How Development and Finance Can Get Along (Really!)
Most people understand that their Development and Finance Departments are both critical to the success of their nonprofit organization. Many people, however, tend to forget just exactly what their counterparts in “the other office” actually do day-to-day.
Your Development Department is the “face” of your organization in your community. Every day, your Development staff members are competing with every other nonprofit organization on earth (potentially) for a share of the pool of dollars available from donors. Donors, God bless ‘em, are a fickle bunch, and our Development staff is responsible for keeping them happy, and ensuring that they continue to give. That last point might be the most important: your Development staff can never rest on its laurels. Prospecting for new donors and soliciting for more, and bigger, gifts from current donors is a never-ending process, and anything that pulls our Development people away from that task can be a problem!
The Finance Department lives by the mantra “accurate and timely”. Every dollar that passes through your organization must be recorded in your books correctly, and information about those dollars must be available quickly to anyone who needs it. This financial information is used to make decisions about the activities and direction of your organization. If the information that Finance provides is wrong (or too slow in coming), the decisions made will be wrong, and your organization can end up solving non-existent problems while allowing the areas of greatest need go unnoticed. People often joke about “accountants who fear change”, but it’s the Finance Department that has to answer for changes. If a data-entry error causes the funding for an initiative to be overstated one month and corrected the next, your Finance people have to give your Board the bad news!
So what should you keep in mind to make everybody’s life as easy as possible, and allow you to spend more time on your mission?
Strive For Error-Free Recording of Gifts
Generally, when Development secures a gift from a donor, they’ll record that gift themselves in their Constituent Relationship Management (CRM) program. That information will then be shared with the Finance Department, and recorded in your organization’s books. This information needs to be correct, the first time! It’s very easy for Development to say “We need to record gifts as quickly as possible so we can get back to actual fundraising, so just hurry up, and if we make a mistake we’ll fix it later”. So, gifts are entered as “$500” instead of “$50”, or gifts are entered under a husband’s record instead of under a wife’s record, or gifts are entered with the incorrect designation, or any of a hundred other possibilities. At best, this costs time for both Development and Finance to troubleshoot the mistakes and enter corrections, negating the original point of “hurry up!”. At worst, the errors aren’t caught, and you present incorrect information to your Executive Director, your Board, and your community at large. Everybody makes mistakes, but correcting or adjusting a gift-entry error should be the exception to your daily processes, not the rule!
Don’t Expect One Office to Answer All of the Questions
A lot of nonprofits get off track in their expectations of who needs to maintain certain information. Both your Development Office and your Finance Office maintain their own software programs, but there is no need to expect both systems to maintain all of the information that’s pertinent to your organization. Your Development Office software should be able to tell you who is giving and why, how much they’ve given in the past, what asks are still open for them, where they went to school, their spouse’s name, and so on. Your Finance Office software, on the other hand, should be dealing with gifts received for each designation, money spent for each designation, the remainder to be spent, and the market value of stock gifts, for example. Too many nonprofits expect their Finance Office system to break down their revenue by information that really only belongs in Development, like giving level (Major Gifts vs. Annual Gifts) or donor type (Individual giving vs. Corporate giving). Giving level and donor type and giving-by-state and plenty of other factors are all very important to know as you run your business, but your Development Office is the proper place to track all of those breakdowns, not your Finance Office!
It’s most important that neither the Development Office nor the Finance Office attempt to live an isolated existence. It’s a simple point that’s often forgotten – it’s much easier to run your business if the two offices talk to each other! If Development wants to launch a new initiative to which donors will give gifts, let the people in Finance know, so they’re ready to track that giving by designation and aren’t surprised when the first gifts roll in. If Finance sees that less money is needed for an initiative than planned, let Development know so they can solicit for other purposes. Every day, situations will arise for which one office or the other doesn’t have a procedure in place. That doesn’t have to be a problem! Keep the lines of communication between your Development Office and your Finance Office open and used, and life will be more efficient and less stressful for all of your organization’s stakeholders.