This content is password-protected. To view it, please enter the password below.

Password:

The financial landscape for nonprofits is undergoing massive change, facing challenges from evolving federal grant funding to the pressure of inflation and staffing shortages. 

According to BTQ research, with 72% of nonprofits struggling with staff turnover and 36% experiencing cash flow issues, mission-driven organizations are discovering that traditional approaches to finance and accounting no longer suffice.

The combination of cloud-based accounting software and Finance as a Service (FaaS) offers a powerful solution, addressing immediate operational challenges and positioning nonprofits for sustainable growth and greater mission impact.

The Case for Modernization in Nonprofit Finance

Nonprofits face mounting financial and operational challenges — from staffing shortages to changing grant structures and inflation-driven cost increases.

Michael Blanton of Sage emphasized that the pace of change in nonprofit finance is unprecedented, noting how modern finance teams are being forced to adapt quickly to evolving funding environments and technologies.

“We’ve moved from asking, ‘Can we afford technology?’ to ‘How can we survive without it?’” — Michael Blanton, Sage Intacct

According to Sage research, the core internal challenges plaguing nonprofit finance teams have remained consistent:

• Limited process automation and outdated systems
  
• Inefficient, manual reporting
  
• Difficulty recruiting and retaining qualified finance staff
  
• Lack of real-time visibility into key metrics

By modernizing their systems, nonprofits can shift from reactive financial management to a proactive, strategic role that supports their mission.

The Power of Cloud Accounting for Nonprofits

Cloud-based accounting software — like Sage Intacct, BTQ Financial’s core general ledger platform — delivers automation, scalability, and transparency that traditional systems can’t match.

Joyce Denison of BTQ Financial explained that Sage Intacct is purpose-built for nonprofit accounting, offering essential features such as:

• Automated and customizable financial reporting
  
• Built-in grant management and fund tracking
  
• Multi-entity consolidation and real-time dashboards
  
• AI-driven automation to improve efficiency and accuracy

“At BTQ, we selected Sage Intacct because it’s designed specifically for nonprofits and empowers our clients with real-time, actionable insights.” 

Cloud accounting allows teams to stay current with evolving technologies, enhance security, and integrate seamlessly with donor management systems — all while reducing overhead and IT dependency.

The Strategic Advantage of Finance as a Service (FaaS)

While cloud technology provides the platform, Finance as a Service (FaaS), as delivered by an expert like BTQ Financial, provides the complete solution—technology, people, and processes. FaaS eliminates the immense burden of managing a complex, internal finance function.

“Having a finance partner that can grow with you is critical as you get additional funding. Having a partner that knows what’s next and what’s required can really take your organization to the next level,” said Denison.

FaaS solves the main obstacles of moving to the cloud:

• Eliminates Long Implementation: BTQ provides a ready-to-go environment, getting clients up and running in 60 to 90 days.
• Fixed, Transparent Costs: Removing the high, variable cost and team-time drain of custom-building an ERP.
• Expert Talent: Providing full Finance & Accounting (FNA) function, including VP/CFO-level financial leadership.

This comprehensive partnership extends benefits beyond the back office. BTQ’s finance solutions empower every level of an organization:

• Program Managers gain accountability and insight into their specific budgets with transparent dashboards.
• Executive Leaders make more confident, data-driven decisions.
• Boards and Stakeholders have increased confidence and trust in the financials.

This partnership-based approach ensures nonprofits focus on their mission—not their month-end close.

Case Study: How The Door Transformed Its Financial Operations

When The Door, a New York City–based youth services nonprofit, became independent from its parent organization, it needed to rebuild its entire financial infrastructure.

Partnering with BTQ Financial, the organization:

• Modernized its tech stack using Sage Intacct
  
• Improved financial visibility and audit readiness
  
• Enhanced reporting and leadership decision-making
  
• Achieved over $1 million in savings within 2.5 years

“With those foundations in place, The Door was able to make faster, data-driven decisions and strengthen its financial health.”

This case highlights how modern financial solutions not only streamline operations but also deliver measurable cost and impact benefits.

Partner with BTQ Financial to Elevate Your Mission

Nonprofit finance is about enabling mission success. With BTQ, your organization gains a trusted partner to deliver efficiency, visibility, and strategic insight.

Ready to elevate your organization’s financial operations?

BTQ Financial helps you transform financial management into a growth catalyst for your mission.

Request a consultation today and discover what mission-driven finance can look like for your organization.

Grand Street Settlement, a nonprofit dedicated to providing opportunities for low-income families, shares its story of financial transformation with BTQ Financial. 

Facing critical challenges, the organization embraced a strategic partnership that enabled it to overcome financial instability and achieve unprecedented growth, expanding its reach and community impact.

Resolving Financial Obstacles for Sustainable Growth

Ten years ago, Grand Street Settlement was at a crossroads, struggling with financial management and the ability to track receivables. This instability threatened the organization’s long-term sustainability and its capacity to grow and serve the community. 

The leadership recognized the urgent need to resolve these issues to ensure their future.

