I came into this conversation thinking I knew how to raise money. Turns out, I've been fundraising with a broken financial house and didn't notice until Susan DeMarco walked me through it.
Susan DeMarco is the CEO of Brand K Partners, an accounting firm that works exclusively with small to mid-size nonprofits. She provides everything from basic bookkeeping to fractional CFO services. She's spent years watching nonprofits celebrate a major gift, then panic when they can't manage the financial complexity that comes with it.
In this episode, Susan names the five financial red flags that tank nonprofits, and it's not what you think. Growth without financial infrastructure is the first. Then revenue recognition confusion, fundraisers celebrate the commitment, finance knows it's not recognizable yet. Cash flow is the killer nobody talks about: you can have a $500,000 grant and still run out of money in month three if only 20% arrives upfront. Weak financial controls mean one person is handling deposits and reconciliation, which is a risk nightmare. And the biggest one: finance and development working completely independently, speaking different languages about the same money.
Susan's advice cuts straight through. If you're hiring a CFO or finance director, nonprofit experience matters. For-profit accountants don't understand restricted funding the way a nonprofit accountant does. Every grant letter is different, and if your finance person doesn't know that, you're in trouble. Before you celebrate a major gift, ask your finance team: Can we actually manage this? Do we have the infrastructure? If not, the money arrives and your books break.
The real kicker is this: fundraising success doesn't automatically equal financial health. It can feel like a win and a crisis at the same time. Susan walks you through what to watch for and the exact moment it's time to bring in outside help instead of hoping your one overworked bookkeeper figures it out.
If your ED and your finance person don't talk, or if you're not sure what "revenue recognition" means, this conversation is for you.
Podden och tillhörande omslagsbild på den här sidan tillhör
Rhea Wong. Innehållet i podden är skapat av Rhea Wong och inte av,
eller tillsammans med, Poddtoppen.
