Rachel DeMatteo, a Director at Your Part-Time Controller (YPTC), discusses the importance of forging strong relationships between nonprofit organizations (NPOs) and foundations with effective communication, understanding, and collaboration. YPTC is a company that provides financial services to nonprofits and has recently launched a foundations vertical to specialize in working with foundations.
Dematteo highlights the significance of being audit-ready for nonprofits. She explains the difference between external reports, such as audits and 990 forms, and internal reports. Foundations often request audits and 990 forms to gain confidence in the financial information provided by nonprofits. Dematteo suggests that foundations should consider the capacity of nonprofits and the level of financial information they can provide. She encourages foundations to have open conversations with grantees to better understand their financial practices and explore ways to support them in improving their back-office operations.
The discussion also focuses on the challenges nonprofits face when dealing with grant requirements and templates. Dematteo acknowledges that foundations use templates to ensure consistency but warns about the potential for errors and the need for interpretation. She suggests that foundations consider using the categories from the 990 form, which is a more universal language for financial reporting in the nonprofit sector.
The interview touches upon the changing landscape of philanthropy and the increasing emphasis on trust-based relationships between foundations and nonprofits. Dematteo mentions that some foundations are reevaluating their grant requirements and seeking feedback from grantees to streamline the application process and make it more cohesive. Both the foundations and nonprofits are encouraged to have open communication and build partnerships to achieve their shared goals.
The conversation concludes with a discussion on the percentage of revenue nonprofits should aim to receive from foundations. While it was previously recommended to not exceed 30%, the influx of funding through programs like the CARES Act and ARPA has altered the landscape. The need for greater flexibility and understanding in grant-making is emphasized, with the hope that foundations continue to evolve and support the sector effectively. More about Your Part-Time Controller.
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