“The biggest financial obstacles for Grand Street Settlement 10 years ago was our ability to bring in receivables and we were breaking the two cardinal rules of nonprofit financial management: timely and accurate reporting,” said  Robert Cordero, Grand Street Settlement’s Chief Executive Officer.

“We really needed to resolve the financial situation. There was no way that we were going to be able to be sustainable, much less grow.”

The BTQ Partnership: Listening and Liberating

The turning point came when Grand Street Settlement partnered with BTQ for specialized nonprofit financial support. BTQ’s approach was not just about numbers; it was about understanding the organization’s mission and becoming a true partner. 

By taking on the finance function, BTQ enabled Grand Street’s leaders to focus on their core mission and strategy.

“BTQ’s mission is to help a nonprofit thrive in their mission,” says Sisil John, BTQ’s Senior Vice President of Finance.

“We meet with our program leaders and we make sure that we understand their overall mission, the big picture so that they don’t have to think about the financials, they just think about strategy and growth.”

Tangible Results and Expanded Reach

The partnership with BTQ led to a dramatic turnaround. Within the first year, BTQ’s team identified three-quarters of a million dollars in receivables that had been overlooked. 

Over the next decade, Grand Street Settlement’s operating budget skyrocketed from $20 million to nearly $65 million, allowing them to expand into new locations and increase the number of programs and participants.

The Power of Trust and Embracing Change

A key element of Grand Street Settlement’s success was the board’s willingness to embrace a new model of outsourcing finance. This decision, though initially met with unfamiliarity, built a new currency for the organization: trust and confidence. 

By treating BTQ as an integral part of the executive team, Grand Street Settlement’s leadership demonstrated a commitment to sound financial stewardship, which in turn attracted more resources and unlocked growth.

“If the board, if our funders, if our donors do not believe that we’re good financial stewards, we’re not going to bring in more resources,” said Cordero.

Unlocking Mission and Impact Through Financial Partnership

Grand Street Settlement’s remarkable journey is a testament to the power of strategic financial management and the courage to embrace innovative partnerships. 

By addressing its financial pain points head-on, the organization was able to stabilize its operations and unlock unprecedented growth, proving that sound financial practices are the foundation for a nonprofit’s ability to fulfill its mission and create lasting impact.

Is your nonprofit ready to unlock its full potential? Contact BTQ today to learn how a dedicated financial partnership can help you achieve sustainable growth and expand your mission.

Renée Bonilla, Managing Partner of BTQ Financial, has received City & State’s 2025 Above & Beyond Award in Social Services.

This esteemed award recognizes notable figures driving innovation and leadership within the sector, including those identifying better practices, adopting technological innovations, and guiding organizations through complex challenges, enabling nonprofits to focus on their core missions.

“Our vision is to empower organizations, enhance and expand their impact by providing finance and accounting services that are just better, faster and more cost effective for them through a dedicated, specialized team, tech and services,” said Bonilla.

As Managing Partner, Bonilla oversees BTQ Financial with a focus on client satisfaction and growth. Her expertise is instrumental in BTQ’s mission to provide top-tier financial services, and she collaborates closely with clients to offer strategic guidance.

“My job is to ensure that we are living our vision, our mission, and our values every single day as an organization, and that we continue to serve the nonprofit sector.”

Bonilla actively participates in local nonprofit boards and is a member of National Charity League, a program devoted to empowering women to succeed as confident, well-rounded contributors to society and the communities they serve.

Her dedication exemplifies BTQ Financial’s commitment to empowering mission-driven organizations with finance and accounting solutions that enable maximum community impact.

View the original Newswire coverage here.

Nonprofit leaders reliant on government grants face both shrinking dollars and sharper questions about how every dime is spent.

With over two decades of nonprofit financial management expertise, BTQ Financial has helped over 70 nonprofits successfully manage over $1 billion in operating budgets through dynamic conditions.

We explore the reasons behind this shift in scrutiny and share key questions for organizations to ensure their finance functions are prepared, proactive, and transparent.

The Shifting Landscape of Financial Oversight

While we’re not seeing a full wave of oversight changes just yet, there are clear signs that expectations around accountability are tightening, especially for those organizations receiving government funding.

• Funding Uncertainty: Many nonprofits have experienced, or anticipate, reductions in government funding, leading to uncertainty in planning and staffing.
• Increased Scrutiny: There are early signs of increased attention on how funds are being utilized by nonprofits, with a shift towards greater scrutiny from funders.
• Federal Signals: Recent executive orders indicate a renewed federal focus on preventing fraud, waste, and abuse in public spending.
• Pass-Through Entity Requirements: Pass-through entities are increasingly demanding more documentation, active monitoring, and higher expectations from their subrecipients.
• Emphasis on Internal Controls: Funders are pushing for stronger internal controls and real-time compliance, not just during audits but throughout the year.

This new environment has created a lot of uncertainty about how to plan, how to staff, and how to respond when the funding picture shifts.

1. Do We Have Instant Financial Clarity?

Funder emails rarely wait for month-end. Data quality and system integration should enable you to tell your financial story in hours, not weeks.

