Workstreams Nonprofit's Finance Insights + Register for the Webinar

Ask almost any nonprofit leader what the worst part about running a nonprofit is, and they’ll tell you that it’s dealing with all the regulations and details that being a nonprofit entails. Here in the US, we have it easy; it’s much more difficult in other countries.

The goal of Workstream (and of our upcoming webinar) is to make that headache go away. We’re here to partner with you and provide the expertise, information, and support you need to focus on what really matters - making an impact.

One thing I often tell people is that the books should tell the story of your organization. It should be easy to read and understand. If it’s not, that’s a warning sign. Financial management that’s deeply connected to your operations can help you manage compliance, cashflow, and most important, ensure that you’re using your resources most effectively in support of your mission. Your finance manager should be an active part of growing and leading your organization.

That’s why we created a financial management (bookkeeping) service - we’d like to give more nonprofits the ability to experience this.

We’d like to invite you to a webinar on September 10th at 12 PM EST addressing these topics. Some of the things we’ll cover in our upcoming webinar will address commonly asked questions our experts get, along with best practices. We’ll be focusing on financial management, compliance and board management. It’s a lot to pack into 1 hour, and we hope you’ll leave with some immediately implementable changes or perspectives that will help your org thrive.

Register Here

Question: What is one part of finance or compliance that you find is often misunderstood, poorly implemented, or unnecessarily complicated? Do you have a best practice to make it easy to implement?

Lena Ludwig, Executive Director at Logistically

I receive the most questions about Restricted vs. Unrestricted Funds.  Some nonprofits struggle with properly tracking and reporting donor-restricted funds. Commingling restricted and unrestricted funds in one operating account requires separate tracking and very clear documentation on how funds are spent. Donors or grantors of restricted funds that require reports will expect some expense line items and reasons behind those expenses.

Best Practices:

• Use smart worksheets or QuickBooks to do the hard work for you. Those tools have ways to tag restricted versus unrestricted funds.
• Once you receive a donation or grant, immediately report it and tag it.
• Create budget categories that mirror these restrictions, so staff always know how funds can be spent.
• Set up simple monthly reporting that shows “beginning balance, new revenue, expenses, ending balance” for each restricted fund.

This isn't just smart accounting and reporting, it’s central to compliance with IRS rules and to maintaining donor trust.

Melodi Bunting, CPA at Wegner CPAs

The biggest issue I see is that policies and procedures are treated as compliance paperwork rather than operational tools - companies write them in dense legal language, bury them in shared drives, and expect employees to magically follow rules they can't easily find or understand. 

The best practice is to turn policies into visual, practical job aids that live directly in your workflows: create one-page infographics instead of 20-page documents, build policy requirements into your software systems, and use simple language with real examples. For instance, instead of a lengthy expense policy document, put a simple flowchart right in your expense system showing spending limits, required receipts, and approval steps - making compliance the easy, obvious choice rather than an extra burden people avoid.

Jim McCormick, Accounting Manager at YPTC

One aspect of nonprofit finance or compliance that is often misunderstood, poorly implemented, or unnecessarily complicated is grants management and setting up your chart of accounts for success.

 Setting up a well-structured chart of accounts is essential for effective grants management because it provides the foundation for accurate tracking, reporting, and compliance. Each grant often comes with specific requirements regarding allowable expenses, reporting formats, and timelines. A tailored chart of accounts enables organizations to segregate grant-related transactions, ensuring that funds are used appropriately and transparently. It also simplifies the process of generating financial reports for funders, auditors, and internal stakeholders, reducing the risk of misallocation and non-compliance. Ultimately, a clear and organized chart of accounts supports better decision-making and strengthens the organization's credibility with grantors.

Mike Cammarata, CFP at Tide Creek Financial Group

One of the most misunderstood aspects of nonprofit finance is the proper classification, tracking, and reporting of restricted funds. Many nonprofits blur the line between unrestricted operating dollars and donor-restricted contributions, which can lead to compliance issues, cash flow strain, and even legal exposure.

Why it’s complicated: Donors often designate funds for specific programs, while nonprofits may need flexibility to cover overhead, staff salaries, or infrastructure. Without clear systems, organizations risk overspending restricted gifts or using them improperly. This creates challenges during audits and can erode donor trust.

Best practices for simplification: Implement true fund accounting practices even if the nonprofit is small. These include:

1. Chart of Accounts Setup

• Segment by fund (restricted, temporarily restricted, unrestricted).
• Align with program, management/general, and fundraising expenses.

2. Use Class or Project Codes in Accounting Software

• Most nonprofit-friendly systems (e.g., QuickBooks for Nonprofits, Sage Intacct, Blackbaud) allow you to track at the “fund” level without maintaining multiple separate ledgers.

3. Create Written Policies

• A gift acceptance policy clarifies what types of restrictions the organization will honor.
• A fund-release policy ensures restricted funds are released systematically when donor conditions are met.

4. Educate Staff and Board Members

• Non-finance leaders (executive directors, board members) should understand that “cash on hand” doesn’t equal “available to spend.”

5. Cash Flow Planning

• Maintain a rolling 12-month cash flow forecast that distinguishes between restricted and unrestricted dollars. This allows leadership to anticipate shortfalls before they become crises.

Why This Matters: From a CFP® lens, this aligns with fiduciary duty and stewardship of resources. Just as individuals must balance short-term cash needs with long-term goals, nonprofits must ensure donor intent is honored without jeopardizing operational sustainability. Clear fund accounting provides transparency, strengthens donor confidence, and simplifies compliance during audits or grant reviews.

I hope these insights have given you some practical guidance to help your organization scale and grow!

PS: Still overwhelmed? Let's talk about it - I'm here to help make this easier for you!

Don't forget to join us for our upcoming webinar on Wednesday, September 10th at 12 PM EST! It's a great opportunity to dive deeper into these concepts and get your specific questions answered by our expert panel.

Register Here

Looking for More?

Register now for our final webinar of 2025:  

• November 5th - Marketing and Fundraising

For past webinars and quick productivity tips, subscribe to our YouTube channel here.

Past webinars:

• Organizational Strategy
• HR & Leadership
• Operations

Good luck!