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Financial accountability is a very important aspect of fundraising for nonprofit organizations in dealing with donors, recording costs, and updating those who support the organization. Donors are one of the most important parts of nonprofits in terms of fundraising and running a successful organization. According to the DMA Nonprofit Federation (2018), “Without donors, and fundraising activities to acquire and retain these donors, nonprofits could not remain active and their mission delivery would no longer be viable. Fundraising is both a short and long-term investment in the mission of the organization” (p. 1). Nonprofits succeed based on the people who give to their organization and without these funds, nonprofits would not succeed. In long-term planning for these nonprofits, it is important to know that your organization will still receive enough funds in the future. Donors are important but making sure one has long term donors is even more important.
It is also important to remember the costs of managing and fundraising nonprofits. Aside from the cost of starting the nonprofit, fundraising comes with costs such as marketing, travel, and advertising that needs to be considered. In any nonprofit organization, there are many expenses in terms of the finances of the organization. If the costs of running and maintaining the organization aren’t enough, the company will never be successful in the long run financially. One of the major financial expenses large nonprofits have is paying their employees. Yes, some have many volunteer workers, but in many, there are large payroll expenses that come along with running the organization. Both in the short run and long run, the many expenses of a nonprofit need to be recorded and planned for. Donations cannot be expected to cover all the costs of the nonprofit.
The most important part of fundraising is that donors, “want to know that their contribution goes into what the organizers claim” (Sequeira, 2018, para. 4). If donors believe that they are supporting a cause and an organization by donating to a nonprofit, they want guarantee that their money is indeed going to that cause. “For fundraising to be a smooth and successful affair, the organization has to be able to explain to any interested party how they operate” (Sequeira, 2018, para. 7). Charities have been questioned regarding their accountability. Are the children in Africa receiving the money people are donating? It is important to be sure the charities people are giving to are accountable for this reason. By keep the donors, volunteers, and staff up to date, people feel good about their donations and it will remind them of the needs and where the funds are going to. Some nonprofits have many areas that the funds and donations go to such as expansion costs, supporting various causes, or fulfilling various financial needs. “It is important for nonprofits not only to do the right things, but also to engage donors by reporting regularly to them about how their dollars are being spent” (Marenakos, 2011, para. 3). By engaging all involved in how the money is spent, it makes for a more successful nonprofit organization.
Financial accountability is successful when it is overseen by a person or a group of people. “There are three components to accountability — financial and regulatory compliance, stewardship, and donor trust” (Marenakos, 2011, para. 6). It is important that nonprofit organizations have someone who oversees their financial accountability. Although no organization hopes to have questions regarding their financial accountability, issues do arise and there needs to be someone accountable for fixing them and so forth. Reporting finances is a major part of financial accountability and needs to be done by all nonprofits. According to Marenakos (2011), “An organization’s audit committee — made up of several board members — should be responsible for monitoring financial reporting, internal controls, and business risks” (para. 8). By having someone accountable for all aspect of the organizations finances, it will reduce the likelihood of having any funding issues. Nonprofits also have financial goals, and this is a way to look at the previous years and the expenses and see what their goal can be for the present and future.
A nonprofit organization would not be successful without financial accountability. The money donors give as well as the costs of operating an organization need to be reported and calculated. By having set individuals to do so, it reduces mistakes and the risk of not having enough funds to sustain itself. The short term and long-term effect of financial accountability is the best way to plan and set goals for a nonprofit organization. When finances are accountable, it sets the stage for a successful organization

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