Stronger Together: Why Finance and Development Collaboration is the Key to Nonprofit Fundraising Success
By: Mike Esposito, CFRE and Yair Segev
Successful nonprofit fundraising doesn’t happen in a silo. For fundraisers to build effective strategies, they must develop relationships across their organization—with Programs, Communications, Data and Operations, and Finance. These collaborations ensure fundraisers understand the work, align messaging, and present accurate, data-driven appeals to donors.
Of all these internal partnerships, the relationship between Development and Finance is perhaps the most critical. Here's why a strong, collaborative approach between these two teams is essential for achieving fundraising goals.
1
Grant Applications: Aligning the Story and the Numbers
Grant applications need to tell a compelling story backed by accurate financial data. When Finance and Development collaborate from the outset, they ensure that narratives about the organization's impact are supported by precise financial figures. Conversely, financial projections are enhanced by the context and stories that Development teams provide. This synergy increases the credibility of grant proposals and boosts the chances of securing funding.
Example: If a grant proposal outlines a $250,000 program, Finance can ensure that indirect costs, staffing, and material expenses are accurately reflected and justified, strengthening the overall ask.
2
Managing Grant Reporting: Systems and Processes for Efficiency
Effective grant management depends on seamless processes. From day one, Finance and Development should work together to set up systems that automate grant reporting. This reduces manual work, minimizes errors, and ensures timely submissions. A clear process allows Development to keep funders informed and Finance to maintain compliance.
Tip: Establishing regular monthly check-ins between the two teams ensures that all grant deliverables are on track and reduces last-minute scrambles.
3
Unified Tracking Systems
Using integrated systems for tracking gifts and grants (CRM and accounting software) creates a single source of truth. This alignment ensures both teams are operating with the same data, reducing discrepancies and confusion.
Recommendation: Ensure that CRM integrations with financial systems are updated regularly. Finance and Development teams should receive joint training sessions on these tools to maintain consistency in data entry and reporting.
4
Financial Planning: Accurate Cash Flow Forecasting
When Finance and Development work together, cash forecasts become more precise. Development provides insight into anticipated pledges and funding, while Finance offers a realistic view of expenses and reserves. This partnership helps identify cash flow gaps early, enabling proactive fundraising strategies.
5
Accurate Historical Financials
For Development teams to confidently present financial health to donors, they need accurate historical financials. Collaboration with Finance ensures that past financial reports are correctly recorded and easily accessible. This transparency builds donor trust and supports long-term relationships.
Tip: Accurate historical financials help demonstrate growth and stability to donors and grantors—key factors for securing major gifts and grants.
6
Grant Reporting: Timely and Transparent Communication
Finance plays a crucial role in creating periodic grant reports that compare actual spending to budgeted allocations. When these reports are accurate and timely, Development can update donors and funders on how funds are being used and make requests for additional funding if necessary.
When Finance and Development work as partners, nonprofits operate more effectively, communicate more transparently, and achieve greater fundraising success. By aligning on grant applications, tracking systems, reporting processes, and financial planning, these two teams ensure the organization's financial health and fundraising goals are mutually supported.
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About the Authors
Mike Esposito, CFRE is a nonprofit fundraising consultant with nearly a decade of experience helping organizations grow through innovative fundraising strategies. He is dedicated to fostering collaboration and driving sustainable impact through thoughtful fundraising practices.
Yair Segev is the Nonprofit Lead at Escalon Services, specializing in financial solutions for nonprofits. Yair partners with organizations to streamline finance operations, ensuring they have the clarity and support needed to achieve their mission.