HR Workforce Solutions
By Nonprofits, For Nonprofits
Using a business model has grown to become an essential tool when making any business or financial decisions within the nonprofit sector. When incorporating a new business model, a few key components should be discussed to ensure the business model will not only provide financial stability but also further the growth of operations within your organization. Along with understanding the financial side of a new business model, it is important to factor in the daily tasks that occur in a business, including cash flow—money being transferred in and out of an organization.
Cash flow can be simply defined as a movement of money within the organization’s accounts. It is where the numbers and financial reports show how the money has moved and how it’s been accounted for. When managing cash flow, the question you will be asked repeatedly is “When?” —when do you pay your staff, when will you be receiving a grant payment or when is a particular bill due. And while all nonprofit business models are different in one way or another, they all rely on the “when” with the movement of money.
When creating a nonprofit business model, there are two main components to factor in—what kinds of programs and services does your nonprofit offer to the community and most importantly, how are they funded. Each of these components require the understanding of organizational cash flow in order to have effective financial planning. To further understand what kinds of programs and services a particular organization offers, you would look at where and how money is being spent.
When looking at how an organization is funded, this can provide a better understanding of what’s to come in terms of cash coming into the business. If by chance the cash flow doesn’t quite match up with the services offered, this could be further explained by how the organization receives its funding. Each type of income varies based on certain implications and challenges for cash flow, so if a business model is built primarily around one type of funding, this will have to be factored into the structure of the business model.
Creating a smart and strategic business model requires you to be informed and collaborative in cash flow management. This will ensure that your nonprofit’s long-term strategy isn’t hindered by obstacles that could have been avoided.
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UST maintains a secure site. This means that information we obtain from you in the process of enrolling is protected and cannot be viewed by others. Information about your agency is provided to our various service providers once you enroll in UST for the purpose of providing you with the best possible service. Your information will never be sold or rented to other entities that are not affiliated with UST. Agencies that are actively enrolled in UST are listed for review by other agencies, UST’s sponsors and potential participants, but no information specific to your agency can be reviewed by anyone not affiliated with UST and not otherwise engaged in providing services to you except as required by law or valid legal process.
Your use of this site and the provision of basic information constitute your consent for UST to use the information supplied.
UST may collect generic information about overall website traffic, and use other analytical information and tools to help us improve our website and provide the best possible information and service. As you browse UST’s website, cookies may also be placed on your computer so that we can better understand what information our visitors are most interested in, and to help direct you to other relevant information. These cookies do not collect personal information such as your name, email, postal address or phone number. To opt out of some of these cookies, click here. If you are a Twitter user, and prefer not to have Twitter ad content tailored to you, learn more here.
Further, our website may contain links to other sites. Anytime you connect to another website, their respective privacy policy will apply and UST is not responsible for the privacy practices of others.
This Privacy Policy and the Terms of Use for our site is subject to change.
