Where do you think the nonprofit sector could effectively use financial management resources?
Some thoughts:
To start with, for volunteers from the corporate finance world to be useful to nonprofits, they need to understand how nonprofit finance works. Taproot could provide a primer: nonprofit accounting, grant process, reports, etc. This way the volunteer starts with some of the tools to speak their language. Ability to “measure/quantify results” is one of the biggest gaps for nonprofits (and corporations as well, to a lesser extent–since the bottom-line is usually the baseline). As applied to financial management for nonprofits, I wonder if “developing good financial hygiene” or “understanding where their money is going” or “introducing measurement mechanisms for their resource expenditures” might be good goals for Taproot projects. In other words–have Taproot volunteers go in (properly prepped as to how nonprofit finances work), do a quick, high level audit (starting with the annual report). Where is the money going? If it’s not clear, then you need better accounting controls. How does the resource allocation align with the nonprofit’s goals? If it’s not aligned the way they thought, some recommendations can be made as to how to improve them. Are the results commensurate with the amount of resources expended? If the answer is not clear, then better ways to measure results are needed. I think one of the biggest contribution corporate resources can make (on the financial management front) is introducing a systematic mindset of accountability and measurement, and helping to put in place the processes and tools to execute and improve on it.