“This isn’t just about access to reports, it’s about the quality of your data, how your systems talk to each other, and whether your team can tell the story behind the numbers.” 

• Funder Question Simulation: Regularly simulate funder questions, particularly concerning spend-down variances and restricted fund usage, to assess response capabilities.
• Understanding Regulations: within government contracts.
• Spend-Down Plans: to ensure effective and funder-approved utilization of funds throughout the year.
• Effective Financial Reporting Tools: Investing in and regularly reviewing accounting and grant management software for accurate and efficient reporting.
• Staff Understanding of Reports: All relevant staff should understand financial reports and be able to explain them to funders.
• Ongoing Budget-to-Actual Monitoring: Monthly or at least quarterly budget-to-actual monitoring, involving both finance and program personnel to identify and address changes quickly.
• Program Staff Involvement in Budgeting: Engaging program staff early in the budget process fosters greater accountability for spending and leads to a stronger, more realistic budget.

Anyone in contact with funders should understand how funds are being spent, even if that means doing a budget modification.

2. Are Our Internal Controls Real, or Just on Paper?

Beyond having policies and procedures documented, nonprofits need to verify their internal controls are working in practice, not just existing on paper, to prevent mistakes and ensure accountability.

Most organizations have policies and procedures written down somewhere, but the real question is: “Are those documents accurate and are staff following them?”

• Comprehensive Documentation: Documented policies and procedures manuals that are readily accessible and understood by all staff.
• Regular Updates: To policies and procedures manuals to comply with new general accounting principles and changes in uniform guidance.
• Spot Checks/Mini Audits: Conducting regular, informal spot checks or mini audits of financial transactions helps identify and address issues before a formal audit.
• Reviewing Past Mistakes: Analyzing previous audit reports or funder findings, as well as insights from mini audits, helps identify root causes of errors (e.g., staff training, software issues) and prevent recurrence.

“Spot checks are an opportunity, not a failure. It’s a chance for us to find out if there’s something that we missed, if a process is not being followed, someone’s not trained and it can be a really useful tool.”

3. How Quickly Can We Produce Documentation Requests?

Funder fire-drills are becoming the norm. Nonprofits need systematic organization and regular retrieval system testing to quickly locate and provide documentation upon request.

• Centralized Documentation: Establishing a centralized, easily accessible system for electronic documentation, including clear filing and naming conventions..
• “Funder Ready” Folder: Containing approved budgets, signed contracts, audited financials, and registration/renewal documents.
• Testing Response Time (Fire Drills): Simulate a funder request and give the team a limited timeframe (e.g., 24 hours) to gather and respond to the mock request. Debrief afterwards to identify obstacles and areas for improvement.
• Real-Time Updates: Calendar regular times to refresh and update materials (e.g., liability insurance certificates, board lists) to avoid sending outdated information.
• Nine-Month Audit Review Process: To proactively assess readiness for the annual audit cycle and create a culture of continuous preparedness.

“Have SOPs, even around how to store things electronically. At BTQ we have a very clear way of how we’re filing things and naming conventions, so if a new staff member comes on they’re easily able to find something.”

4. Are We Ready for Informal or Discretionary Oversight?

A single unexpected email can make or break trust. How quickly and clearly you respond can either build confidence or raise concerns.

Beyond formal audits, organizations should prepare for unexpected requests, informal inquiries, and discretionary oversight that may come without advance notice.

• Strong Funder Relationships: Building close, consistent relationships with funders, including program officers and higher-level agency contacts, helps foster trust and anticipate upcoming needs.
• Networking with Other Nonprofits: That share the same funders can provide valuable insights, advice, and contact information.
• Leveraging Technology and Automation: To significantly reduce the time required to generate reports and respond to ad hoc requests, building funder confidence and freeing up staff for program activities.

“Building close consistent relationships, strong relationships with funders is very key. Sometimes that’s difficult… but when you can find that one person…having a good contact at a funder’s office is so helpful.”

Staying Current: Resources and Best Practices

The BTQ team shares tips and tools to keep up with regulatory changes and shifting federal priorities.

Technology

• Grant-tracking and accounting systems that mesh (ledger ↔ grant)
• Automation for GL detail exports and payroll allocations

Regulatory Intelligence

• Grants.gov email alerts for Uniform Guidance updates
• National Council of Nonprofits policy bulletins
• Ask each funder about their own list-serves or portals

Best Practices

• Directly contact funders to understand their communication preferences
• Utilize resources like the National Council of Nonprofits
• Stay updated on uniform guidance requirements
• Monitor federal websites and regulatory updates
• Establish regular check-ins with program officers

Preparation Beats Perfection

Greater scrutiny is coming, but nonprofits that tighten data quality, field-test controls, centralize documents, and cultivate funder relationships can answer tough questions with clarity and confidence.

“Being ready isn’t about catching mistakes. It’s about building structure so your mission keeps moving when oversight ramps up.”

BTQ Financial has spent over two decades refining the very practices nonprofits need to withstand rigorous oversight.

