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Financial management for NGOs Key concepts and jargon Advance thinking for Mango training

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Presentation on theme: "Financial management for NGOs Key concepts and jargon Advance thinking for Mango training"— Presentation transcript:

1 Financial management for NGOs Key concepts and jargon Advance thinking for Mango training

2 So what is financial management ?

3 Take a moment to write down 3 or 4 thoughts on what financial management involves before moving to the next slide... Click when ready

4 Financial management entails: our financial resources

5 One way to think about financial management to an organisation is like maintenance is to a car..... we need to put in good quality fuel and give it a regular service so that it will run efficiently.

6 But if we neglect it, the car will break down and will not reach its intended destination.

7 Financial control is at the heart of financial management...

8 Financial control means that... Money is used properly Assets are kept safe Staff are protected Managers can sleep soundly!

9 Review  This a simple project management cycle... See if you can write down the equivalent of each stage in financial terms. Click when ready

10 Review Receive & spend project funds Set the budgets Monitor the budget Build in learning and take action The financial planning cycle

11 Why is financial management important in our work?  What do you think? The next slides share ten good reasons  How many can you get? Click when ready

12 To be accountable to the people who give us money To be accountable to the communities we work with To minimise fraud, theft and abuse of resources To provide financial reports for regulatory bodies To plan for the future and become more financially secure

13 To enable staff to make better decisions on the use of funds To achieve the objectives of the organisation To get best value for our money To enhance the credibility of the organisation To strengthen fundraising efforts

14 A key feature of financial management is managing risk Two types of risk: Internal – from within, which we can do something about External – from outside so beyond our direct control

15  Financial risks pose a threat to our financial resources. Write down one internal and one external risk facing your organisation... Click when ready

16 Typical risks for NGOs : Internal – theft, fraud, fire, accidental damage... External – exchange rate loss, donors withdrawing funds, inflation...

17 The key to good practice in financial management? Robust systems!

18 Accounting records Books of account – ie the summary records Supporting documents – ie the paperwork

19 There are four building blocks in a strong financial management system...

20 Financial planning Budgets for operations Financing strategies for long term planning

21 Financial monitoring Financial statements for external accountability Budget monitoring reports for internal review

22 Internal control Policies & procedures Checks & balances

23  When all the building blocks are set up and working effectively, we achieve financial control. Financial control

24 Find out more about Mango and free resources for NGOs

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