Running a nonprofit takes courage.
You’re not just managing programs or raising funds. You’re showing up every day for something bigger than yourself – for a mission that matters. And while the work is meaningful, it’s often overwhelming. Between deadlines, board meetings, grant applications, and day-to-day decisions, it’s easy for things to slip through the cracks.
Especially the financial stuff.
We’ve spent the past 20 years walking alongside nonprofits, and here’s something we’ve learned: financial clarity is a form of care. It supports your people. It strengthens your story. It gives you the confidence to lead, not just react.
When you work with enough nonprofits, you start to see the patterns. Some are inspiring, like the dedication of lean teams doing big things. Others are more concerning, like the common financial missteps that quietly hold organizations back from delivering on their mission.
You deserve better than that. So here’s what we’d want every nonprofit leader to know.
1. Compliance Isn’t the Finish Line. It’s the Starting Block.
It’s tempting to treat compliance as the end goal. You file your Form 990, you pass your audit, and you breathe a sigh of relief. But we’ve seen too many organizations stay stuck in this reactive cycle – focused only on checking boxes instead of building a financial system that truly supports their growth.
Compliance is important, but it’s only the foundation. Strong financial operations go further. They give you visibility into your cash flow. They help you track spending across programs. They let you walk into board meetings with real data that tells a clear story. When your numbers are working for you, you can lead from a place of knowledge instead of fear.
2. Being Grant-Ready Shouldn’t Be a Fire Drill
We’ve worked with so many teams that find themselves scrambling to meet funder requests – digging through spreadsheets, patching together program budgets, and rushing to clean up reports. It’s exhausting, and it often pulls attention away from the very work those grants are meant to support.
When your reporting systems are built with grant-readiness in mind, the pressure goes down and your confidence goes up. You know which programs are generating which outcomes. You can show how funds were used. You can demonstrate accountability without the panic. And funders notice. The more you can proactively tell your financial story, the more likely they are to believe in your capacity to steward their support.
3. Unrelated Business Income Can Be a Hidden Risk
It usually starts with a good idea. Maybe you rent out your event space, open a small gift shop, or offer consulting services. These ventures can generate helpful revenue but they can also create tax issues if they’re not clearly tied to your mission.
Unrelated business income, or UBI, often catches nonprofit leaders off guard. If the income exceeds $1,000, the IRS may require you to file Form 990-T and possibly pay taxes on it. We’ve seen organizations flagged during audits or penalized for things they didn’t know were a risk. Getting ahead of UBI issues means taking a closer look at all your revenue streams and asking, “Does this align with our exempt purpose?” That one question can save a lot of trouble down the road.
4. Washington Has Its Own Rules. And They Matter.
Every state has its own expectations for nonprofits, and Washington is no exception. If your organization solicits donations in the state, you’re required to register with the Secretary of State and renew that registration annually. You also need to include specific disclosures when fundraising, whether online, by mail, or in person.
These requirements aren’t always top of mind, especially for teams without a dedicated compliance lead. But skipping or delaying them can put your good standing at risk. It can also create doubt among donors who expect transparency and accountability. Staying on top of local rules isn’t just about checking legal boxes. It’s about building a foundation of trust with the communities you serve.
5. Nonprofit Leaders Need Financial Support That Feels Like Support
For many nonprofit leaders, financial management is the most isolating part of the job. It’s not the work you got into this field to do, but it’s the work that follows you home – the spreadsheets you worry about at night, the questions you’re not sure how to answer in front of your board, the uncertainty about whether your team has what it needs to make good decisions.
That kind of weight adds up.
The truth is, you shouldn’t have to be a financial expert to lead well. But you do need financial systems and people around you that make you feel supported – not judged, not overwhelmed, and not alone. Whether that’s an experienced internal team, a trusted partner like Supporting Strategies, or a combination of both, the right support should give you clarity, confidence, and room to focus on what matters most.
Financial peace of mind isn’t a luxury. It’s part of how you take care of your people and protect your purpose. And if no one has told you lately: You’re doing important work. You deserve support that honors that.