Here’s what partnering with BTQ delivers:

1. A 200-person bench of specialists: Directors, controllers, grant-optimization experts, and CFO-level strategists who act as an extension of your team.
2. Compliance and reporting: Generate detailed financial and compliance reports, maintain audit trails, and ensure adherence to regulations and donor requirements.
3. Financial analysis and planning: Monitor budgets, forecast future expenses, and conduct variance analysis to stay on top of your financial health.
4. Funder submission and processing: Automated approval workflows and integration with your financial systems.
5. Expense management and allocation: Track and allocate expenses to specific grants and contracts with precision, ensuring funds are used according to donor requirements.

Schedule an assessment with BTQ today to start building a resilient and transparent finance function.

Nonprofits shoulder mission-critical work while wrestling with lean budgets, grant restrictions, funding uncertainty, and escalating compliance demands. 

Many have discovered that cloud-based accounting software for nonprofits delivers a secure, near real-time view of finances without the high capital cost of on-prem systems. 

Yet technology alone won’t guarantee faster closes or sharper insight; it must be paired with modern processes and finance professionals who know how to unlock every ounce of value from an upgraded platform.

Learn more about the key features, benefits, and how to unlock the full value of cloud-based accounting software in the eBook below:

1. Cost Efficiency

Shared, enterprise-grade infrastructure and around-the-clock monitoring lower total cost of ownership.

2. Enhanced Security 

Dedicated cybersecurity teams safeguard donor and program data, satisfying watchdogs and regulators.

3. Remote Access & Flexibility

Staff, volunteers, and board members can collaborate from anywhere with role-based permissions and without clunky VPNs.

4. Always Current 

Automatic upgrades roll out new features and compliance updates. No more disruptive version jumps.

5. Integration Compatibility 

Open APIs connect donor CRMs, fundraising apps, and program tools to eliminate duplicate entry.

Cloud Technology Is the Start of the Journey

New cloud-based accounting platforms promise near real-time data, iron-clad security, and easier compliance. Yet many nonprofit leaders discover that turning on new software doesn’t translate into faster closes or more strategic insight.

Technology layered on top of yesterday’s processes, operated by over-extended or under-trained staff, will reproduce the same bottlenecks it was meant to eliminate.

Where Stand-Alone Platforms Fall Short

Upgrading your software without having the right people and processes won’t address the root challenges of nonprofit finance.

• Manual work just moves screens. If approvals, allocations, or grant tracking still require offline spreadsheets, the team is still in the weeds.
  
• Data silos persist. Without thoughtful integration, donor CRMs, payroll, and budget tools remain disconnected islands.
  
• Staff turnover erases hard-won know-how. New hires inherit a maze of half-configured modules and ad-hoc reports.
  
• Compliance risk lingers. System controls are only as strong as the workflows that enforce them.

Pair the Platform with a Full-Service Finance Team

BTQ Financial’s Finance as a Service (FaaS) model wraps best-in-class cloud software with the people and processes required to unlock its full value:

• Seasoned nonprofit accountants & controllers who enter day one knowing fund, grant, and multi-entity rules.
  
• Pre-built, audit-ready workflows for bill approvals, restricted-fund releases, and revenue recognition.
  
• Continuous process improvement driven by a dedicated transformation team so the system evolves with your mission.
  
• 30–90-day go-live window that delivers a fully staffed, fully optimized back office faster than most organizations can recruit a single senior hire.

Results You Can Expect from BTQ’s FaaS

1. Leadership time reclaimed. More hours freed for program strategy instead of spreadsheet triage as BTQ’s experts manage the back-office and install proven systems.
   
2. Reporting that meets the moment. Board-ready dashboards within days, not weeks.
   
3. Cost savings on people and platforms. Access fractional expertise and best-in-class tech for a fraction of the cost of hiring and building in-house.
   
4. Resilience against staff turnover. Say “good-bye” to hiring and turnover challenges as BTQ’s bench of highly qualified professionals, seasoned in nonprofit finance, keeps the books on track even when internal roles change.
   
5. A finance function that scales. Multi-entity consolidation and grant compliance are handled strategically as you grow.

Proof in Practice: How A Youth-Services Nonprofit Re-channeled $1M to Its Mission

After separating from its parent organization, The Door needed to rebuild its finance function from scratch. With BTQ’s unified tech stack and outsourced team, the nonprofit:

• Saved over $1 million in 30 months, which was redeployed to fund new programs.
  
• Moved from reactive bookkeeping to proactive cost monitoring.
  
• Earned cleaner audits and gained the confidence to scale services city-wide.

Transform with Process, People, Then Platform

Building a state-of-the-art system is powerful, provided it rests on modern workflows and is run by experts who know how to leverage every feature. BTQ Financial delivers all three in one engagement. 

If your organization is considering a move to the cloud, talk with BTQ first to ensure the technology becomes a catalyst for impact, not just another line item in the budget.

Girls Who Code is an international nonprofit committed to closing the gender gap in technology. 

Feargus Legett, Chief Financial Officer of Girls Who Code, and Rosie Keegel-Idigbe, Grants and Contracts Manager, discuss the organization’s strategic partnership with BTQ Financial, a division of Consero Global, and how leveraging BTQ Financial’s expertise has allowed Girls Who Code to focus on its core mission.

