Savvy? Improving nonprofit financial literacy

Transparency, fiscal responsibility, accountability: not words that sound very appealing to most. Rather than pouring over cash flow projections, or preparing prospective budgets, many nonprofit executives and staff would prefer to focus on implementing programmatic activities, and positively impacting their communities. However, financial health is crucial to the success of any nonprofit. Funding sources, in particular, look for transparency and accountability in an organization’s finances when making grant decisions. 

A relatively new topic of study, nonprofit financial literacy is the subject of a recent report from the Moody’s Foundation and the Center on Philanthropy at Indiana University. Only 6.9 percent of respondents claimed financial expertise, and 17 percent self-identified as “novices” when it came to financial literacy.

There are many steps that nonprofits can take to improve their financial savvy. Only 26 percent of respondents stated that their board of directors was “very involved” in financial planning. Financial oversight from the board helps to guide fundraising efforts, and overall strategic decision-making. Keeping accurate financial records will directly affect and lead all future program activities. In addition, keeping a cash reserve and conscripting independent financial audits are good ideas, particularly in today’s volatile economy.

Enhanced financial literacy will improve the overall sustainability of your organization by increasing your chances of obtaining grants, passing due diligence inquiries, and expanding your donor base. In the end, nonprofits need to answer to their donors, through providing transparent, readily available financial statements, and through the efficacy of their programs.

Happy Financial Literacy Month!

Photo courtesy


Teens get first-hand experience in grant review

As anyone who has been involved in any aspect of the grantmaking cycle knows, reviewing grants is a very involved process. Now, members of the Center for Arab American Philanthropy’s Teen Grantmaking Initiative (TGI) are learning about this process firsthand. Members of the group began reviewing grant applications in February after having released their first request for proposals in January. The 20 teens received training from Center for Arab American Philanthropy (CAAP) staff on the elements that make up a successful grant proposal, including the importance of the proposal having clear, measurable goals and the potential for larger impact. Running through an example proposal helped members discuss what to look for as grant reviewers.

TGI received 24 proposals from Metro Detroit youth-serving organizations. Using a scoring sheet system, they split into groups of three and reviewed five-six proposals each. Afterward, the youth came together as a large group and presented to each other their opinions of the proposals they read. Members had great discussions and even debated a little, and by the end of the meeting, they narrowed the number of proposals down to 17 they would like to further review. TGI plans to make site visits to some of the organizations and will meet again in late March before making final decisions.

TGI is a group of 20 youth working to make a lasting difference in their community through grantmaking. Keep up with the young grantmaking mavericks on our website here.


Center for Arab American Philanthropy
2651 Saulino Ct.
Dearborn, MI 48120


The Center for Arab American Philanthropy (CAAP) strengthens the impact of strategic Arab American giving through education, asset building and grantmaking, in order to improve lives and build vibrant communities.

Like Us on Facebook