Does Your Development Department Get Along With Finance?

By: John Brooks, Senior Consultant

In large and small non-profits, there is sometimes a disconnect between different departments. You know – the “Silo Effect.” Everyone is so caught up in the day-to-day and what they have to accomplish that they sometimes overlook the fact that their work has a direct impact on other departments and vice versa.

Program officers need to make sure the communications team has what it needs to effectively inform donors, volunteers, and the media. Facilities need to let program know about repairs that may impact how program staff carry out their work and your volunteer manager needs to know if those repairs will impact the important work volunteers perform. Obvious? Maybe. But what about the communication between development and finance?

What happens when a major donor moves or has a life-changing event that could significantly impact their contribution? Does the finance office know when one of the organizations’ major donors has passed away or lost a spouse? How about when the family foundation is suddenly dissolved or there are significant changes to a donor advised fund (DAF) that negatively impact your organization? On the flip side, one of your donors tells you that their DAF or family foundation did really well last year and, as a result, they are doubling their gift this year. Of course, the development team is aware and perhaps the executive director knows but what about the finance officer?

I made it a point over the years as chief development officer to hold monthly meetings with the chief finance officer. We would discuss any situation that could have an impact on the annual budget that was not anticipated when the budget was finalized.

This ongoing communication was invaluable to the finance department. It helped our CFO anticipate cash-flow and, if adjustments were needed, the CFO could make them before there were any negative impacts to the overall budget. Often, unexpected losses of major gifts or large grants could be offset with unfilled staff vacancies. When we were notified of gifts, grants or bequests that would be larger than budgeted (or completely unexpected), this information was also shared with the finance office. If the increased contributions were unrestricted, the CFO would have the flexibility to shift revenue to those programs that may have been operating with a deficit, make purchases that had been put off or even fund an unfunded staff position.

Successfully running a non-profit organization – large or small – is a rewarding but extremely stressful undertaking. Ongoing communication between development and finance is essential to the fiscal health of your organization by helping to mitigate some of that stress. I was never afraid to get out in front of a potential deficit before it became a bigger problem. Often, we found solutions that helped us all sleep a little better.

Best wishes for a good night’s sleep as you continue to make a difference!