Nonprofits — especially YMCAs — love to celebrate a clean audit or a balanced budget. But here’s the truth: surplus on paper doesn’t keep the lights on. Cash does. If you’re not managing, forecasting, and emphasizing cash flow, you’re missing the single most important measure of financial health.
Many boards and committees look at the income statement, see a positive change in net assets, and breathe easy. But what if:
Your receivables are stacked with pledges that won’t come in for months?
Your expenses are timed poorly against when revenue actually hits?
Your deferred maintenance caused you to lose operating cash?
On paper, you’re fine. In practice, you’re sweating payroll.
Cash flow tells you whether your organization can:
Pay staff and vendors on time
Handle seasonal swings (hello, summer camp deposits vs. expenses)
Absorb a funding delay without panic
Seize opportunities when they appear
It’s the closest thing to a real-time stress test for your nonprofit.
Restricted funds: Endowments or grants that look like assets but can’t be spent freely
Capital campaigns: Large pledges secured over years but no cash today
Overemphasis on budget vs. timing: Meeting the annual plan but gasping for liquidity mid-year
Cash flow problems rarely come from one bad month. They creep up through timing mismatches and lack of visibility.
Rolling Cash Forecast – Always look 12 weeks ahead, minimum.
Separate Operating from Restricted – Don’t let phantom assets fool you.
Scenario Planning – “What if grants delay?” or “What if membership drops 10%?”
Board Education – Teach your finance committee to ask “Where is the cash?” not just “What’s the budget variance?”
A positive surplus doesn’t mean liquidity.
Cash flow forecasting is your best defense against crisis.
Treat restricted funds like they’re in another vault — because they are.
Boards should focus on cash flow as much as the P&L.
At Skeehan & Young, we help nonprofits (especially YMCAs) build cash flow discipline into their everyday financial management.
