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L. V. Browne, CPA, 1900 Jay Ell Drive, Richardson, TX (2026)

10/23/2026

When was the last time you reviewed your pricing structure? 🤔

If you’re like most business owners, you set prices once and rarely look back. But if your costs have gone up or if you’re confusing markup with margin, some of your offerings might be quietly eroding your bottom line.

Before you wrap up this quarter, set aside an hour to ask yourself:
1️⃣ What does it actually cost me to deliver (including fully loaded labor)?
2️⃣ Has my price changed since costs last increased?
3️⃣ Would I sell this at this price if I were starting today?

💡 We break down the exact math and real-world project examples in our latest article!

𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐚𝐧𝐝 𝐌𝐚𝐫𝐠𝐢𝐧𝐬: 𝐀𝐫𝐞 𝐘𝐨𝐮 𝐀𝐜𝐭𝐮𝐚𝐥𝐥𝐲 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐥𝐞 𝐨𝐧 𝐄𝐚𝐜𝐡 𝐒𝐞𝐫𝐯𝐢𝐜𝐞 𝐨𝐫 𝐏𝐫𝐨𝐝𝐮𝐜𝐭?

Your overall P&L might show a healthy profit, but strong sellers could be hiding offerings that are quietly losing money. Pricing decides your ultimate profitability, yet most owners set prices once and rarely revisit them.

𝐌𝐚𝐫𝐠𝐢𝐧 𝐯𝐬. 𝐌𝐚𝐫𝐤𝐮𝐩: 𝐓𝐡𝐞 𝐌𝐢𝐱-𝐔𝐩 𝐓𝐡𝐚𝐭 𝐂𝐨𝐬𝐭𝐬 𝐌𝐨𝐧𝐞𝐲
Markup is what you add to your cost; margin is the percentage of the selling price you actually keep. Adding a 50% markup to a $60 item gives you a $90 price tag—leaving a 33% margin, not 50%. To hit a true 50% margin, your price should be $120.

𝐊𝐧𝐨𝐰 𝐘𝐨𝐮𝐫 𝐓𝐫𝐮𝐞 𝐂𝐨𝐬𝐭
Margins are only as accurate as your cost data. Most owners forget to fully account for:

𝐅𝐮𝐥𝐥𝐲 𝐋𝐨𝐚𝐝𝐞𝐝 𝐋𝐚𝐛𝐨𝐫: 𝐖𝐚𝐠𝐞𝐬, 𝐭𝐚𝐱𝐞𝐬, 𝐛𝐞𝐧𝐞𝐟𝐢𝐭𝐬, 𝐩𝐥𝐮𝐬 𝐚 𝐯𝐚𝐥𝐮𝐞 𝐨𝐧 𝐲𝐨𝐮𝐫 𝐨𝐰𝐧 𝐭𝐢𝐦𝐞.
Direct & Extra Costs: Materials, software, merchant fees, and scope creep/unbillable client communication.

𝐐𝐮𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐭𝐨 𝐀𝐬𝐤 𝐀𝐛𝐨𝐮𝐭 𝐄𝐯𝐞𝐫𝐲 𝐎𝐟𝐟𝐞𝐫𝐢𝐧𝐠
Set aside an hour this quarter to ask yourself:

What does it actually cost me to deliver, with everything included?
Has my price changed since my costs last went up?
Would I choose to sell this at this price if I were starting today?

💡 Want to dive deeper into the math, see real-world project examples, and learn what to do with low-margin services?

👉 Read the full article on our website:
https://lvbrownecpa.com/2026/10/pricing-and-margins-are-you-actually-profitable-on-each-service-or-product/

10/16/2026

Restricted doesn't mean untouched. 📊 Treating a restricted grant as dormant cash—or letting six figures sit idle in a low-interest account—means missed opportunities and heightened audit risk. From tracking precision to expiring restrictions, proper management takes ongoing discipline.

