Massachusetts nonprofits have always been resilient, adapting to changing economic landscapes and evolving community needs. But heading into 2025, financial sustainability is at the top of nearly 70% of Massachusetts nonprofit leaders’ priority lists, according to recent sector surveys.

Strong financial management is no longer a back-office task — it is a frontline strategy for fulfilling your mission, maintaining donor trust, and securing critical funding.
If your organization is planning for growth and resilience, now is the time to tighten your financial practices.

Here are the essential best practices every Massachusetts nonprofit should focus on in 2025.

1. Strengthen Internal Financial Controls

Robust internal financial controls are the foundation of every trusted nonprofit. Weak controls open the door to errors, mismanagement, and even fraud — risks that funders and auditors are increasingly vigilant about.

Key actions to strengthen controls:

  • Separate duties: For example, one staff member collects donations, another records them, and a third handles deposits.

  • Document policies: Write clear procedures for handling cash, grants, payroll, and reimbursements.

  • Review regularly: Ensure someone outside of daily financial operations, such as a board member or external accountant, reviews reconciliations and financial statements periodically.

Massachusetts nonprofits receiving state or federal grants must especially demonstrate tight financial systems.
Now is the time to update policies, especially if your nonprofit has expanded programs or funding streams in the past year.

2. Improve Budgeting and Forecasting Accuracy

A static annual budget created each January is no longer enough.
In today’s dynamic funding environment, nonprofits need budgets that adapt — and forecasts that guide smarter decisions.

For 2025, make sure to:

  • Build budgets based on real data, not just optimistic projections.

  • Conduct mid-year budget reviews and adjust for new grants, changing expenses, or shifting program priorities.

  • Prepare flexible “what-if” scenarios to address funding shortfalls or expansion opportunities.

Affordable nonprofit-specific tools like QuickBooks Nonprofit, Sage Intacct, or support from Virtual CFO services can streamline forecasting without overburdening your team.

Accurate budgeting strengthens your board’s oversight, improves grant reporting, and keeps your nonprofit financially agile.

3. Prioritize Grant Compliance and Reporting

Grant compliance is a daily priority, not something to scramble over at reporting deadlines.
Massachusetts nonprofits working with agencies like the Executive Office of Health and Human Services, federal departments, or private foundations must demonstrate that every dollar is spent properly.

Steps to prioritize grant compliance:

  • Implement systems to track grant funds separately from general operating funds.

  • Document allowable costs clearly according to grant terms.

  • Maintain real-time, accessible records to simplify reporting and prepare for potential audits.

Strong grant management not only protects your current funding but also positions your nonprofit favorably for future opportunities.

Effective compliance practices are a mark of operational excellence — and they build confidence with funders looking for reliable partners.

4. Focus on Financial Transparency for Donors and Boards

Transparency has become a top donor expectation. Many contributors now review nonprofit profiles on platforms like GuideStar, Charity Navigator, or the Massachusetts Attorney General’s website before making gifts.

Enhance financial transparency by:

  • Providing regular, easy-to-understand financial reports to your board.

  • Using dashboards to highlight critical indicators like program vs. administrative costs.

  • Offering financial literacy sessions for board members to improve their understanding and oversight.

When donors and board members see responsible, transparent financial management, they are more likely to deepen their engagement and investment in your mission.

5. Prepare for 990 Filing and Compliance Updates

Your IRS Form 990 is a public document — and it tells a powerful story about your nonprofit’s operations and leadership.

Make sure for 2025 that you:

  • File Form 990 by the 15th day of the 5th month after your fiscal year-end.

  • Accurately disclose governance policies, program service accomplishments, and expense allocations.

  • Maintain clear documentation that matches your reported financials, strengthening your credibility if funders or watchdog groups review your filings.

Massachusetts nonprofits must also renew their charity registrations annually with the Attorney General’s Office — incomplete or late filings can delay grant payments and impact your public standing.

Partnering with a CPA who specializes in nonprofit accounting ensures that your filings are accurate, complete, and aligned with best practices.

Build Financial Resilience for 2025 and Beyond

Nonprofits in Massachusetts are facing a future that demands both passion and precision.
Building strong financial systems is not just about compliance — it is about advancing your mission with integrity and resilience.

At Peter Witts CPA, we provide specialized nonprofit accounting services, grant compliance support, tax preparation, and Virtual CFO services to help Massachusetts nonprofits succeed.
Whether you are looking to refine your internal controls, forecast smarter, or strengthen your grant management practices, we are ready to support you.

Secure your nonprofit’s financial success for 2025 — schedule a consultation with Peter Witts CPA today.