Weโre thrilled to welcome Karen Houghton to the Virtuous blog! As the CEO of Infinite Giving, Karen helps nonprofits achieve financial sustainability through smart cash management, curated investments, and streamlined asset donations. Read on as she offers five essentials for nonprofit financial success in 2025.
Youโre not alone if youโre feeling the financial pressure as we look ahead to 2025. As the founder of a nonprofit, member of various boards, and CEO of Infinite Giving, Iโve seen the challenges firsthand with increasing costs, retaining our best fundraisers, inflationโyou name it.
As a registered investment advisor, while we are cautiously optimistic about the current macroeconomic conditions, our goals are to help your organization become more sustainable long-term.
The toughest part is that the traditional fundraising models that drive nonprofits were designed for a world that no longer exists.
Like our friends at Virtuous, weโre also proponents of responsive fundraising. To survive and thrive, having the right partners to help you create a financial plan for managing your resources is essential.
Now is the time to learn more about new cash management options and develop easy ways for your donors to contribute major gifts.
From data to practical tips, letโs walk through five essential strategies for nonprofit financial success in 2025 and beyond.
1. Implement Intentional Cash Management Strategies
A study by The Nonprofit Times found that 38% of nonprofits reported expenses related to managing investments, such as paying for investment advising services. This indicates that over a third of nonprofits have brokerage accounts and are actively stewarding their funds.
However, this also means that more than 60% of nonprofits are not proactively managing their cash reserve funds, potentially limiting their growth and community impact. If your organization is part of the majority thatโs not currently investing, you have a significant opportunity to build a robust portfolio (or find a nonprofit Advisor who can help) with low-risk, highly liquid strategies like treasury bills, mutual funds, and money market accounts.
Spoiler alert! Banks arenโt always offering nonprofits the best rates. Traditional financial institutions werenโt designed to serve nonprofits, and they typically donโt serve small to mid-size nonprofits well at all.
This is why Infinite Giving was founded: to help set up nonprofits for financial success using the cash management and investment strategies previously only available through banks.
If youโre not familiar with the term, cash management for nonprofit organizations refers to all the strategies you use to manage cash flow, responsibly handle donation revenue, and be a better steward of your reserve funds.
For the purposes of nonprofit cash management, the term โcashโ includes your organizationโs:
- Operational reserves
- Project-related and capital reserves
- Non-cash assets like stocks and endowments
- Multi-year grants youโve been awarded
- Scholarship funds
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Ideally, you want all of these assets to be highly liquid so you can access them quickly when you need them. You also donโt need them spread out in too many bank accounts, which adds unnecessary administrative tasks, bringing us to our next point.
2. Launch and/or Grow Your Reserve Fund for Nonprofit Financial Success
One of the biggest lessons the industry learned in 2020 when the pandemic hit was the importance of having a nonprofit reserve fund. This rainy-day fund is your organizationโs version of a savings account. A reserve fund ensures you can survive any unexpected challenges and maintain financial stability.
It’s now easier than ever to responsibly invest your nonprofitโs reserve funds and manage them effectively. At Infinite Giving, we advise our nonprofit clients to have 6 to 12 months of operating expenses in their cash reserves. This cushion provides a safety net, allowing your nonprofit to sustain itself during crises such as a pandemic or recession.
If your organization hasnโt yet established a reserve fund, make it a top priority for this new year. And if youโre fortunate enough to have that cash in a savings account already, there are even more options readily available to help your reserve fund grow, plus offer the ability to quickly liquidate those assets if needed. Cash reserves should be streamlined and working FOR you.
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3. Diversify Your Donations to Accept Stocks, Cryptocurrency, and Non-Traditional Donations
Did you know 90% of wealth in the U.S. is held in assets other than cash, including stocks, bonds, and real estate holdings? For high-capacity giving, that means itโs an untapped resource.
Accepting non-traditional donations such as stocks and cryptocurrency is one of the easiest ways to help pave the way for financial success, yet most non-profits are only asking for cash.
