pic from Rock2292 

A nonprofit’s capital is its workers, cash and the in kind goods and services it receives. 

For those nonprofits who are just starting out a fiscal intermediary consulting firm may be the best option.  However, any organization should consider various degrees of the services.  The fiscal intermediary usually can provide five different lines of consulting services that will provide all the administrative services a nonprofit organization will need.  The product lines should be:  Working Capital Management, Employee Management, Treasury and Cash Management, Business Advisory Services and Regulatory Compliance Services.  Each product line’s success is to be judged by the efficiency and cost savings it produces for each nonprofit.

Working Capital Management (WCMS) should be comprised of eight main services:  payroll, accounts management, general accounting, bids, contracting, pricing, purchasing, and cost analysis.  The Employee Management System (EMS) should be packaged within the WCMS system as a list of employees that will interface against the payroll systems.  With the payroll system, simple employee considerations such as deductions, taxes and benefits should be offered. 

The Treasury and Cash Management (TCM) service line should be aimed at providing treasury management services in such areas as 90 days cash flow and cash reserves.  In addition, 403b plan management, endowment management and capital expenditure management services on behalf of the nonprofits should be considered. 

Business Advisory services are an advisory role to the nonprofit.  The ad-hoc services area are:  business development consulting, business plan consulting, capital structure consulting, M&A services and fundraising.

Regulatory Services for nonprofits are the handling of the organization’s interaction with governing bodies, government agencies and financial intermediaries that require administrative forms, records sent or financial records distributed to others.

The key to success of a nonprofit is to know when to bring consulting resources to bear to increase the likelihood of the outcome that the organization is seeking.  It is easy to incorporate but harder to run an organization.  Consulting provides the latitude to tap into the many different expertises needed but within the costs of hiring a full time employee. 

The advantages for a nonprofit’s status allow for the organization to use an incubator while the leadership completes the task of building the mission of the organization.