It happens all the time. A private-sector businessperson takes over as board treasurer and meets with the nonprofit staff to go over the new budget. In that meeting, the new treasurer finds that nonprofit accounting is a wee bit different from the for-profit world.
Treasurer: “So you’re projecting $270,000 in foundation and corporate grants. How confident are you about that number?”
Staff: “Well, you never know.”
Treasurer: “You never know what?”
Staff: “You just never know. We may get it all. We may get half of it.”
Treasurer: “And if we only get half of it?”
Staff: “We’ll have to improvise. Or hope something comes in over the transom. It usually does. That’s the only way we balanced the budget this year.” Continue reading