#409 - The 5 Financial Red Flags Fundraisers Miss

<p>I came into this conversation thinking I knew how to raise money. Turns out, I&#39;ve been fundraising with a broken financial house and didn&#39;t notice until Susan DeMarco walked me through it.</p><p><br></p><p><a href="https://www.linkedin.com/in/susan-de-marco-mba-cpa-349399206/ "><u>Susan DeMarco</u></a> is the CEO of <a href="https://www.brandkpartners.com/" target="_blank" rel="noopener noreferer">Brand K Partners</a>, an accounting firm that works exclusively with small to mid-size nonprofits. She provides everything from basic bookkeeping to fractional CFO services. She&#39;s spent years watching nonprofits celebrate a major gift, then panic when they can&#39;t manage the financial complexity that comes with it.</p><p><br></p><p>In this episode, Susan names the five financial red flags that tank nonprofits, and it&#39;s not what you think. Growth without financial infrastructure is the first. Then revenue recognition confusion, fundraisers celebrate the commitment, finance knows it&#39;s not recognizable yet. Cash flow is the killer nobody talks about: you can have a $500,000 grant and still run out of money in month three if only 20% arrives upfront. Weak financial controls mean one person is handling deposits and reconciliation, which is a risk nightmare. And the biggest one: finance and development working completely independently, speaking different languages about the same money.</p><p><br></p><p>Susan&#39;s advice cuts straight through. If you&#39;re hiring a CFO or finance director, nonprofit experience matters. For-profit accountants don&#39;t understand restricted funding the way a nonprofit accountant does. Every grant letter is different, and if your finance person doesn&#39;t know that, you&#39;re in trouble. Before you celebrate a major gift, ask your finance team: Can we actually manage this? Do we have the infrastructure? If not, the money arrives and your books break.</p><p><br></p><p>The real kicker is this: fundraising success doesn&#39;t automatically equal financial health. It can feel like a win and a crisis at the same time. Susan walks you through what to watch for and the exact moment it&#39;s time to bring in outside help instead of hoping your one overworked bookkeeper figures it out.</p><p><br></p><p>If your ED and your finance person don&#39;t talk, or if you&#39;re not sure what &quot;revenue recognition&quot; means, this conversation is for you.</p><p><br></p><p><strong>Important Links:</strong><a href="https://ww