If your nonprofit's funding picture changes month to month, the most reliable way to stay ahead is to forecast each revenue stream separately, document every grant allocation, and decide in advance what you will do in the best and worst cases.

That is the core message from the second session of Industry Intelligence, Abacum's webinar series for FP&A leaders. The panel covered how nonprofit finance teams plan today, where spreadsheets fall short, and what the best-prepared teams do before a board or finance committee meeting.

Who spoke in this session?

Speaker	Role	Organization
Christian Wattig (host)	Founder; former FP&A leader at Procter & Gamble, Unilever and Squarespace	Inside FP&A
Dean Quiambao	Northern California market leader	Armanino
Kate Hultin-Schott	Senior director, nonprofit consulting group	Armanino

Armanino is a top 20 accounting and consulting firm that works with more than 2,500 nonprofits across the US.

Key takeaways

Almost 95% of Armanino's nonprofit clients still plan in Excel, according to Dean. The question for your team is when the spreadsheet will break.
Forecast revenue by stream. Individual and corporate giving follows patterns, while grants need an application-by-application view.
Reconcile what development says it raised with what accounting has recognized every month.
Document every grant and overhead allocation method. Auditors want the reasoning, an audit trail, and the date the method changed.
Scenario planning is the best defense against volatility. Decide ahead of time what you would do in the best and worst cases.
Use AI for the "what" and the "why" of variance analysis so your team has more time for the "so what."
A finance committee package needs, at minimum, a statement of financial position, a statement of activities and a cash forecast.
Start with a 60 to 90-day roadmap off Excel, and clean your data first.

Why do most nonprofits still plan in Excel?

Spreadsheets have been the only option flexible enough for how nonprofits work. Dean estimates that almost 95% of Armanino's nonprofit clients still plan in Excel, and only the largest organizations build custom tools.

Kate explained the reason: most FP&A tools weren't built for nonprofits, and the ones that were often don't fit the budget. Every organization has its own programs, and every board wants to see the numbers cut a different way.

The risk grows with complexity. With many stakeholders and dozens of program budgets to manage, the question for your team becomes: when is the spreadsheet going to break?

What makes nonprofit financial planning harder right now?

Funding volatility is the biggest challenge, followed by interest rate uncertainty and constant staffing pressure.

"What you think is going to be your funding source in the next three months is probably not your funding source in the next 12 months," Kate said. "And it's been like that for the last two years." People work at nonprofits for the mission, but the cost of living keeps rising, which adds to the staffing squeeze.

The pressure peaks before a finance committee meeting. Most of the prep time goes to three tasks:

Exporting data from the ERP
Fixing formulas
Formatting reports

That leaves very little time for the analysis and the story behind the numbers. It also creates whiplash for boards. A board that meets once a quarter may hear one plan for a funding source, then return three months later to find the organization heading in the opposite direction.

How should you forecast nonprofit revenue?

Forecast each revenue stream on its own terms, and agree on definitions before you compare numbers.

Revenue stream	How to forecast it	What to watch
Individual and corporate giving	Start from last year and test whether you have a path to the target. If you raised $1 million last year and want $1.5 million this year, ask whether you can get there.	Patterns hold best for established organizations.
Grants	Track which applications are in, how likely each one is, and whether past funders will give again.	Don't assume "we get it every year." Donors and foundations are changing how they give.

Kate's advice for grants: finance needs regular conversations with the people who manage funder relationships.

Why do definitions matter in nonprofit forecasting?

Different definitions produce different numbers, and mismatched numbers undermine the whole plan. Christian shared a story from his time leading a finance team. A big executive meeting fell apart because finance and marketing defined "website visitor" differently, so their numbers didn't match. The fix is a single source of truth that everyone works from.

Nonprofits know this problem well. Kate said there is almost always a gap between what development says it raised and what accounting has recognized. Reconcile the two every month, so your board never hears $2 million from one team and $1.2 million from another.

How do you track grant compliance and allocate costs?

Document everything. Grant compliance is tricky "every single time," Kate said. Simple grants are rare. Most need program teams to report and allocate costs correctly, which takes ongoing education. When records are messy, billing errors lead to rounds of revisions, and you can't tell whether a grant is worth what it costs to run.

Check the remaining balance before Q4. A common surprise is reaching Q4 and finding a large share of a grant still unspent. Track the remaining balance on each grant against the time left, and the risk becomes visible before the final quarter starts.

Choose and record an allocation method.

Cost type	Common method	Notes
Staff time	Conversations or timesheets	Usually the easiest piece to allocate.
Overhead	Square footage (the classic method) or salary	Square footage makes less sense with remote teams, so some organizations now allocate overhead by salary.

Whatever method you pick, the rule is the same: document it. "As long as you have that, that holds up a lot more in audit," Kate said. Auditors want to see the reasoning, an audit trail, and when the method changed.

How can you plan for funding volatility?

You can't predict volatility, but you can decide ahead of time what you would do in the best and worst cases. Decisions made calmly are better than decisions made in a crisis.