Plus, statistics show that accepting non-traditional donations can increase your fundraising contributions by more than 60%.
The data also shows that gift sizes are much larger in assets vs. cash. The average online gift sizes are:
- Cash = $128
- Stock = $8,000
- Crypto = $10,000
When youโre thinking about what it takes to get that amount from cash, it would take 62 donors contributing $128 compared to a single stock donation at the average size of $8,000.
So, if youโre not asking for asset gifts as part of high-capacity giving, youโre missing out. The good news is that if youโre reading this blog post, chances are youโre savvy enough to already have your online donation page set up on your website, especially if youโre using Virtuous.
With Virtuous, youโre able to understand wealth data, identify potential high-capacity donors, and launch personalized, automated campaigns. Then using Infinite Giving for your brokerage account, once that major gift is received, we can help liquidate your funds and handle receipts while Virtuous integrates them back into your reporting.
But can your organization accept other forms of major gifts besides cash? What if a donor called to give a stock today? Would you be able to receive it? And if so, how easy is it for the donor and your team to manage the process? This brings us to the next essential point.
4. Open a Brokerage Account and Create Infrastructure to Easily Receive Major Gifts
This is one of the most commonly asked questions we get: โCan you help our nonprofit open a brokerage account?โ The answer is yes! With Infinite Giving, we’ve made it easier than having to go through a bank or other traditional financial institution to open one. The traditional process of opening a brokerage account can take up to 12 weeks, whereas with Infinite Giving we have a quick, 30-minute onboarding session and then can get your brokerage account open in just three (3!) business days.
If youโre unfamiliar with this term, a nonprofit brokerage account is an investment account that an organization can use to invest funds, receive stock donations, and grow its reserve funds. Instead of only holding cash like a regular bank account, brokerage accounts can hold stocks, bonds, and mutual funds in addition to cash. These accounts are managed by an investment advisor that handles the logistics of trading and processing stocks for you.
For those readers who already have a brokerage account, are you being notified when that stock gift arrives? Many traditional financial institutions donโt have that capability, and they also donโt provide you with a dedicated advisor who can guide you on how to sell the stock, transfer funds, create the receipts, etc.
Our core belief at Infinite Giving is that every nonprofit should have a brokerage account.
And unlike a traditional bank, we can get your account set up quickly without any paper or wet ink signatures. Plus we donโt charge any brokerage fees or minimums on donations (some banks require a $5M minimum!) and make it easy for you to quickly liquidate assets to cash. While some fundraising software providers charge high transaction fees, we donโt. This is just another part of our commitment to building more sustainable nonprofits and encouraging more high capacity giving.
For stocks, this can be an incredible fundraising incentive for your donors because when selling stocks, individuals usually have to pay 37% tax on the appreciated value of their shares. But if they donate those stocks directly to a nonprofit, they not only donโt pay taxes but also receive a tax deduction.
And for crypto, thereโs even more donor appeal because of the appreciation of crypto values, especially now that Bitcoin has exceeded $100,000. This allows donors to give more, coupled with tax incentives such as deductions and potential exemption from capital gains tax,
5. Leverage Technology to Streamline Your Operations for Nonprofit Financial Success
The good news is that there are more solutions than ever for your nonprofit to get on the path to growing your giving. The goal is to work smarter, not harder. Partnering with Infinite Giving and Virtuous provides the most streamlined and affordable way to bring everything into one place within a fiduciary partnership.
If youโre using Virtuous to drive donations through campaigns, then managing (plus growing) funds with Infinite Giving, we can provide your nonprofit through strategic and thoughtful stewardship with someone who deeply understands nonprofits. The power of Virtuousโ comprehensive suite of tools (including donor management, marketing automation, and online giving platforms) with the capabilities of Infinite Giving sets up nonprofits to grow generosity in a powerful way.
Work Toward Nonprofit Financial Success in 2025
Need help in any of these five essential areas for your nonprofit financial success? Our team at Infinite Giving can help with thoughtful cash management strategies, policy creation, endowment creation, and launching your brokerage account in just three days.
