What non-profit financial planning actually covers
Non-profit financial planning is not the same as for-profit business planning. There are no owners to compensate, no equity to distribute, and no exit to plan. But there is a board with fiduciary duties, a mission that requires funding, donors who expect stewardship, and a set of accounting rules that most board members have never been trained on.
The work usually covers three areas. First, reserve policy — how much cash the organization should hold, where it should be held, and under what conditions it can be spent. Second, investment oversight — if the organization has reserves or endowment assets beyond operating needs, how those assets should be invested, reported, and governed. Third, financial literacy for the board — making sure the people responsible for fiduciary oversight actually understand the financial statements they are approving.
We do not replace the organization's accountant or auditor. We provide the financial planning and investment guidance that sits between the board's fiduciary duty and the accountant's compliance work.
Non-profit planning shares principles with the broader business financial planning work we do across Northern New Jersey, but the governance structure, the tax rules, and the stakeholders are entirely different.
Reserve policy — the document most non-profits need and do not have
A reserve policy answers a set of questions that most non-profit boards argue about informally and never write down. How many months of operating expenses should the organization hold in reserve? Where should the reserve be kept — savings account, money market, invested portfolio? Under what conditions can the board authorize spending from reserves? Who approves the withdrawal?
Without a policy, these questions get answered in the moment, under pressure, by whichever board member speaks loudest. That is not governance. A written reserve policy gives the board a framework for making decisions before the crisis arrives, and it signals to donors and grantmakers that the organization takes stewardship seriously.
We help boards build reserve policies that match the organization's size, revenue volatility, and risk tolerance. For a small non-profit with stable grant funding, the reserve might be three months of expenses in a savings account. For a larger organization with volatile fundraising, the reserve might be twelve months with a portion invested for growth.
Investment policy and board-level oversight
When a non-profit accumulates reserves or endowment assets beyond its immediate operating needs, the board has a fiduciary duty to manage those assets prudently. In most states, that duty is governed by the Uniform Prudent Management of Institutional Funds Act, which sets standards for investment, spending, and delegation.
An investment policy statement translates that legal standard into practical rules. It names the asset allocation, the acceptable range of risk, the spending rate, the rebalancing triggers, and the reporting schedule. It also defines who is responsible for investment decisions — the board, a committee, or a delegated advisor.
We help boards draft and maintain investment policy statements, and we serve as the independent advisor the board delegates to when it does not have investment expertise in-house. We report directly to the board or its finance committee, and we carry no conflicts — we sell no products and earn no commissions from any fund or custodian.
Non-profit boards that are also managing charitable giving from donor families may find the connection to how we help families structure charitable gifts so the full value reaches the cause useful from the other side of the table.
“A non-profit board has the same fiduciary duty as a trustee. Most boards do not know that, and most advisors do not remind them.”
What working with us looks like
First meeting — the board conversation
We meet with the executive director and the board treasurer or finance committee. We review the organization's financial statements, reserves, existing policies, and investment accounts. We identify the gaps between the board's fiduciary obligations and the current practices.
Written policies and ongoing oversight
We deliver a reserve policy and, if applicable, an investment policy statement tailored to the organization. For ongoing engagements, we manage the investment portfolio, report to the board quarterly, and attend finance committee meetings as the independent advisor.
A note on fit
When this might not be right for you
Non-profit financial planning is not the right fit for every organization:
- Organizations that need an auditor or a bookkeeper. We provide planning and investment guidance, not accounting services.
- Organizations with no reserves and no prospect of building them. The work requires assets to manage or a plan to accumulate them.
- Anyone looking for a firm that earns fees on products sold to the non-profit. We are fee-only and product-neutral.
If any of those describe your organization, we will say so and help you find the right resource.
Frequently asked questions
Do you work with non-profits?
Yes. We provide financial planning, reserve policy development, and investment oversight to non-profit organizations across Northern NJ. We work with the board or finance committee as an independent advisor.
What is a reserve policy for a non-profit?
A reserve policy is a written document that defines how much cash the organization holds in reserve, where it is held, and under what conditions the board can authorize spending from it. It is a governance tool that brings discipline to a decision most boards make informally.
Can a non-profit invest its reserves?
Yes, within the guidelines set by state law and the organization's own investment policy. The Uniform Prudent Management of Institutional Funds Act provides the legal framework in most states. We help boards develop an investment policy that fits the organization's needs and fiduciary obligations.
Do you manage non-profit endowment assets?
Yes. We manage endowment and reserve investments under a written investment policy statement, reporting to the board or finance committee quarterly. We are fee-only and earn no commissions from any fund or custodian.
How do you charge for non-profit work?
We charge a flat engagement fee for policy development and an assets-under-management fee for ongoing investment oversight. All fees are quoted in writing before the engagement begins. We earn no commissions or referral fees.
Do you attend board meetings?
When appropriate, yes. For ongoing investment oversight engagements, we attend finance committee meetings quarterly to report on performance, review policy compliance, and answer questions. The board should hear directly from its advisor.