Nonprofit Challenges

Nonprofits operate with limited budgets, directing most resources toward programming rather than overhead functions such as finance and accounting.

Other key challenges include:

• Budgetary constraints
• Attracting and retaining quality financial staffing
• Managing complex grants and government contracts

“Nonprofits have lean budgets… resources are constrained for things like finance and accounting that are part of overhead. From a financial management perspective, that presents a real challenge,” says Feargus.

Why Girls Who Code Chose BTQ Financial as a Finance & Accounting Partner

Girls Who Code’s partnership with BTQ Financial, now over three years strong, has provided expertise, technology, and scalable services tailored to their needs.

• Access to high-level financial talent
• Technology platforms enabling effective sharing of financial information across stakeholders
• Scalability of financial operations aligned with organizational growth and needs

“Our partnership with BTQ Financial has really allowed us to tap into talent. We’ve also been able to access technology and a platform that allows the sharing of financial information across the organization to all stakeholders,” noted Leggett.

Key to Success: Effective Communication

Leggett and Keegel-Idigbe emphasized the importance Girls Who Code and BTQ Financial place on effective, ongoing communication to ensure a successful partnership.

• Continuous engagement through Zoom, Slack, and weekly meetings
• Seamless integration, making BTQ Financial feel like part of GWC’s internal team
• Dedicated internal liaison managing the engagement

“I’ve been really impressed with how seamless the communication has been. We’re constantly on Zoom calls.”

“We slack each other all the time… and I found just that constant flow of communication to be really effective for our collaboration,” says Keegel-Idigbe.

Enhancing Decision-Making Through Data

Outsourcing financial functions to BTQ Financial has notably improved GWC’s decision-making capabilities through access to accurate and timely financial data.

• Availability of crucial metrics such as cost per student, overhead rates, and actual program costs
• Better budget stewardship thanks to transparent, up‑to‑date numbers

“BTQ’s Finance as a Service has really helped Girls Who Code enhance its decision-making through accurate data and timely data,” said Feargus.

Additional Tips for Successful Outsourcing

When outsourcing a critical function like finance & accounting, Legett advises that organizations don’t necessarily need extensive finance expertise, but they do require operational insight and internal advocacy.

• An operations-minded internal champion who deeply understands the organization’s operations, goals, and staff
• Ability to provide outsourced teams with necessary organizational context for successful integration and collaboration

“You don’t need to be a CFO… what you need to be is an operations-minded person that really knows the organization inside out,” offered Legett.

Why consider BTQ 

Girls Who Code’s three‑year partnership with BTQ Financial shows the power of outsourcing finance for mission‑driven organizations. 

“(BTQ) established relationships with key stakeholders here and they feel a lot like part of the organization as opposed to an external vendor,” said Legett.

BTQ was founded to serve nonprofits exclusively with grant compliance, donor transparency, and program‑centric reporting.

• Mission alignment: BTQ measures success by the social impact its clients deliver, not by billable hours.
• Nonprofit‑specific tool kit: Workflows, dashboards, and controls are pre‑configured for restricted funds, federal grants, and board‑level reporting.
• True partnership model: Dedicated teams embed with staff, speak the language of programs, and flex capacity up or down with the funding cycle.
• Freedom to focus: With back‑office complexity handled, executives can redirect time and dollars toward advancing core programs and advocacy.

Take the next step: If your nonprofit is juggling multiple grants, stretched finance staff, or delayed data, schedule a discovery call with BTQ Financial. A brief conversation could reveal how a mission‑driven finance partner can help you amplify impact.

Nonprofit organizations are facing a rapidly evolving environment where funding uncertainties, increased service demands, and staffing challenges intersect. 

In light of these trends, BTQ Financial surveyed over 100 nonprofit leaders on the top finance challenges they face, and the strategies that can help address them.

BTQ’s Andrew S. Perumal, Partner and Director of Client Operations, and Sisil John, Senior VP of Finance, sat down to discuss the survey’s findings and highlight how BTQ is working with nonprofits to address and reduce those challenges.

Survey Scope

Nonprofit leaders including CEOs, executive directors, founders, and COOs contributed their insights on critical financial challenges. Annual budgets represented in the survey ranged from $3 million to $200 million.

The survey captured feedback from a diverse range of nonprofits, from small community-based organizations to large national providers.

Despite organizational differences, leaders reported a common set of financial management issues.

The Nonprofit Landscape

Today’s nonprofits navigate a “perfect storm” of rising service demands, funding complexities, and political uncertainties. 

For many, maintaining financial health is a balancing act of mission delivery and risk management.

Key Statistics

• Essential Services: 83% of Americans consider nonprofit services—such as social services, education, and housing—to be essential.
  
• Financial Risk: Between 60%–80% of nonprofits could face serious financial danger if federal grants are disrupted.
  
• Policy & Funding Concerns: 70% of nonprofit leaders worry that the current political climate will negatively affect their organizations.

It’s clear these programs aren’t just “nice-to-have”,  they serve an essential role in their communities. However, the hard truth is that a majority of nonprofits could find themselves at serious financial risk.

