I know a lot of small nonprofits that don’t yet do proper accounting or provide regular reports.  I know this is hard.  I’ve been there myself.  Every nonprofit organization ought to provide publicly transparent written financial reports, including a balance sheet and an income statement.  That’s a best practice.  But certainly, at least, as I said in the book, if you’re large enough to have a board focused on oversight, then you definitely need to keep that board informed through monthly financial reporting.  They’re not going to be informed otherwise, and they need that information to do their job as a board.

If your organization is just getting started — or needs to get started — with accounting, here are a few quick-start ideas that I hope will help:

• Get QuickBooks.  There are many low-priced online software packages available, but QuickBooks is a good one, it’s the one I use, and I recommend it.  I learned what little I know of accounting mostly from QuickBooks tutorials and customer support, and it’s helped me run small businesses and oversee nonprofits for more than 10 years.  Startup prices are low enough that I think every organization should have this software or an equivalent, and use it.  It’s not a lot of money to pay for something that really is an ethical responsibility.
• I strongly believe that every nonprofit needs a professional accountant.  I’m trying to help you understand enough terminology to ask your financial professional for detail on your organization’s financial statements.  I don’t want you to go it alone without a professional.  Having said that, I know that the very smallest organizations really don’t have the funds to hire a financial professional.
  To those of us in this situation, my advice is to do the best you can, but make hiring a financial professional a high priority for your funds.  It is an ethical responsibility.  At least get your books reviewed every year.  Sometimes folks feel they can go it alone, and yes, if your revenue is just a few thousand dollars, I can’t ask you to spend a huge chunk of it on accounting.  But if you don’t yet have a financial professional, make it your short-term goal to retain one.  Do some research and find out how much an annual review would cost, how much a tax filing would cost, how much monthly bookkeeping would cost.  Make it your goal to get those funds and to devote them to professional accounting.
• For organizations that really don’t have anyone around who’s comfortable with computers or with numbers, I wonder if your local Jewish Federation, movement (if you’re a synagogue), or other local umbrella groups could help.  I think providing pooled resources to help very small nonprofits maintain quality financial statements would be a wonderful, selfless move from the donor community that could have a huge multiplier effect in getting many of our smallest nonprofits off the ground by attracting board members and providing clarity on their financials.
• Get involved with an organization like SCORE — the Service Corporation of Retired Executives — or other local mentorship opportunities.  Find a mentor with nonprofit and/or business experience who can teach your group concepts and also hold you accountable to produce reports.
• On the bright side, if you’re that small an organization, your reports are likely to be very simple.  Producing them diligently will attract the kind of board members who can help you get to the next level, and will place you in position to handle greater revenue effectively and ethically.
• Also on the bright side, I’ve always found that good accounting practices help me save a lot of money.  All those little receipts can add up to tax deductions if you enter them appropriately and keep good records.  And even if your organization is very small, you can learn a lot about your trends and trajectory by keeping good financial records.

I know how difficult it can be to do this when you’re just starting out.  I like the idea of pooling local resources to provide anything from mentorship to bookkeeping for organizations that don’t yet have the capacity to do these jobs internally.  I’d like it if we as a nonprofit community (and if we as a Jewish community) could look into that, and publicize opportunities that already exist.