Episode Summary: Nonprofit Finance – Balancing Passion, Compliance, and Impact with Shane Rowley

Podcast: What the Fundraising
Host: Mallory Erickson
Guest: Shane Rowley, CEO and Founder of Nimble
Release Date: February 25, 2025
Duration: Approximately 26 minutes

Introduction

In Episode 228 of What the Fundraising, host Mallory Erickson welcomes Shane Rowley, the CEO and Founder of Nimble, an outsourced accounting firm catering to small businesses and nonprofits. Mallory shares her personal positive experience with Nimble, highlighting Shane's exceptional support during a challenging financial situation. She emphasizes the importance of trusted financial partners in the nonprofit sector, setting the stage for an insightful conversation on managing nonprofit finances effectively.

The Cost of Self-Reliance in Nonprofit Finance

Shane Rowley opens the discussion by addressing the prevalent mindset among nonprofit leaders who believe they can manage all aspects of their organization, including finance, without professional help:

"We are self starters. We have this like mantra like we can do anything, which I think is beautiful. It's why we're successful in what we do. But I think the question to ask is, what is the cost of doing that? We're not just talking like a monetary cost."
– Shane Rowley [00:32]

Shane explains that many nonprofits start with a strong vision and mission but often lack the financial expertise necessary to sustain their operations. This self-reliant approach can lead to significant challenges, such as inconsistent bookkeeping, turnover in financial positions, and outdated financial systems. These issues not only create operational inefficiencies but also cause anxiety among board members concerned about compliance and fiscal responsibility.

Empowerment Through Financial Partnerships

Mallory echoes Shane's sentiments, sharing her struggle with understanding nonprofit finances and the relief she found in partnering with Nimble. She highlights how having a reliable financial partner transforms numbers from daunting obstacles into empowering tools for storytelling and strategic decision-making:

"Having a great financial partner is that the numbers and the like can start to become empowering. [...] You can start to storytell around them. And as a fundraiser, that can become really empowering and really helpful."
– Mallory Erickson [15:41]

Shane builds on this by emphasizing the importance of aligning financial data with the organization's mission to ensure authenticity and integrity in fundraising efforts:

"The authenticity, the validity, the integrity of everything you're doing is really at stake."
– Shane Rowley [16:43]

He further explains how accurate and transparent financial reporting can enhance credibility with donors and stakeholders, making fundraising efforts more effective.

Practical Steps for Managing Nonprofit Finances

The conversation delves into actionable advice for nonprofit leaders to better manage their finances. Shane outlines a three-phase approach:

1. Understanding the Past:

   "The best predictor of the future is the past. And so if we're not happy with how things are moving in the past, well they're just going to continue that way unless we disrupt it in some way."
   – Shane Rowley [21:05]

2. Analyzing the Present:
   Reviewing current financial statements and assessing the organization's financial health.

3. Planning for the Future:
   Forecasting and budgeting based on desired outcomes and ensuring that financial strategies support the mission.

Mallory adds that this structured approach allows nonprofits to make informed, data-driven decisions, facilitating agility and responsiveness to changing circumstances:

"We need other data inputs to help us see the big picture."
– Mallory Erickson [18:37]

Shane reinforces the necessity of integrating financial expertise with operational knowledge to foster scalability and sustainability:

"We have to marry that information together and add a voice with it and reason and just a sounding board and then everything can kind of just accelerate from there."
– Shane Rowley [20:21]

Addressing Common Financial Challenges

Shane identifies common pitfalls nonprofits face, such as:

• Inexperienced Financial Roles:
  Many nonprofits appoint board members or volunteers with limited financial expertise, leading to high turnover and inconsistent financial management.

• Outdated Systems:
  Nonprofits often rely on antiquated financial systems that hinder efficiency and accuracy.

• Compliance Concerns:
  As organizations grow, the complexity of financial compliance increases, necessitating professional support to navigate audits and tax filings.

He draws a parallel between the fear of managing finances and his personal fear of dental visits, illustrating the transformative impact of having a dedicated and supportive financial partner:

"That's exactly what we want to do. We want to take these amazing board members and board of directors that have this amazing vision and not for profits and be with them in that."
– Shane Rowley [09:16]

Maximizing the Value of Financial Data

Shane discusses how accurate and insightful financial data can drive strategic fundraising and operational decisions. By presenting financials that align with the organization's mission, nonprofits can enhance their credibility and attract more support:

"We can tell you what's going on and see trends, see analysis, see impact, and then add in the heart of the founders or board of directors."
– Shane Rowley [17:02]

Mallory emphasizes that understanding financial trends enables nonprofits to identify cost overruns and inefficiencies that may impede their mission delivery:

"It's like I'm just out there buying farm supplies and I never noticed how much that cost. And you sort of have to look at all the data of those numbers together to realize like, hey, something's going on here."
– Mallory Erickson [17:57]

Affordable Access to Financial Expertise

Addressing concerns about the affordability of professional financial services, Shane highlights how advancements in technology have made outsourcing more cost-effective:

"The cost today with the technology is so much more affordable than it's ever been."
– Shane Rowley [23:14]

He encourages nonprofits to consider outsourcing their financial management to ensure accuracy, reliability, and scalability, which ultimately frees them to focus on their mission:

"It's so affordable now. [...] We're pretty shocked if anybody can do it in house for cheaper than our service just because of what we can do on the back end with technology."
– Shane Rowley [23:21]

Conclusion and Takeaways

Shane and Mallory conclude by reiterating the importance of partnering with trusted financial experts to enhance nonprofit sustainability and impact. Shane invites listeners to connect with Nimble through their website or LinkedIn for personalized financial support.

Mallory wraps up the episode by encouraging listeners to apply the insights shared, highlighting the transformative potential of effective financial management in achieving fundraising and organizational goals.

Key Takeaways:

• Evaluate the true cost of managing finances in-house versus outsourcing.
• Implement a structured approach to understand past financial performance, analyze present conditions, and plan for the future.
• Leverage accurate financial data to enhance storytelling and strategic decision-making in fundraising.
• Consider the affordability and benefits of partnering with specialized financial firms like Nimble to ensure compliance and scalability.

For more resources and to connect with Shane Rowley, visit TrustNimble.com or find Shane on LinkedIn.

Additional Resources:

• Visit MalloryErickson.com/Podcast for top tips, tools, full transcripts, quotes, videos, and more.
• Join Mallory's free webinar on March 11th at 2:00pm EST with GiveButter to learn how to create belonging-first fundraising events.