MISSIONS AND MARGINS: Nonprofits not

financial stability. Donors agree! In a 2022 survey, 59% of respondents ranked trust that the nonprofit would use the donation wisely as the most important factor when donating.

For both nonprofits and for-profit businesses, no matter how noble the pursuit or program, no organization can exist for long without minding the bottom line. Profit margins are the main indicator of how effective an organization will be in converting market demand into long-term stakeholder value.

time? What are the average monthly expenses? How many months of operating expenses could be funded with cash on hand? Are assets that can be easily liquidated sufficient to payoff outstanding debts as they become due? At the end of the month, does income exceed expenses?

All of the answers to these questions help to validate that there is sufficient profit margin to continue growing the business or serving the mission.

Revenue is a crucial indicator of success for nonprofits, established busi- which they can create a cycle of business development and innovation by investing in startups.

Startups are often the most innovative and dynamic organizations in a community, with a fresh perspective on existing problems or new opportunities. Northern Michigan’s angel and venture capital investors are particularly supportive and optimistic about the prospect of local startups’ ability to grow and scale.

Startups achieving the greatest success in accessing capital and gaining market traction are keenly focused on pursuing the fastest path to revenue and positive cash flow. They are constantly monitoring performance, iterating products and services, and pivoting when necessary. Likewise, established businesses and nonprofits must consider similar strategies when evaluating sustainability in a changing economic and social environment.

As such, executive directors, board members, CEOs and entrepreneurs should be in the regular habit of monitoring performance and financial health through trends in the revenue, expenses, assets and liabilities of their organizations.

With advances in accounting software, information is easy to interpret through built-in dashboards and comparative financial statements showing month-overmonth or year-over-year activity. Recite your mission statement three times before opening the report if this scares you.

Then some really fun questions you could ask of the information are: How are revenue and expenses tracking over

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SERVING: Grand Traverse, Kalkaska, Leelanau and Benzie counties nesses and startups alike. It affirms for a nonprofit that the need being addressed is indeed recognized and meaningful to the community and demonstrates donor confidence

For businesses, it validates the value proposition being offered and expresses consumer demand. As consumers, donors, and investors, we’re signaling to these organizations what matters most one dollar at a time.

And while nonprofits may provide essential community services and address social welfare needs, it is from the success of established businesses that entrepreneurs gain the wealth and resources with

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Ultimately, nonprofits, established businesses and startups must all prioritize financial sustainability to remain viable and make a meaningful impact in their communities. By focusing on revenue generation, innovation, and talent retention, these organizations can create a thriving ecosystem that provides value to stakeholders.

Now go put on one of your many hats, declare yourself a financial whiz and set your strategy!

Jody (Lundquist) Trietch is chief financial officer of Boomerang Catapult LLC. She is also owner of Taste the Local Difference and executive director of Northern Michigan Angels, an angel investment organization.