Major Financial Management Challenges

Six critical themes emerged from the survey regarding the top financial management hurdles:

1. Financial Sustainability & Risk Management: Leaders need better tools and bandwidth to proactively plan.
   
2. Accurate & Timely Financial Reporting: Multiple funding sources and reporting requirements cause complexity.
   
3. Audit Readiness & Regulatory Compliance: Ongoing prep is needed year-round, not just during audit season.
   
4. Scaling Finance as Organizations Grow: Systems and processes often fail to keep up with rapid changes.
   
5. Consistent Financial Processes: High staff turnover or remote setups can lead to inconsistent record-keeping.
   
6. Low Operating Reserves: Many nonprofits run with limited or nonexistent reserves, leaving no margin for error.

“Many leaders are actively trying to assess their financial sustainability and manage risk, but often without the tools or bandwidth to do it in a proactive way,” observed Perumal.

Hiring and Turnover in Finance

High turnover in finance roles disrupts operations, causing knowledge loss and delays. According to the survey, only 28% of respondents reported that turnover in the finance function was “rare,” whereas the majority deal with frequent or occasional staffing gaps.

Key Takeaways

• Frequent Turnover: 72% of organizations noted occasional, frequent, or very frequent staff turnover in finance roles.
  
• Continuity Gaps: Finance staff turnover can lead to inconsistent reporting processes and institutional knowledge loss.
  
• Leadership Strain: Executive directors and CEOs often step in to fill finance roles during vacancies, detracting from strategic tasks.
  
• Compliance Risks: Delays in audit preparation and compliance efforts become more likely when teams are short-staffed.

Systemic Issues in Nonprofit Finance

While turnover is a major concern, the survey data reveals deeper underlying challenges, ranging from lengthy monthly closes to frequent budget reforecasts, that suggest process or infrastructure gaps.

“It’s not just a hiring challenge… these challenges reflect something more foundational—nonprofits need more scalable, strategic finance operations.”

Key Findings

1. Longer Month-End Closings: An average of 19 days to close the books, with some organizations taking 30+ days.
   
2. Frequent Cash Flow Problems: 74% of leaders experience cash flow issues, underscoring the need for stronger financial planning.
   
3. Budget Reforecasts: Over half of organizations reforecast frequently, highlighting the difficulty in maintaining stable financial projections.

“An average of 19 days to close the books isn’t just a staffing lag—it’s a sign that processes and systems may not be fully optimized or resilient.”

Outsourcing Finance: A Growing Solution

Although 100% of surveyed nonprofits outsource at least one function (e.g., IT, legal), only 30% currently outsource finance – despite the many benefits a specialized finance partner can provide.

Outsourced Finance Benefits

• Strategic Expertise: Access to professionals skilled in FP&A, grants management, and compliance.
  
• Reduced Burden on Leadership: Leaders can refocus on mission-driven activities.
  
• Systems Optimization: Finance partners often streamline or provide their own financial tools and technologies.
  
• Scalability: Partners can help organizations effectively manage growth or navigate sudden funding cuts.

“Working with a strategic finance partner, if it’s done right, delivers the structure, visibility, and capacity nonprofits need… without burning out their teams.”

Top Reasons Nonprofits Use Finance Partners

Among the organizations currently working with a third-party finance partner, the survey responses highlighted the most common motivations:

1. Leadership Focus: More time for executives to handle mission-driven work.
   
2. Streamlined Processes: Partners help establish consistent, effective accounting workflows.
   
3. Timely & Accurate Reporting: Critical for compliance, audit prep, and strategic decision-making.
   
4. Specialized Expertise: Access to experts in grants, audits, revenue recognition, and more.
   
5. Cost Savings: Outsourcing can reduce overall finance function expenses (including systems and staffing).

“One of the biggest reasons is more time for leadership to focus on mission-driven activities… It’s really not just about the numbers.”

BTQ’s Finance as a Service (FaaS) Model

BTQ specializes in providing comprehensive Finance as a Service (FaaS) tailored for nonprofits. 

The comprehensive approach extends beyond typical accounting support, providing strategic insights and continuous operational improvement.

Their support spans from day-to-day transactions and reporting to strategic analysis, grants management, and even medical billing.

• Customizable Support Models: Full-service finance or stand-alone options
  
• Core Service Areas: Day-to-day accounting and transaction support, strategic CFO-level guidance, grants and contracts management, and medical billing (revenue cycle management).
  
• Long-Term Partnerships: 86% of BTQ clients have been with the firm for 5 years or more.
  
• Proactive Finance: Emphasizes forward-looking strategy and risk mitigation.
  
• Scalable Solutions: Clients range from $1 million to $200 million in annual budgets.

As Perumal says, “BTQ’s motto is: it’s your mission to create a better world, and ours is to help.”

Key Takeaways for Nonprofit Leaders

Nonprofits must address systemic challenges, both operational and staffing-related, to remain resilient. 