How much warning do teams get when a contract doesn't renew or a major gift is delayed? "Next to none," Kate said. Two things help most:

Clean data
A way for development and program staff to pass early signals up to finance

Christian pointed to research on how companies handled the sudden tariff changes of 2025. The best-prepared teams ran robust scenario planning.

What scenario planning looks like in practice. In the session, Christian showed how this works in Abacum. A delayed gift and a lost state contract were each modeled as scenarios, without touching the baseline. The impact on months of operating cash updated right away. When scenarios take minutes instead of hours across five spreadsheets, your team can run more of them.

How can nonprofit finance teams use AI in FP&A?

AI can take on much of the "what" and the "why" of variance analysis, which frees your team to spend more time on the "so what."

Christian teaches variance analysis in three parts:

Step	Question it answers	Where AI helps
The what	Where do actuals differ from plan?	AI can handle much of this.
The why	What are the drivers?	AI can handle much of this.
The so what	What does it mean for risks, opportunities and next steps?	This is where finance adds the most value, and it usually takes a conversation outside the finance team.

For a deeper walkthrough, see Abacum's guide to budget vs. actuals variance analysis.

The panel's five tips:

Start with AI built into the tools you already use. It stays inside your system, works from your real data and cites its sources, which eases worries about privacy and made-up answers.
Look beyond finance. Kate sees some of the most exciting uses in development and programs, such as agents that help with fundraising.
Think about what AI unlocks, not just hours saved. Dean described a leader who built an AI that tracks their community and drafts outreach emails for weekly review.
Use it to think, not just to automate. Christian shares upcoming presentations with AI and asks it to critique them and predict tough questions.
Connect your AI assistant to your data. With MCP, a general assistant like Claude can pull the latest numbers from Abacum and draft a board deck in your own format.

Governance comes first. Nonprofits handle sensitive donor and constituent data, and boards expect oversight. Set clear policies on which AI tools and subscriptions your organization uses and how.

What belongs in a nonprofit finance committee package?

At a minimum, Kate recommends three items, though the right package depends on your committee and what it reports to the board:

Statement of financial position
Statement of activities
A cash forecast, such as a cash flow statement or a 13-week rolling forecast

Then add the reports your organization needs, such as grants payable for a foundation or debt scenarios for a housing developer.

The question that most often derails these meetings is: "Why do we show this much revenue but not this much cash?" Explain that gap before the meeting, not during it.

Dean, who also sits on boards, wants finance leaders to finish this sentence: "This is what happened, and because of this, here's what we're going to do next." A clear action plan is what makes a report land.

Where should your team start?

Both panelists named one change to make first.

Kate: build a 60 to 90-day roadmap to move off Excel. No new tool works with the flip of a switch, especially at long-standing organizations. Start by cleaning your data so implementation is as painless as possible.

Dean: hold a team "hackathon." Block three or four hours to list your biggest challenges and ask where AI could help. If a solution exists off the shelf and fits the budget, buy it. A donor may even fund it.

Christian added that stepping back is hard when you're always putting out fires. Time spent exploring the numbers without pressure is often when you spot the risk or opportunity nobody has raised yet.

FP&A for nonprofits: frequently asked questions

What is FP&A for nonprofits?

FP&A (financial planning and analysis) for nonprofits covers budgeting, forecasting, scenario planning and reporting across programs, grants and funding sources. The goal is to give leaders and boards a clear view of what happened, why, and what to do next.

Do nonprofits still use Excel for financial planning?

Yes. Dean estimates that almost 95% of Armanino's nonprofit clients still plan in Excel. Only the largest organizations build custom tools, because most FP&A tools weren't built for nonprofits and the ones that were often don't fit the budget.

How do you forecast grant revenue?

Track which applications are in, how likely each one is to be awarded, and whether past funders will give again. Kate warns against assuming "we get it every year," and recommends regular conversations with the people who manage funder relationships.

How should nonprofits allocate overhead costs?

Common methods are square footage and salary. Square footage was the classic approach but makes less sense with remote teams, so some organizations now allocate overhead by salary. Whichever method you choose, document the reasoning, keep an audit trail and record when the method changed.

What should a nonprofit finance committee package include?

At a minimum: a statement of financial position, a statement of activities and a cash forecast, such as a cash flow statement or a 13-week rolling forecast. Add reports specific to your organization, such as grants payable for a foundation or debt scenarios for a housing developer.

How can a nonprofit prepare for funding changes?

Run scenario planning ahead of time for the best and worst cases, such as a delayed major gift or a contract that doesn't renew. Keep your data clean and give development and program staff a way to pass early signals up to finance.

How do you start moving off Excel?

Kate recommends building a 60 to 90-day roadmap and starting with a data cleanup so implementation is as painless as possible.

Can AI help with nonprofit financial planning?

Yes. AI can handle much of the "what" and "why" of variance analysis, which leaves more time for the "so what." Start with AI built into the tools you already use, and set clear governance for donor and constituent data.