When Math Meets Creative: Defining Your Nonprofit Financial Terminology
Unless you are the chief financial officer or the accountant/bookkeeper at a nonprofit, you may not be aware of how financial transactions work. Perhaps you are the graphic designer and your mind is swelling with visual ideas. Aside from making the cost of the upcoming fundraiser look fancy on a flyer, you may not have the head for figures.
How does a nonprofit join together the math and the creative forces on its team?
Words are a good place to start. Development associates deal with words to encourage donors to send hefty checks. Marketers use words to clarify the nonprofit’s mission on websites, social media, and printed materials. If the financiers can find a common vocabulary, then they can communicate the number side of things to the rest of the staff.
The bottom line for a nonprofit is budget. Every pizza ordered for a late meeting and every stamp purchased for a mass mailing receives a line on a spreadsheet that the board of directors must approve. Spending more than the allotted budget is generally a no-no. If you do spend more, then you better have a good reason for it. As a result, all staffers need to be on board with the budget. When everyone uses the same terminology, communication is possible. The key is for financiers to define the terms in clear, colorful language, in essence the language of the staff.
For example, if you are speaking to staff about “accounts payable,” it is imperative to use a definition that is relevant to what the specific staffers spend, whether that involves supplies, people, or services. Also, certain words like “petty cash” can conjure up perverse thoughts about ready money. Defining petty cash and its specific uses establishes universal rules and regulations.
Meetings that focus on money should not elicit the same pain as a root canal. Organizations can make financial words and discussions pleasurable. The image of bored people sitting around a board table with piles of spreadsheets does not have to be the norm. Just as students retrieve information in different ways, such as kinesthetic games and visual aids, so do staffers.
One former chief financial officer provides a “Finance for Poets” training workshop that involves role-playing to actively engage staff in understanding financial words and behaviors. Bridgespan provides further information to inspire your next money meeting in How to Talk about Finances.
Ultimately, financial jargon is not a foreign language diametrically opposed to the creative side of a nonprofit. If an organization wants to move forward with its worthwhile mission, then its entire staff should have fun learning the details of why $ = :).