Check out our latest article breaking down the four compliance traps nonprofits need to avoid and how to manage restricted funds more actively. ⬇️

𝐁𝐞𝐲𝐨𝐧𝐝 𝐭𝐡𝐞 𝐁𝐚𝐧𝐤 𝐀𝐜𝐜𝐨𝐮𝐧𝐭: 𝐖𝐡𝐲 𝐍𝐨𝐧𝐩𝐫𝐨𝐟𝐢𝐭𝐬 𝐀𝐫𝐞 𝐆𝐞𝐭𝐭𝐢𝐧𝐠 𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐞𝐝 𝐅𝐮𝐧𝐝𝐬 𝐀𝐥𝐥 𝐖𝐫𝐨𝐧𝐠

There's a common assumption in the nonprofit world that restricted funds are essentially dormant — money that arrives, waits patiently in an account, and eventually gets spent on whatever the donor designated. It sounds harmless. It's also wrong, and the gap between that assumption and reality is where a surprising number of compliance issues, missed opportunities, and audit findings quietly originate.

Restricted funds aren't passive. They require active management from the moment they arrive until the moment the restriction is satisfied — and organizations that treat them as a "set it and forget it" line item are taking on more risk than they realize.

𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐞𝐝 𝐃𝐨𝐞𝐬𝐧'𝐭 𝐌𝐞𝐚𝐧 𝐔𝐧𝐭𝐨𝐮𝐜𝐡𝐞𝐝 — 𝐈𝐭 𝐌𝐞𝐚𝐧𝐬 𝐓𝐫𝐚𝐜𝐤𝐞𝐝

The moment a restricted gift comes in, it needs to be recorded separately from unrestricted funds, tagged to its specific purpose, and tracked through every stage of use. That means every expenditure drawn against that grant needs to be coded correctly, every dollar needs to be traceable back to the original restriction, and the organization needs to be able to prove, at any point, exactly how much of that restricted balance remains. This isn't a one-time setup — it's ongoing bookkeeping discipline that has to hold up to scrutiny, especially if a funder or auditor asks for a full accounting.

𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐞𝐝 𝐂𝐚𝐬𝐡 𝐒𝐭𝐢𝐥𝐥 𝐍𝐞𝐞𝐝𝐬 𝐚 𝐇𝐨𝐦𝐞 — 𝐚𝐧𝐝 𝐚 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

Here's what a lot of organizations miss: restricted funds sitting in a low- or no-interest checking account are a missed opportunity. If a grant won't be fully spent for 12–18 months, that cash can often be placed somewhere it earns a return — a high-yield savings account or short-term investment vehicle — without violating the restriction, as long as the funds remain fully accessible when needed. A CFO looks at the timeline of every restricted fund and asks whether that money is working as hard as it can while it waits to be used. Letting six figures sit idle for a year because "it's restricted, so we don't think about it" is money left on the table.

𝐑𝐞𝐩𝐨𝐫𝐭𝐢𝐧𝐠 𝐎𝐛𝐥𝐢𝐠𝐚𝐭𝐢𝐨𝐧𝐬 𝐃𝐨𝐧'𝐭 𝐖𝐚𝐢𝐭 𝐔𝐧𝐭𝐢𝐥 𝐭𝐡𝐞 𝐆𝐫𝐚𝐧𝐭 𝐈𝐬 𝐒𝐩𝐞𝐧𝐭

Many restricted grants come with reporting requirements that kick in well before the funds are fully used — quarterly updates, interim progress reports, or specific documentation tied to milestones rather than final spend-down. Treating restricted funds as something you only think about at the end of the grant period means scrambling to reconstruct records under deadline pressure, instead of maintaining reporting-ready documentation as you go.

𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐢𝐨𝐧𝐬 𝐂𝐚𝐧 𝐀𝐥𝐬𝐨 𝐄𝐱𝐩𝐢𝐫𝐞 𝐨𝐫 𝐑𝐞𝐪𝐮𝐢𝐫𝐞 𝐀𝐜𝐭𝐢𝐨𝐧

Time-restricted funds don't stay restricted forever — but the release of that restriction isn't automatic in the sense that nothing needs to happen. The organization needs to recognize when the restriction has been satisfied, properly reclassify those funds on the financial statements, and, in the case of unspent time-restricted funds, sometimes communicate with the donor about next steps. Skipping this step means financial statements that don't accurately reflect what's actually available for use.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

Restricted funds require more active management, not less. They need to be tracked with precision, positioned intentionally so they aren't sitting idle, and monitored against reporting deadlines that don't pause just because the money hasn't been spent yet. Organizations that treat restricted funds as "money we'll deal with later" are the ones most likely to get caught off guard — by an auditor, a funder, or their own books.

Want to make sure your nonprofit’s restricted funds are audit-ready and working as hard as possible for your mission? Let's take a closer look at your grant tracking and cash positioning. Email us at [email protected], send us a message or schedule time directly at calendly.com/brownecpa to discuss how we can help.

10/12/2026

Today, L.V. Browne CPA honors Indigenous Peoples Day 🌄
We recognize, respect, and celebrate the rich cultures, histories, and enduring contributions of Indigenous peoples — not just today, but always.

10/07/2026

Labeled as a contractor, but treated like an employee? 🏷️ The IRS looks far beyond signed agreements and year-end 1099s to determine worker classification. With 1099 season right around the corner, now is the time to review your worker relationships before a tax notice or unemployment claim forces the issue.

Check out our latest article breaking down the three key IRS criteria, multi-agency costs, and what business owners need to verify before year-end. ⬇️

𝐖𝐨𝐫𝐤𝐞𝐫 𝐂𝐥𝐚𝐬𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧: 𝟏𝟎𝟗𝟗 𝐯𝐬. 𝐖-𝟐 𝐚𝐧𝐝 𝐖𝐡𝐚𝐭 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 𝐎𝐰𝐧𝐞𝐫𝐬 𝐒𝐡𝐨𝐮𝐥𝐝 𝐂𝐡𝐞𝐜𝐤 𝐁𝐞𝐟𝐨𝐫𝐞 𝐘𝐞𝐚𝐫-𝐄𝐧𝐝

𝐓𝐡𝐞 𝐋𝐚𝐛𝐞𝐥 𝐨𝐧 𝐭𝐡𝐞 𝐏𝐚𝐩𝐞𝐫𝐰𝐨𝐫𝐤 𝐃𝐨𝐞𝐬𝐧'𝐭 𝐃𝐞𝐜𝐢𝐝𝐞 𝐈𝐭

Many owners assume that a signed contractor agreement and a 1099 at year-end settle the question. They don't. Agencies look past the paperwork to the day-to-day reality of the relationship. A worker who is labeled a contractor but works set hours, follows your instructions, and uses your equipment may still be an employee in the eyes of the IRS, no matter what the agreement says.

𝐓𝐡𝐞 𝐓𝐡𝐫𝐞𝐞 𝐂𝐚𝐭𝐞𝐠𝐨𝐫𝐢𝐞𝐬 𝐭𝐡𝐞 𝐈𝐑𝐒 𝐄𝐱𝐚𝐦𝐢𝐧𝐞𝐬

The IRS groups its common-law test into three areas. Behavioral control asks whether the business directs how the work gets done, including schedules, methods, and training. Financial control asks who supplies tools and covers expenses, whether the worker can realize a profit or loss, and whether they serve other clients. The relationship of the parties looks at written agreements, whether benefits are provided, and whether the arrangement is ongoing or tied to a specific project. No single factor is decisive. The picture as a whole is what counts, which is why gray areas are common and worth reviewing.

