Becoming Grant-Ready: Happy New Fiscal Year (maybe)

We’re halfway through 2024 and for many nonprofits, the start of a new year fiscal is three weeks away! In preparing for my upcoming webinar, on Saturday, June 22 (it’s an hour, it’s FREE, and you can REGISTER HERE) I thought it would be helpful to write a series on how to get a novice grant seeker and/or new grant writer “grant ready”,

When it comes to the nonprofit sector, one key aspect of getting grant-ready is financial

management. For any start-up nonprofit or anyone new to the sector, is understanding the difference between a fiscal year and a calendar year as to how you set up your budget year. Whether you're working at or volunteering for a nonprofit organization, maybe you’re designing a project, or a startup, mastering the art of fundraising and grant writing is essential for securing the resources you need. Are you prepared to apply for or write a grant proposal? Is your organization “grant-ready”?

This week’s post explains the differences between these “years” and why you, as a new

organization and/or a novice grant writer should know the difference for tracking operational

expenditures as well as program planning purposes. As a side note: please make sure that your board members know too! Start getting your business house in order!

Whatever role you play or are considering within the nonprofit world, it’s important to

remember that nonprofits are a BUSINESS. Nonprofits have fiduciary responsibilities and are

accountable to donors, funders, staff, volunteers, program participants, and the community.

Nonprofits must make their financial and operating information public record. As a

business, there are tax implications, governance, and reporting requirements to maintain its

tax-exempt status. This is ambitious work, centered around your mission in the advancement

of a social cause for the community’s benefit. This is a business!

For nonprofits, distinguishing between a calendar year and a fiscal year is more than a

technical detail—it’s a fundamental aspect of financial management, strategic planning and for grant writing. Actually, there are different types of “years” when it comes to nonprofit data collection and reporting. And for a new grant seeker, if you want to obtain grant funding, you have to show that you are a good steward of managing dollars! These timeframe differences can significantly impact how your nonprofit organization plans, reports, and applies for grants.

For nonprofits, managing finances is crucial, especially when it comes to grant funding.

Because in this work, just like in life, timing is everything...

Fiscal Year.

This is a 12-month period that an organization uses for accounting purposes but does not

necessarily start on January 1. Nonprofits may determine their own fiscal year, as long as it

starts on the first day of the month. For example, a nonprofit might use a fiscal year that runs

from July 1 to June 30, or October 1 to September 30, the latter being used widely by the

Federal government for grant making purposes.

Calendar Year.

A “calendar year” follows the traditional January 1 to December 31 timeline, like your iCal,

Outlook, or Google calendar (assuming a Gregorian calendar). This is the most straightforward way to organize a year, aligning with the common societal and tax year structure. The majority of nonprofits align their fiscal year with the calendar year.

A fiscal year (FY) is generally categorized by their year-end date. So, a nonprofit whose

fiscal year runs from January to December 2024 would record their financials for “FY 2024.”

However, a nonprofit whose fiscal year runs from July 1, 2024 - June 30, 2025, would consider

theirs as “FY 2025.” As you can probably tell, understanding the differences between a

calendar year and a fiscal year is crucial. Here's another consideration to select your

nonprofit’s fiscal year end - it may be based on programming or funding cycles. For example,

a nonprofit that specializes in summer program offerings may want their fiscal year to end in

the winter, after they’ve completed their annual summer programs; while an education

nonprofit may want their fiscal year to end in the summer—after the end of the school year.

The majority of nonprofits (64%) align their fiscal year with the calendar year. That said,

many large organizations choose June 30 th for their fiscal year end instead. Choose one that works for you, and if you find that another year end date works better, you can change it. Just make sure to let the IRS and your funders know! Remember, nonprofits are a business.

And if the fiscal year isn’t confusing enough, there’s also what’s known as the “form year”.

In nonprofit data reporting terms, “form year” refers to the specific version of the Form

990 (Return of Organization Exempt from Filing Taxes) that an organization files with the IRS

(as noted in the upper right-hand corner of the form). Form year should generally align with

the start of nonprofits’ fiscal year. As a tax-exempt organization, nonprofits must file a tax

return called a Form 990 with the IRS each year to comply with federal regulations. This form

has information on a nonprofit's finances and activities and is a public record.

Next week, you can read more on grant readiness as I explore three common situations to

help a novice grant seeker, writer or consultant to help determine a nonprofit organization’s

grant readiness - and includes an actual case study!

And don’t forget to register for the webinar! Another request, let me know your thoughts,

questions etc. about nonprofit development. Thank you to those who have dropped me a line to share your thoughts. Your words of encouragement, love, and feedback are truly

appreciated and keep me inspired! Drop me a line: info@leadlikebigmama.com

Knowledge is Power. Share This Resource with Others!

Find out what you need to get ready for soliciting grants. Also, preview my three-part course:

“Beyond Writing: Tools & Strategies for Winning Grants”

Can’t attend?? Register and get the recording and materials!

Both the webinar and the course are designed for novice grant seekers and grant writers within nonprofit organizations looking to prepare, establish, and enhance their grant programs.

Join me at my next Big Mama’s Table:

Free 1-hour webinar:

“Grant Ready: Assessing Your Nonprofit’s Fundability”

Date: Saturday, June 22 nd - 1:00 – 2:00 EST

RSVP

*Featured Grant and Career Opportunities This Week:

Weekly wisdom, in their own words:

“Equality means more than passing laws. The struggle is really won in the hearts and minds of the community, where it really counts.”

― Barbara Gittings (1932 - 2007)