Cash Clarity for Nonprofits: Your Checking Account Is Lying To You

If your nonprofit’s checking account looks “healthy,” this episode is your friendly wake-up call: bank balance is not the same as real liquidity. Carole Santilli, CPA, Manager at Your Part-Time Controller (YPTC) Philadelphia, joins us to help leaders, board members, and development teams stop guessing and start managing cash with clarity.

Carole lays out why the bank statement can be “the worst place to look” when assessing what you truly have available to spend. The heart of the conversation is the difference between true operating cash and restricted or conditional funds—money that may be sitting in your account but is already spoken for by purpose, timing, or requirements (like matching). A scholarship grant, a multi-year commitment, or a conditional advance can create the illusion of being flush, even when operations are tight.

From there, the discussion turns practical: separate accounts for restricted funds, monthly reporting that keeps everyone honest, and board-level transparency that supports smarter decisions and stronger trust with funders. Carole also reinforces a widely used benchmark for stability: nonprofits should aim for three to six months of operating cash on hand—but only after restricted dollars are set aside.

Forecasting takes center stage as the real “business muscle” here. Budgets are approved and static, but reality shifts: events move, grants arrive late, reimbursements lag, expenses climb with inflation, and unexpected costs (like snow removal or insurance increases) show up fast. Carole’s message is consistent: forecast monthly, watch variances, and adjust early—before panic becomes policy.

And for boards? She makes it plain: financial oversight isn’t a passive role. Ask the “annoying” questions, understand obligations, and engage early in meetings while energy is high. As Carole puts it, “You can’t support the mission if you don’t have the funding and the resources.” She also reframes audits as a credibility asset: “Look at this as another tool in your toolbox” to reassure funders that your organization is well-run.

This episode is a strong reminder that calm, disciplined financial practices protect mission momentum—especially when life throws curveballs.

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