Close out the year with our nonprofit end-of-year checklist

It’s that time of year again! The holiday season is about to kick off, and we are starting to focus on our new year strategy. But before you dive into your new goals for the upcoming year, take a moment to make sure everything is buttoned up and in a good spot to close out the year before you dive into 2023.

Start by evaluating your financials

A nonprofit organization’s budget and financials are some of the most important things to evaluate at the end of the year. Year-end reviews provide critical financial data about your organization, including revenue, expenses, and assets. They also help you get a good picture of your annual donations and current donation balance and ensure that your accounting records are accurate.

A good place to start is by reviewing the accounting reports for the current year’s income and expenses compared to the budget. This way, you can identify your nonprofit organization’s performance compared to what you expected. Take note of what went well and what didn’t so that you can identify areas to improve on in the new year. Also, don’t forget to account for year-end fundraising that will continue to come in. You can use past years’ figures to make an estimate.

If your organization expenses more than $750,000 in federal funding, this will also put you in a good spot to prepare for an end-of-year audit. Make sure that all of your financial documentation is organized and clean so that the process goes smoothly.

Take a look at your programs and objectives

Take inventory of the programs, goals, fundraisers, and initiatives that you did throughout the year. Audit each one and note the outcomes that came from them. Use this list to determine what worked and what didn’t work for your organization.

Here are some things that are important to take note of so that you can make informed decisions about the upcoming year:

  • Does this program continue to help us achieve our mission?
  • Did we have enough resources (funding and staff) to meet our goals and objectives?
  • How was the program or service received by program participants, volunteers, and/or your board of directors?

Measure your nonprofit’s results for the year

Measuring the results of your programs, goals, fundraisers, and other initiatives lets you understand the success of your efforts throughout the year, which can inform the decisions you make for the upcoming year and make adjustments where needed based on these results.

It’s important that your organization sets KPIs (key performance indicators) each year so that you can easily see if you are on track or not to meet goals and objectives. KPIs allow your organization to measure progress, make changes and adapt when needed, so essentially, they help you to make informed decisions and allow you to truly measure key objectives and goals.

Some great KPIs you can use to measure the results of your programs, fundraising activities, and objectives would be:

  • YOY (year over year) Growth
  • Program/Fundraiser ROI (return on investment)
  • Year-End Cash Balance
  • Donor Retention Rate

Send donor acknowledgment letters

As the end of the year approaches, one of the most important year-end activities you can do is to thank all of your donors!

It doesn’t matter how big or small they are. Every donor deserves recognition. You can send out a simple email thanking them for their support and letting them know the impact their contribution had on your organization and your cause. This will show them that you value them as a supporter and that you appreciate their contribution.

You can send out a simple email, a handwritten thank you note, or a card. Whatever you do, make sure it’s personalized and thoroughly shows your organization’s appreciation.

Some things you can include in your donor acknowledgment letters are:

  • A tax receipt to include in their annual return
  • Your plans or goals for the upcoming year
  • An explanation of what their donations helped you achieve

Start planning for the year ahead

The end of the year is the perfect time for nonprofits to make sure they start the new year off on the right foot. Take advantage of this time to thoroughly review all that this past year entailed and make adjustments where needed.

Celebrate your team

Last, but definitely not least, don’t forget to celebrate all of your team members. Your staff, volunteers, and board members have made it through another year, which may have been challenging, so take time to acknowledge and celebrate their accomplishments.

Need a little more help? Download our end-of-year checklist to start the planning process for next year.

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