𝐓𝐡𝐞 𝐑𝐞𝐚𝐥 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐌𝐢𝐬𝐜𝐥𝐚𝐬𝐬𝐢𝐟𝐢𝐜𝐚𝐭𝐢𝐨𝐧 𝐀𝐜𝐫𝐨𝐬𝐬 𝐀𝐠𝐞𝐧𝐜𝐢𝐞𝐬

Reclassifying a contractor as an employee triggers back payroll taxes, penalties, interest, and potential wage or overtime claims that multiply across similar roles. Adding to the challenge, agencies like the IRS, Texas Workforce Commission, and U.S. Department of Labor each enforce distinct tests—meaning passing an IRS review won't shield your business from state unemployment liability.

𝐈𝐟 𝐓𝐡𝐞𝐲 𝐀𝐫𝐞 𝐂𝐨𝐧𝐭𝐫𝐚𝐜𝐭𝐨𝐫𝐬, 𝐆𝐞𝐭 𝐭𝐡𝐞 𝐏𝐚𝐩𝐞𝐫𝐰𝐨𝐫𝐤 𝐑𝐢𝐠𝐡𝐭

For workers who clearly qualify as contractors, the administrative side matters just as much. Collect a Form W-9 before the first payment, not in January when the worker may be hard to reach. The federal reporting threshold for Forms 1099-NEC and 1099-MISC rose from $600 to $2,000 for payments made on or after January 1, 2026. That means fewer forms for many businesses this year, but the change doesn't affect how workers are classified or whether the income is taxable. Forms for 2026 payments are due at the end of January, so year-end is the time to confirm your vendor list, payment totals, and W-9s are complete.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

Worker classification is a decision to make deliberately, and it's better made before a tax notice or an unemployment claim forces the issue. Reviewing each worker against the IRS criteria takes far less time and money than defending a misclassification after the fact. With 1099 season approaching, now is the right time to look at every contractor relationship in your business and confirm it holds up.

Want to make sure your worker classifications hold up? We built a 1099 vs. W-2 Worker Classification Worksheet to guide you through reviewing every role step-by-step. If you’d like a 𝐅𝐑𝐄𝐄 copy of the worksheet or need expert help evaluating a gray-area situation, email us at [email protected] or send us a message to schedule a call today.

10/05/2026

LVBrowne CPA is serving up excellent accounting, audit, tax, and advisory services. Happy Oktoberfest! 🍻🍂

10/01/2026

Building a healthy operating reserve starts long before a funding crisis hits—it starts with how your chart of accounts is structured. 📊

Without a clean functional expense allocation, it’s hard to know your true monthly burn rate, track unrestricted cash accurately, or understand your real financial cushion when a grant is delayed or a donor pauses giving.

In this edition of In Your Pocket, we break down why your chart of accounts is where true financial resilience begins, how to allocate shared costs fairly, and how to give your board total confidence in your numbers.

➡️ Read below for the full breakdown!

𝐅𝐮𝐧𝐜𝐭𝐢𝐨𝐧𝐚𝐥 𝐄𝐱𝐩𝐞𝐧𝐬𝐞 𝐀𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐨𝐧: 𝐖𝐡𝐲 𝐘𝐨𝐮𝐫 𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐈𝐬 𝐖𝐡𝐞𝐫𝐞 "𝐋𝐨𝐰 𝐎𝐯𝐞𝐫𝐡𝐞𝐚𝐝" 𝐑𝐞𝐚𝐥𝐥𝐲 𝐒𝐭𝐚𝐫𝐭𝐬

Every nonprofit is asked some version of the same question by donors, funders, and board members: how much of our money goes to the mission? The answer depends on how expenses are categorized, and that starts with the chart of accounts. When it's built well, program, administrative, and fundraising costs flow into reports cleanly all year. When it isn't, the organization scrambles at year-end to reconstruct numbers it should have been tracking from the start.

