasurer—whose job duties typically revolve more around ensuring the bills are paid than providing data for the board to base decisions on. For board meetings, the financial reports are downloaded from a QuickBooks account that was designed by a board member who retired ten years ago. Copies of a balance sheet and profit and loss statement are passed around and met with silent nods. A vote is made to accept the reports. Someone asks what the bank balance is. The conversation moves on.

If any of that hits a nerve, ask yourself this:

When was the last time your board was excited about something?

Do you think about the future—or are you worried about the present?

Not understanding your financial statements holds your board back from pursuing exciting ventures that propel your mission—instead keeping you worried about whether you can function today.

One of the most common reasons I’ve seen for avoiding finance talk—especially in all-volunteer organizations—is a lack of understanding of nonprofit accounting. Your organization depends on everyday people from the community to keep your work moving, but often those people don’t have any background in nonprofit finance.

And that’s okay.

But it does mean you should be focusing on education and a new way of looking at your financial statements.

When you know what your money is doing for you, you can stop jumping from one cash-flow crisis to the next. You can stabilize. You can plan and grow.

You can dream.

The key is realizing that those documents are not just for making sure you still have cash in the bank. We don’t need them just to file our taxes or apply for a grant.

These documents are your roadmap. They show you where you’ve been, where you are, and where you’re going. They are your compass to guide you toward successful mission fulfillment.

But only if you learn to read and understand them. It’s important for your board to learn what those documents are telling you.

Understanding your statements doesn’t require a degree in accounting. All it requires is the ability to ask questions and use the data in the statements to answer them.

Are we meeting our current obligations?

Can we meet our future obligations?

Do our assets support growth, or do we need to focus on stabilization?

What funds do we have dedicated to mission fulfillment vs infrastructure and overhead?

Where is our money coming from?

Where do we look to increase revenue?

Where can we cut expenses?

These are the types of questions that allow you to position your organization toward success.

If you understand where you have been and where you are, you can then ask—and answer—where do we go from here?

Viewing money as a tool, and your statements as your data set, also helps eliminate the fear of “the ask.” Fundraising anxiety often stems from not knowing who to ask and what to ask for. It comes from not understanding the importance of money. When you understand how money affects your mission, the ask transitions from “begging for a dollar” to “I care about this mission, and your support allows us to fulfill it.”

That reframing changes everything about how you approach donors. You’re not asking for money. You’re asking for mission support.

Knowing where your money comes from and how it’s used opens your board’s ability to fundraise effectively and plan for growth. It allows your staff and Executive Director to have clarity in how to use the budget efficiently and effectively.

In short, avoiding money conversations holds your organization back. Embracing the need for these discussions lets you regain control. It allows your team to maximize your organization’s ability to enrich your community.

Now, go do some good!