Reflecting on the broader themes, these core insights capture the essence of the challenges and opportunities identified:

1. More Than a Hiring Issue: Financial struggles often point to deeper process and infrastructure gaps that require a strategic solution.
   
2. Partnerships Provide Stability: A trusted finance partner can bring stability, expertise, and structure, freeing leadership to focus on mission.
   
3. Readiness for Growth or Change: Building scalable processes ensures nonprofits are prepared for funding fluctuations and expansion.
   
4. Added Value of Specialized Teams: Fractional CFOs and dedicated finance experts can bolster compliance, audits, and strategic planning.
   
5. Underused Outsourcing: Despite outsourcing in IT or legal, many nonprofits still overlook finance outsourcing—even though it can significantly boost organizational capacity.

“Now more than ever, nonprofits really need a strong financial and accounting partner in their corner… people that understand the landscape and can help build flexibility and planning.”

When Should You Consider Bringing in a Finance Partner?

For nonprofits unsure about outsourcing and the ideal timing for bringing in a finance partner, many of BTQ’s clients “come to us at a critical inflection point—when they experience issues with cash flow, internal crises, or leadership changes.”

If your organization struggles with timely closes, ever-changing compliance rules, or staff turnover, consider exploring a finance partnership with BTQ. 

We have tailored and scalable solutions to help strengthen operational efficiency and mitigate risk, so you can focus on what truly matters: advancing the mission and serving your communities.

We recently outlined steps nonprofits can take to manage federal funding delays and uncertainty. Now, a related, and potentially longer-term,  trend is emerging: increased attention on how nonprofits manage and report on public funds.

While some of this scrutiny is already underway, much of it may evolve over the coming year as agencies adjust to new priorities, legal rulings, and policy directives. 

For nonprofits managing federal grants and contracts, it’s an ideal time to ensure that financial systems, compliance practices, and documentation workflows are ready for a new level of visibility.

What Could Be Driving the Next Wave of Scrutiny?

1. Federal Agencies May Re-Evaluate Funding Oversight

• Executive actions and shifting policy priorities suggest that agencies may increasingly assess how public funds are awarded and monitored. This could lead to closer alignment between spending and national policy goals, with nonprofits expected to document not just compliance, but impact.

2. The Single Audit Threshold Is Increasing — But Oversight May Shift

• With the Single Audit threshold rising from $750K to $1M (for fiscal years beginning October 1, 2024), smaller grantees and contractors may fall outside formal audit requirements. However, this could shift oversight to more discretionary or targeted reviews, including desk audits, site visits, or document requests from funding agencies or pass-through entities.

3. Pass-Through Entities May Increase Subrecipient Monitoring

• State and local governments (often acting as pass-through entities) are under pressure to demonstrate compliance with federal funding requirements. 
• Nonprofits serving as subrecipients on grants or contracts may experience increased monitoring, even in the absence of federal mandates.

4. Maintain Strong Compliance & Communication Practices

• Stay in close contact with program officers at federal and state agencies to track policy changes and funding updates.
• Review subrecipient agreements to ensure compliance with reporting and financial oversight requirements.

Questions Nonprofits Should Be Asking Themselves

1. Do we have the financial clarity to answer questions from funders quickly and accurately?

• Are our general ledger and reporting systems set up to clearly distinguish between federal and non-federal funds across both grants and contracts?
• Can we track allowable costs, indirect rates, personnel allocations, and match requirements at the project or funder level?

2. Are our internal controls not only documented, but actually working as intended?

• Do we have clear approval workflows for disbursements, procurements, and contract billing?
• Are we confident that our processes for time allocations, subawards, and cost allocation are being consistently followed and tracked appropriately?

3. If a funder or auditor asks for documentation today, are we ready?

• Is our backup documentation for drawdowns, invoices, and cost justifications organized, up-to-date, and easily retrievable?
• Have we conducted any internal reviews or walk-throughs to test our preparedness?

4. Are we prepared for more informal or discretionary oversight?

• Even if we’re under the new Single Audit threshold, are we ready to respond to funder inquiries, reconciliations, or desk reviews?
• Do we understand the unique compliance expectations tied to each grant or contract – especially those with newer or more politically visible funding streams?

Looking Ahead

Increased scrutiny, whether formal or informal, is becoming part of the new normal for nonprofits managing federal funds. 

Those with disciplined systems, real-time visibility, and clear documentation will be well-positioned to navigate reviews and maintain funding with confidence.

How BTQ Financial Can Support You

BTQ Financial delivers finance, grants, and contracts management services through an integrated model that combines strategic oversight with cost-effective processing. 

We help nonprofits:

• Maintain funder-aligned GL structures for grants and contracts
• Track expenditures and compliance
• Organize documentation for rapid response to funder inquiries
• Prepare for audits, desk reviews, or increased subrecipient monitoring

As scrutiny increases, your finance systems must do more than just function — they must demonstrate readiness, resilience, and reliability.

Federal funding has long been a critical revenue source for nonprofits. However, recent legal and policy shifts have introduced delays, uncertainty, and administrative challenges – particularly for organizations receiving funds through state and local pass-through grants.