𝐖𝐡𝐚𝐭 𝐭𝐡𝐞 𝐓𝐡𝐫𝐞𝐞 𝐅𝐮𝐧𝐜𝐭𝐢𝐨𝐧𝐬 𝐀𝐜𝐭𝐮𝐚𝐥𝐥𝐲 𝐌𝐞𝐚𝐧

Nonprofits report expenses by function: program costs deliver the mission, administrative costs keep the organization running (leadership, accounting, compliance), and fundraising costs raise the money to do both. Most nonprofits are expected to report this breakdown, whether in their Form 990 or in audited financial statements. Funders often ask for it too. Getting the categories right matters because the resulting ratios shape how donors, grantmakers, and boards judge the organization.

𝐖𝐡𝐲 "𝐋𝐨𝐰 𝐎𝐯𝐞𝐫𝐡𝐞𝐚𝐝" 𝐈𝐬 𝐚 𝐒𝐡𝐚𝐤𝐲 𝐘𝐚𝐫𝐝𝐬𝐭𝐢𝐜𝐤

Overhead ratios are easy to quote and easy to misread. An organization can look efficient simply because it under-invests in the accounting, technology, and staff development that keep it healthy, or because it pushes shared costs into the program column without a defensible basis. Neither helps the mission. A thoughtful allocation policy gives the board and funders an honest picture instead of a flattering one, and it holds up when someone asks how the numbers were calculated.

𝐀𝐥𝐥𝐨𝐜𝐚𝐭𝐢𝐧𝐠 𝐒𝐡𝐚𝐫𝐞𝐝 𝐂𝐨𝐬𝐭𝐬 𝐅𝐚𝐢𝐫𝐥𝐲

Some costs clearly belong to one function. Many don't. Rent, utilities, software, and staff salaries often support programs, administration, and fundraising at the same time. Common approaches include time-and-effort tracking for salaries, square footage for occupancy costs, and headcount for general operating expenses. The method matters less than three things: it's reasonable, it's documented, and it's applied consistently from one year to the next. Changing methods without explanation is what draws questions from auditors and funders.

𝐁𝐮𝐢𝐥𝐝 𝐈𝐭 𝐈𝐧𝐭𝐨 𝐭𝐡𝐞 𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬

This setup lets you run a report by program, by function, or by restriction without recoding transactions later. It's also what makes grant reporting straightforward, since every dollar is tagged to the fund it belongs to when it's spent.

𝐂𝐨𝐦𝐦𝐨𝐧 𝐌𝐢𝐬𝐭𝐚𝐤𝐞𝐬 𝐭𝐨 𝐀𝐯𝐨𝐢𝐝

The most frequent problem is putting everything in administrative because it's easier at entry time, which makes programs look cheaper than they are and leaves the organization without data to support grant requests. Close behind are allocating inconsistently year to year, creating too many accounts that no one uses correctly, and having no written policy explaining how shared costs are split. All of these are fixable, and they're much easier to fix early in the year than at close.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

A chart of accounts is often treated as a bookkeeping setup task, but for a nonprofit it shapes financial reporting, grant compliance, and how the organization is perceived. Setting it up around functions and funds from the start makes year-end reporting smoother, gives the board better information, and gives you a clear answer the next time someone asks where the money goes. If your chart of accounts hasn't been reviewed in a while, this is a good quarter to look at it.

We've built a 𝐅𝐑𝐄𝐄 𝐂𝐡𝐚𝐫𝐭 𝐨𝐟 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐓𝐞𝐦𝐩𝐥𝐚𝐭𝐞 designed for fund accounting at small nonprofits. L.V. Browne, CPA, works with nonprofit boards and staff to design internal controls, present multi-year trends, and prepare clear program-vs-overhead reporting. Want a copy, or need help customizing one for your organization? Send us a message to schedule a call, or contact us directly at [email protected].

09/25/2026

Every nonprofit leader faces unexpected moments: a grant payment arrives late, a major donor pauses giving, or a key expense spikes. But an operating reserve is what separates the organizations that absorb the shock from those forced to make hard, sudden choices. 📊

Without a clear understanding of your unrestricted cash, monthly burn rate, and funding volatility, it’s easy to mistake overall cash on hand for a true financial cushion.

