These choices might feel safe in the short term, but over time, they erode the organisation’s ability to deliver on its mission.

In my work with not-for-profits, philanthropists and family offices, three recurring financial blind spots stand out.

1. Over-reliance on Cash

Cash is familiar and straightforward, but it does not grow. When reserves are kept only in bank accounts or term deposits, the organisation risks losing ground against inflation.
A stronger approach is to structure reserves so they balance security with growth. Boards often consider:

• Operating Buffer: Holding around three to six months of expenses as a safety net.
• Known Commitments:  Using longer-term deposits for planned programs and future expenses.
• Growth & Impact:  Exploring well-governed, values-aligned investments as part of a broader reserves policy.

This allows organisations to manage short-term stability while building capacity for future impact.

2. Overlooking the Impact of Inflation

Inflation steadily eats away at purchasing power. For an organisation with significant reserves, the effect can be substantial over time.
Boards that adopt a transparent investment policy and align it with their values are often better placed to protect reserves. This is not about taking unnecessary risks.
It is about recognising that standing still financially carries its own risk, and that a balanced strategy can help preserve and grow resources for the future.

3. Neglecting Financial Succession

Leadership succession is often discussed in NFPs. Financial succession is not.
What happens if a treasurer steps down suddenly? How will the organisation adapt if funding sources shift or if a key donor’s priorities change? 

Boards can prepare by:

• Establishing reserve and investment policies that extend beyond individual terms.
• Building long-term relationships with supporters and families.
• Documenting financial processes so new leaders can step in without disruption.

This means not just having a policy but also having a documented process for reviewing and updating it. Financial succession ensures that the strategy outlives the individuals currently around the table.

The most resilient not-for-profits are those that build strategies for growth, not just survival.
That requires boards to move beyond comfort zones, be realistic about inflation, and prepare for change in both people and funding. Financial leadership is not separate from mission. It is the foundation that allows the mission to grow.

If you are ready to shift your organisation from surviving to thriving, let’s have a conversation.

Disclaimer:

The information provided is for general informational purposes only and reflects my personal opinions. It should not be considered as financial, legal, or investment advice. You should consult with a qualified professional before making any decisions based on this information.