Unlocking Insights: 2023 Journal Reflection Prompts

If you love to use the end of the year to reflect and plan (then we should be BFFs because I do too!), I have a few questions that may guide your reflection time and help you strategize for next year.

Here are some questions and prompts for journaling and reflection:
  1. Write down a few wins (personal and professional) for every month of 2023. Use your calendar, your planner, your email, your photos to help you remember back to each month of 2023. Notice what happened in the months prior to the wins too.
  2. What new things have entered your life in 2023 that you’re grateful for?
  3. When did you feel most at peace?
  4. How did you show up for yourself well?
Now thinking about what felt sticky or clunky or just plain bad…
  1. What are you ready to leave behind?
  2. How can you show up for yourself better?
  3. How can you show up better for those around you?
  4. What can you be more consistent with?

And thinking ahead to 2024…
  1. What big changes do you anticipate? How can you prepare?
  2. What do you want your life to look like in one year?
  3. What are the things, people, or situations you want to invite in?

And of course, once I’ve journaled my heart out, I love to take a look at my numbers and see how my income statement stacks up against my wins and challenges.
  1. Does our revenue reflect what went well?
  2. Did we invest (i.e. spend money) in a way that felt aligned with our goals?
  3. What fundraising strategies got results and what can we leave behind as we enter 2024?
build financial health

7 Ways to Build Your Nonprofit’s Financial Health

Is your nonprofit financially healthy? Are you looking for ways to boost your organization’s long-term financial sustainability? If so, you’ve come to the right place. Before we dive into the seven ways to build your nonprofit’s financial health, let’s first discuss what it means to be a financially healthy organization. 

What is financial health? 

In short, financial health means sustainability. Are we going to be able to do this work next year? What about five or even ten years down the road? Do we have enough financial and human resources to keep doing this work as long as we need to? 

And just how do we figure out these things? By doing some math. I know. I know. But stay with me here. I know it’s a chore for most nonprofit leaders, but it is still important to determine our organization’s financial health. 

We need to answer these questions: 

•How much money do we have in the bank?

•How long could we operate if no more money comes in the door? 

•How are we spending that money?

•Where’s that money coming from? 

For all the “math haters” out there, I’ve got something just for you, The Financial Health Checkup. It’s a simple spreadsheet that will walk you through five important financial metrics and give you a crystal clear picture of how your organization stacks up. And the best part is: no math required!

After you’ve answered those questions and tracked the metrics on the spreadsheet, you’ll have your benchmark. Keep in mind a “good” number is going to look different from organization to organization. From here, we can look at ways to build or elevate your nonprofit’s financial health. 

Seven things you can do to boost your nonprofit’s financial health

1. Prepare your plan

One crucial thing that is almost always missing from strategic plans is financial management. This can be anything from providing timely analysis and forecasting for better decision-making or building a diverse, durable, and flexible revenue portfolio. Be sure to include specific things inside your strategic plan that are related to financial management. For example: maintain a fully funded six-month operating cash reserve. This is a crucial step because what gets measured gets done. 

2. Know your numbers

You may not have a clear sense of your current financial health. Maybe you just know that things don’t feel good and you want to be prepared, but you can’t pinpoint exactly what to change. That is exactly why calculating and reviewing sets of metrics that are relevant to your organization is essential. It is going to help you understand if you are financially sustainable and build a plan… rather than just crossing your fingers and hoping for the best.

3. Create a cash stash

Building a cash reserve is important for your long-term financial sustainability. If you’re living donation to donation or building a zero-based budget every year, it leaves you no money for savings. Before you start building your cash stash, you need to figure out if you already have a policy on a cash reserve and if you are adhering to it. If you don’t have one, talk to your board and think about creating one. A great starting goal is a three-month cash reserve. Create a plan for how you are going to build up your funds and start including savings transfers into your finance routine each month. 

4. Check on your bookkeeping

I know that bookkeeping feels like such a boring task that nobody wants to look at or deal with. But bookkeeping is a vital part of the financial health of your organization. You will not understand your financial health if you do not have timely, accurate bookkeeping with checks and balances to review things because it provides important data to drive decision-making.

5. Reinforce your revenue

Understanding your organization’s current revenue diversity is the crucial first step in reinforcing your revenue. From here you can figure out your current risk level and if there are any areas or periods of time that are more risky than others. Once you know exactly where your organization stands, you can create a plan to work on spreading out your risk and diversifying things. 

6. Edit your expenses

Analyzing your nonprofit’s monthly expenses to determine what’s contributing towards the growth of the organization and what is not, is the first step in editing your organization’s expenses. Look at your expense and fundraising ratios to see if there are any extra expenses your organization isn’t currently utilizing. From there, you can determine if the money can be redirected elsewhere.

7. Review your relationships

Reviewing your relationships comes in two parts, your vendors and service providers along with donor relationships. Assess all of your agreements with vendors and service providers to understand specific contract commitments, fee structures, cancellation policies, and any other financial commitments. Focus on true relationship-building with donors, going beyond asking for money. Cultivating and growing existing donors is less expensive and time-consuming than adding new donors. 

Final Thoughts and Resources

We just did a quick breakdown of the seven things you can do to build your nonprofit’s financial health. If you can’t get enough and are looking for even more information on this topic, I have some resources for you!

FREE Financial Health Calculator 

The 7 Ways to Build Your Nonprofit’s Financial Health Podcast Episode

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