An accurate, on-time financial report does nothing for governance if nobody opens it. The fix is rarely more detail. It is a nonprofit financial reporting package built around what each reader needs to decide next.
In the JMT Consulting webinar "Are Your Financial Reports Being Ignored?", Buu-Linh Tran, CPA, SVP of Financial Solutions at JMT, moderated a panel of three nonprofit finance leaders: A. Michael Gellman, CPA, CGMA, co-founder of Fiscal Strategies 4 Nonprofits; Joanne Duncan, CPA, Principal at JM Duncan Consulting; and Sam Gaillard, CPA, CGMA, CFO and COO of CWI Works. Buu-Linh and Mike laid out the barriers framework in their article, Are your financial reports being ignored? This session went further, into what the two sitting CFOs and the consultant actually do to get leaders reading, trusting, and acting on the numbers.
The short version
- Getting the reports out the door is the middle of the process, not the end. The job is finished when someone uses them to make a decision.
- Build a package, not a single report: a graphic summary up front, summary statements next, and full GAAP statements underneath, with each audience seeing only the layers it needs.
- Lead with cash. A simple, direct-method cash flow forecast shows boards problems that an income statement can hide for months.
- Pick KPIs that track today's challenges, and retire them when those challenges are solved.
- Management reports can depart from GAAP when that serves the reader, as long as they show a path back to the audited statements.
Why accurate reports still go unread
Every panelist agreed that accuracy is the foundation. Mike compared it to triage in an emergency room: the patient has to be stable before anything else can happen. The mistake is treating accuracy as the finish line. As Mike put it, many finance teams feel their job is done once the reports go out, when "you could argue it's the middle of the process."
Attendees named comprehension barriers as the top reason their reports get skimmed or ignored, followed by a lack of perceived value. Joanne added a third that often goes unspoken: role confusion. Board members assume the treasurer has it covered, staff assume leadership does, and nobody's position description says otherwise. Buu-Linh has lived that as a board treasurer: when the financials come up, every head turns toward the treasurer, even though every board member shares the same fiduciary responsibility.
"There's a reason why it's called the finance department and not the accounting department."
Sam Gaillard, CPA, CGMA, CFO and COO, CWI WorksThe cost is time. Mike shared a recent exchange in which a board member said the board had been surprised by a result, and staff responded that the trend had been in the statements all along. Instead of working together, the two sides ended up working against each other. His question for finance teams: how many months went by where the trend was there and nobody recognized it?
Shift from accounting-centered to reader-centered reporting
The panel described a change in who the report is built for. Joanne calls it "shaking up the numbers": keep the GAAP accounting that earns a clean audit, then present those same numbers as a story leaders can act on. Early in her career she reported to a COO with a policy background who asked a simple question: can you explain the highlights to a non-financial person? Joanne credits that question with changing how she has reported ever since.
| Accounting-centered | Reader-centered | |
|---|---|---|
| Built for | Balance reconciliation and compliance | Operational decisions and program outcomes |
| Time frame | Explains past periods | Pairs results with rolling year-end projections |
| Format | One dense PDF sent identically to everyone | Role-based views and short written highlights |
| Measure of success | On time, accurate, and GAAP compliant | Read, understood, and used to decide |
Buu-Linh added a practical opening: an ERP change is one of the best times to ask report users what is and is not working. Too often the old reports get rebuilt as they were, when the new system could produce something far more useful.
Build a nonprofit financial reporting package, not a single report
Sam's most practical idea was to stop thinking of "the financial report" and start thinking of a package. Every reader starts from the same source numbers, but each audience sees a different depth.
"Your package might be 20 pages. Your board might only see four. The executives may see 10."
Sam Gaillard, CPA, CGMA, CFO and COO, CWI Works- 1
A graphic summary up front
Before any numbers, show three pictures: revenue and expense trends from the statement of activities, cash flow trends, and one view of long-term sustainability from the balance sheet.
- 2
Summary statements next
Condensed statements with a few sentences of explanation. Mike calls these executive summaries rather than dashboards, because the word carries less weight for non-financial readers.
- 3
Full GAAP statements underneath
The complete statements stay in the package as the foundation, available to anyone who wants to trace a number back to its source.
What each audience needs to see
Volunteer board
Sustainability measures, reserves, net asset trends, and strategic risk indicators, without getting buried in general ledger detail.
Executive leadership
A clear view of cash runway, monthly burn, and early warning signs, with enough time left to change course.
Program managers
Real-time grant budget burn rates, controllable expense variances, and simple tools to track project commitments.
Mike recommends at least two versions of the summary, one for the board and one for management, with department-level views added as needed. Joanne's go-to board visuals are simple: revenue by source compared with the prior year, expenses shown as a trend line against revenue, and a short written note on whether the organization is on target. A bar chart replaces column after column of comparative numbers.
Lead with cash, and forecast it
All three panelists came back to cash. Mike noted that readers rarely look at the balance sheet, and a cash view is what connects the budget conversation to it. Sam goes a step further. He emphasizes a cash flow forecast over a cash flow statement, built on the direct method: the cash that came in from these sources, the cash that went out for these expenses. Anything that left the bank but landed on the balance sheet, such as a prepaid expense, gets its own line or a note so nobody is surprised by it later.
Sam described a stretch when government reimbursements lagged for six to eight months. The income statement looked fine. The cash flow view raised a different question: did the organization need to add liquidity? "You can talk about it, but when they see it, then it becomes real."
