Nonprofit Managers Suffer Financial Knowledge Gaps

from The Chronicle of Philanthropy:

Many Managers of Nonprofit Finances Suffer Knowledge Gaps, Study Finds

Top officials at midsize nonprofits lack basic financial knowledge, according to a study released today.

The study, conducted by the Center on Philanthropy at Indiana University, also found that midsize organizations are lifting their focus from just breaking even to long-term planning.

The study surveyed more than 500 nonprofit officials who manage the finances of their organizations, which had revenues of $1-million to $5-million. Three quarters of the managers said they consider themselves financially knowledgeable, but just 36 percent correctly answered three questions they were given to assess their basic financial skills.

Update: Today’s edition of Nonprofit Quarterly takes issue with the above story saying, “The report is regrettably issued by the Center on Philanthropy at Indiana University, which we have come to trust for its hard work on the annual Giving USA report. This particular study was supported by the Moody Foundation and, as far as we are concerned, its quality and conclusions are not only a disappointment, but pose a serious disservice to nonprofits..”

Read more in New Study of Nonprofit Financial Literacy Misses the Mark.