While it is difficult to predict how long this uncertainty will last, proactive financial management can help nonprofits maintain stability and avoid disruptions.

With over 20 years of experience helping nonprofit organizations achieve financial excellence, BTQ Financial recommends nonprofits take the following steps to navigate federal funding uncertainty.

1. Identify Exposure to Federal and Pass-Through Funding

• Review all current and pending grants to determine whether federal funds are the ultimate source, even if received through a state or local agency.
• Confirm with funders whether any expected disbursements are at risk of delay.

2. Prioritize Cash Flow Management

• Submit outstanding drawdown requests immediately to minimize delays.
• Update cash flow forecasts regularly—consider shifting from quarterly to monthly or weekly projections.
• Develop a contingency budget outlining tiered spending reductions in case of prolonged funding delays.
• Engage your board in scenario planning discussions to prepare for different funding outcomes.

3. Expand Funding Diversification Strategies

• Reassess relationships with private funders: Engage with foundations and donors who may offer flexible funding or bridge support.
• Explore financing options: A line of credit or bridge loan can provide short-term liquidity while awaiting delayed grant reimbursements.
• Evaluate unrestricted revenue sources: Expanding earned income strategies or mission-aligned partnerships can reduce reliance on government funding.

4. Maintain Strong Compliance & Communication Practices

• Stay in close contact with program officers at federal and state agencies to track policy changes and funding updates.
• Review subrecipient agreements to ensure compliance with reporting and financial oversight requirements.

Looking Forward

Federal funding cycles are often unpredictable, but nonprofits with robust financial systems and proactive funding strategies will be better positioned to adapt. Now is the time to:

• Strengthen financial oversight through clear reporting and compliance processes.
• Ensure cash flow resilience with frequent forecasting and diversified funding streams.
• Engage with both public and private funders to create financial flexibility.

BTQ Financial has worked alongside nonprofits for over 20 years, helping organizations navigate funding uncertainty through outsourced financial and grants management, financial strategy, and compliance oversight.

By ensuring efficient financial operations, nonprofits can focus on their mission while staying financially strong. Connect with us to discuss how we can help your organization.

Additional Resources for Nonprofits

The following resources provide updates and guidance on federal funding, compliance, and financial strategy:

• National Council of Nonprofits – Executive Order Tracker
• White House Presidential Actions Website
• Federal Funds Information for States (FFIS) – Grant Funding Updates
• Grants.gov – Federal Grant Applications Tracking
• OMB Uniform Guidance (2 CFR 200) – Federal Grant Compliance

When NYC School Bus Umbrella Services (NYCSBUS) needed to transition from a private contractor to a nonprofit organization, they faced an immense challenge: maintaining service for 9,000+ students while completely rebuilding their finance function.

“BTQ came in, looked at the outcomes we needed, put boots on the ground, and got us to the finish line,” says Matt Berlin, CEO of NYCSBUS.

The Challenge

• Transitioning an $180 million fiscal department
• Ensuring uninterrupted service for students with special needs
• Establishing credibility with city auditors and public stakeholders
• Building complex system integrations with specialized fleet management software

The BTQ Solution: Finance as a Service (FaaS)

In just 30 days, our team:

1. Implemented a comprehensive suite of financial systems
2. Assumed full CFO responsibilities
3. Created transparent reporting capabilities
4. Integrated with specialized operational systems
5. Established audit-ready financial practices

The Results

With BTQ managing their financial operations, NYCSBUS was able to redirect resources toward their mission:

• Program Innovation: Beginning to electrify their bus fleet
• Service Enhancement: Integrating machine learning technology
• Operational Efficiency: Running the entire financial system with minimal in-house staff
• Stakeholder Confidence: Providing clean audits before the Comptroller’s committee
• Mission Focus: Concentrating on improving transportation services for NYC students

How BTQ Empowers Nonprofit Program Expansion

Our FaaS model creates the foundation that allows nonprofits to innovate and grow:

1. Resource Optimization

By outsourcing finance functions to BTQ, nonprofits can reallocate resources toward mission-critical programs rather than administrative overhead.

2. Financial Clarity

Our transparent reporting provides the confidence to make bold program decisions, knowing exactly where resources stand and how they can be leveraged.

3. Scalable Operations

As your organization grows, BTQ’s financial capabilities grow with you—no need to continuously invest in building an internal finance department.

4. Risk Mitigation

Our nonprofit financial expertise helps identify opportunities and avoid pitfalls, creating a stable foundation for program expansion.

5. Strategic Partnership

We serve as thought partners in your financial strategy, helping align fiscal resources with mission objectives.

Ready to Transform Your Finance Function?

Learn how BTQ Financial can help your organization build the fiscal foundation needed to expand your mission impact. Our team of nonprofit financial experts is ready to create a tailored solution for your specific needs.

“Most SaaS companies don’t care about you. BTQ gives a damn about us,” says Matt Berlin, NYCSBUS CEO.

BTQ has been empowering the most progressive nonprofit organizations since 2001 with financial management, medical billing, and accounting services that support their missions and secure sustained operations.

Contact us to learn more about how we transform your back-office function into a strategic growth engine.