Sam Gaillard, CPA, CGMA, CFO and COO, CWI WorksSam also described an advocacy organization whose board first did not trust invoiced pledges on the statements, then reversed course and asked to see them. After a couple of conversations, the real need became clear: the board wanted a better handle on cash. The finance team switched its primary working statement from the statement of activities to cash flows with a three- to six-month forecast. With trend data behind it, the board grew far more comfortable with where the organization could go and how much it needed to raise to stay sustainable. Sam's advice for moments like that: when people are caught off guard, listen, make the adjustments, and come back for a second conversation.
Choose KPIs that follow today's challenges
KPIs are where non-GAAP information does its best work. Mike sees them as the link between the balance sheet, the income statement, and where the organization is heading. Readers start with the KPIs, then go back to the statements. The panel's examples:
- Months of reserves
- Cash available to support reserves
- Net asset trend
- Revenue mix compared with prior year
- Salary and benefits as a share of expenses
- Budget variance on key drivers
- Event registrations or attendance
The common mistake is never changing them. Mike described an organization that was cash-tight for years and tracked days of cash closely. It fixed the problem, and it was still spending three or four KPIs of board attention confirming it had 100 days of cash. Choose KPIs based on the challenges in front of the organization now, and invite new board members to suggest what they want to watch. As Sam put it, finance can often hear what is coming before anyone can see it in the statements.
Two cautions came with that freedom. First, a summary or dashboard should be respectful to GAAP: if pledges were added back, a piece was shown on a cash basis, or inventory was left out, say so, and show the path back to the audited statements. Second, as Joanne noted, a budget variance is only meaningful if the budget was loaded the way revenue and expenses actually arrive.
What finance teams told us
Live polls during the session showed a clear gap between where teams are and where the panel recommends going.
Comprehension barriers ranked first, followed by a lack of perceived value. Responses spread across all four options, which the panel read as a sign that most organizations face some of each.
Traditional PDF or Excel statements focused on past results ranked first, followed by standard statements with a brief written cover. Mike's read: dashboards still have a lot of ground to cover.
Most teams answer questions informally, as they come up, rather than building short teaching moments into regular board and staff meetings.
Make reports easy to reach and easy to understand
Access barriers are often small and fixable. Mike, who serves as a volunteer treasurer on several boards, has one standing request: a text message with a link when the financials come out. Buu-Linh noted that a dashboard should not be the only channel. Most modern systems can also email the statements as a PDF or Excel file, so readers can reach the numbers whichever way they prefer.
Understanding comes from ongoing, informal education. The panel's suggestions:
- Use 10-minute segments in regular meetings to explain one ratio or concept at a time.
- Keep an open door for informal variance reviews, and get out of the finance office between month-end closes.
- When someone is stuck, take an extra minute to explain it, without being condescending.
- Use the dashboard and KPIs to orient incoming board members. Both Mike and Joanne answered "100%" when an attendee asked whether this works.
- Have conversations before the financials come out, so the relationship is built before the numbers arrive.
Start forecasting, even if it is a small version
Buu-Linh still meets many finance teams that compare budget to actual but never forecast, not even at midyear. Mike's view is that teams skip it because they expect a lot of work and do not see the value. It does not have to be a full forecast. Isolate the two or three drivers that matter most, which is usually funding, and project those. Joanne added a bonus: a regular forecast does much of the work of building next year's budget.
Final takeaways from the panel
"Sit down, look at your reports, are they meaningful, and enjoy it. Shake those numbers up, and tell the story in a different way."
Joanne Duncan, CPA
"Stay curious. Keep thinking about what's going on. And keep looking at how you can change things to speak to what folks are telling you their needs are."
Sam Gaillard, CPA, CGMA
"Have these conversations before the financials come out."
A. Michael Gellman, CPA, CGMA
About the speakers
- Buu-Linh Tran, CPASVP of Financial Solutions, JMT Consulting
- A. Michael Gellman, CPA, CGMACo-founder, Fiscal Strategies 4 Nonprofits
- Joanne Duncan, CPAPrincipal, JM Duncan Consulting
- Sam Gaillard, CPA, CGMACFO and COO, CWI Works
Quotes are from the live session and lightly edited for readability.
Nonprofit financial reporting package FAQs
What should a nonprofit financial reporting package include?
A nonprofit financial reporting package typically layers three things: a graphic summary of revenue and expense trends, cash flow, and sustainability measures; condensed summary statements with short written explanations; and the full GAAP financial statements underneath. Each audience receives only the layers it needs, so a board might see four pages of a 20-page package.
How should financial reports differ for the board, executive director, and program managers?
Boards need high-level sustainability measures such as reserves, net asset trends, and risk indicators. Executive leaders need cash runway, burn rate, and early warning signs. Program managers need real-time grant budget burn rates and controllable expense variances. All three views should draw on the same underlying numbers.
Why should a nonprofit board see a cash flow forecast?
An income statement can look healthy while cash is under pressure, for example when government reimbursements arrive months late. A simple cash flow forecast built on the direct method, showing cash in from each source and cash out for each expense, makes those gaps visible early enough for the board to act.
Which KPIs should nonprofits include in board financial reports?
Common choices include months of reserves, cash available to support those reserves, net asset trends, revenue mix compared with the prior year, and salary and benefits as a share of expenses. The best KPIs track the organization's current challenges and should be replaced once a challenge is resolved.
Can nonprofit management reports depart from GAAP?
Yes. Internal management reports and dashboards can add back pledges, show items on a cash basis, or add commentary that has no place on a GAAP statement. They should remain respectful to GAAP by noting each adjustment and showing a clear path back to the audited financial statements.
How can a small nonprofit finance team start forecasting?
Start with a mini forecast rather than a full one. Identify the two or three drivers that matter most, usually funding sources and major expenses, and project those through year-end. Even a midyear forecast gives leaders insight and does much of the groundwork for the next budget.
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