Experienced CFOs, auditors, and proactive boards look past generic benchmarks to establish a written reserve policy, setting realistic targets that protect operations and prevent cash flow crises. Understanding your months of reserves gives your leadership and board complete confidence in navigating uncertainty.

Read below for the full breakdown.

𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐑𝐞𝐬𝐞𝐫𝐯𝐞𝐬: 𝐇𝐨𝐰 𝐌𝐚𝐧𝐲 𝐌𝐨𝐧𝐭𝐡𝐬 𝐨𝐟 𝐂𝐚𝐬𝐡 𝐃𝐨𝐞𝐬 𝐘𝐨𝐮𝐫 𝐍𝐨𝐧𝐩𝐫𝐨𝐟𝐢𝐭 𝐑𝐞𝐚𝐥𝐥𝐲 𝐍𝐞𝐞𝐝?

Every nonprofit leader has faced the moment when something unexpected lands on the calendar: a grant payment arrives late, a major donor pauses their giving, or a key expense spikes. Organizations with a financial cushion absorb the shock and keep serving their mission. Those without one make hard choices quickly, like freezing hiring, delaying payroll, or scaling back programs. An operating reserve is what separates the two, and it's one of the most important financial safeguards a nonprofit can build.

𝐖𝐡𝐚𝐭 𝐚𝐧 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 𝐈𝐬 (𝐚𝐧𝐝 𝐈𝐬𝐧'𝐭)

An operating reserve is a portion of unrestricted funds set aside to cover shortfalls, cash flow gaps, and unexpected costs. It isn't a slush fund, and it isn't the same as the total cash in your bank account. Money that donors have restricted to a particular program or purpose can't count toward it, because it isn't available to cover general expenses. A reserve only works if the money is truly yours to use when you need it.

𝐇𝐨𝐰 𝐭𝐨 𝐂𝐚𝐥𝐜𝐮𝐥𝐚𝐭𝐞 𝐘𝐨𝐮𝐫 𝐌𝐨𝐧𝐭𝐡𝐬 𝐨𝐟 𝐑𝐞𝐬𝐞𝐫𝐯𝐞𝐬

The standard measure is simple: divide your available unrestricted cash and liquid assets by your average monthly operating expenses. If your organization has $150,000 in unrestricted, accessible funds and spends about $50,000 a month, you have three months of reserves. Be careful about what goes into the numerator. Property, equipment, and receivables you may not collect for months shouldn't be counted as liquid. And be honest about the denominator, using your actual average monthly spending instead of a best-case figure.

𝐇𝐨𝐰 𝐌𝐮𝐜𝐡 𝐈𝐬 𝐄𝐧𝐨𝐮𝐠𝐡?

Many advisors point to three to six months of operating expenses as a healthy range, but the right target depends on your organization's risk profile. An organization that relies on one large grant or on government reimbursements needs a larger cushion than one with revenue spread across many sources. Seasonal fundraising, heavy fixed costs like payroll and rent, and unpredictable funding cycles all push the target higher. The goal is a number that reflects how much volatility your organization actually faces, not a generic benchmark.

𝐏𝐮𝐭 𝐭𝐡𝐞 𝐏𝐨𝐥𝐢𝐜𝐲 𝐢𝐧 𝐖𝐫𝐢𝐭𝐢𝐧𝐠

A reserve without a policy is easy to spend without noticing. A written policy should set a target and a minimum floor, define what circumstances justify drawing on the reserve, and require board approval to do so. It should also include a plan for replenishing the fund afterward, with a timeline. That structure keeps the reserve from becoming a routine source of budget relief and protects it for real emergencies. It also gives future leadership a clear framework instead of a judgment call made under pressure.

