Understanding what it really means for a nonprofit to be financially successful—and no, it’s not just about the size of your bank account. Beth Larsen, VP of Client Accounting and Advisory Services at JMT Consulting, explains.
Financial success, Beth explains, is fundamentally about “whether or not you have the resources to fulfill your mission effectively.” It’s a mindset shift from passive accounting to active financial management, where success is defined by the ability to match your assets to your mission-driven activities.
Beth digs into how nonprofits can and should assess their financial health by tracking three core metrics: monthly operating results, available unrestricted cash, and current ratio. She emphasizes that these metrics aren’t just nice-to-have—they’re essential to making real-time strategic decisions and maintaining stability in uncertain economic times.
“Most nonprofits are dealing with demand that far exceeds available resources,” she shares. “That means decision-making must be rooted in data and aligned with mission, not just money.”
The conversation moves from theory to practice, with Beth advocating for a solid financial foundation built on clean data, clear processes, and internal discipline. She outlines actionable best practices like having written financial procedures, separation of duties, automated systems, and integrated budget planning that includes development and operations.
Host Julia Patrick and Beth also reflect on their past experiences during the 2008 recession—where both faced impossible decisions around shelter programs and fundraising gaps—and draw relevant lessons for today’s leaders.
Whether your nonprofit is flying blind with checkbook accounting or wrestling with boardroom fear around financial topics, Beth’s calm, strategic approach lights a clear path forward. Her message is both urgent and empowering: “You can’t afford not to do this work.”