Financial Management Basics for NGOs

1. Introduction

Financial management is crucial for the success of any organization, be it private, government or non-government. Successful enterprises watch their finances very closely and therefore take the right decisions at the right time, ultimately leading to success. Most businesses have a well structured finance department responsible for looking after the accounts and finances of the company. On the other hand, NGOs most often do not consider financial management to be a priority and lack adequate financial knowledge.  This is often characterized by poor financial planning and adequate financial systems in place.

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Very often NGOs work effortlessly towards implementing projects that cater to the need of deprived people and in this process do not pay enough attention to financial control. This practice makes the NGOs vulnerable to financial losses. In the absence of proper backup plans and funds, NGOs are unable to cope with funding crisis.


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NGOs should realize that managing their finances is of critical importance and they should incorporate necessary measures towards risk management, resource mobilization and budgeting. It is the responsibility of NGO leaders to plan their expenditures and investments and manage funds in a way that leads to a sustainable enterprise.

The purpose of this guide is to introduce NGOs to basic financial procedures and systems that are required for efficient functioning of an NGO.  By implementing the procedures and systems mentioned in the guide you will be able to manage your finances and accounts more competently.

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