Financial Resilience: What Does It Look Like?
A nonprofit’s financial education deeply affect its ability to be sustainable. Without financial education, organizations are unable to make the most of their limited resources and may not recognize opportunities to grow or diversify their revenue base. An oft-cited study by the University of Indiana’s Center of Philanthropy showed that while 76% of the leaders of small and medium sized nonprofits rated their knowledge of financial concepts highly, only one third could answer three basic financial questions correctly.
2020 research conducted by Charitable Ventures for a collaborative of funders focused on raising working capital for nonprofits also identified financial education as a key need for nonprofits. Enhancing financial education, business planning, and similar needs would allow our nonprofits to better withstand financial shocks, the changing landscape of revenue and expenses, and build more resilient and effective operations.