𝐁𝐮𝐢𝐥𝐝𝐢𝐧𝐠 𝐚 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 𝐖𝐡𝐞𝐧 𝐌𝐚𝐫𝐠𝐢𝐧𝐬 𝐀𝐫𝐞 𝐓𝐡𝐢𝐧

Most organizations don't build a reserve in one year. The most reliable approach is to make it a line in the budget, setting aside a small, consistent amount, or a percentage of any unrestricted surplus or unexpected gift. Aim for one month first, then build toward the target in stages. When negotiating with funders, ask for general operating support wherever you can, since those dollars are the ones that can strengthen your cushion. Even modest, steady progress changes how prepared the organization is.

𝐃𝐨𝐧'𝐭 𝐋𝐞𝐭 𝐈𝐭 𝐒𝐢𝐭 𝐎𝐮𝐭 𝐨𝐟 𝐒𝐢𝐠𝐡𝐭

The board should see reserves regularly, not only when there's a problem. Reporting months of reserves against your policy minimum each quarter, as part of your board financial dashboard, turns it into a number leadership tracks and manages. Donors and funders also appreciate transparency here. A clearly explained reserve policy shows responsible stewardship, and it answers the question of why you're holding funds before anyone has to ask.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

An operating reserve is what lets a nonprofit respond to a difficult moment with a plan instead of a scramble. It protects staff, programs, and the people you serve when funding shifts, and it gives your board and funders confidence in how the organization is managed. If your organization doesn't have a reserve target and policy yet, this is a good quarter to set one.

Building an operating reserve isn't just a best practice—it's the difference between responding to financial shifts with a strategic plan and scrambling to keep programs running. L. V. Browne, CPA helps nonprofit leaders and boards evaluate their financial cushion with the same clarity a CFO brings, so every target reflects your true risk profile, operating costs, and long-term stability, not just generic rules of thumb. Ready to calculate your reserves and build a clear policy for your organization? Reach out to our team at [email protected] or send us a message to schedule a consultation today.

09/24/2026

Many business owners land on their pricing by doing what everyone else is doing: checking competitor rates, picking a number that feels safe, and moving on. But pricing by 𝐰𝐡𝐚𝐭 𝐭𝐡𝐞 𝐦𝐚𝐫𝐤𝐞𝐭 𝐰𝐢𝐥𝐥 𝐛𝐞𝐚𝐫 isn’t a strategy—it’s just a guess dressed up as a decision. 📊

Without looking deep into your 𝐜𝐨𝐬𝐭 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞, 𝐯𝐚𝐥𝐮𝐞 𝐩𝐫𝐨𝐩𝐨𝐬𝐢𝐭𝐢𝐨𝐧, 𝐚𝐧𝐝 𝐩𝐫𝐨𝐟𝐢𝐭 𝐦𝐚𝐫𝐠𝐢𝐧𝐬, a "reasonable" price can quietly erode your bottom line—even when sales look strong.

Experienced CFOs and strategic advisors know that true 𝐩𝐫𝐢𝐜𝐢𝐧𝐠 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐲 starts with understanding your non-negotiable cost floor, positioning for the value you deliver, and proactively reviewing your rates before cash gets tight. Knowing your numbers protects your business, prevents margin squeeze, and gives you complete confidence in your growth.

Read below for the full breakdown.

𝐒𝐭𝐨𝐩 𝐆𝐮𝐞𝐬𝐬𝐢𝐧𝐠 𝐘𝐨𝐮𝐫 𝐑𝐚𝐭𝐞𝐬: 𝐓𝐡𝐞 𝐂𝐅𝐎’𝐬 𝐁𝐥𝐮𝐞𝐩𝐫𝐢𝐧𝐭 𝐟𝐨𝐫 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐟𝐨𝐫 𝐏𝐫𝐨𝐟𝐢𝐭

Ask most business owners how they landed on their pricing, and you'll hear some version of the same answer: they looked at what competitors charge, picked a number that felt reasonable, and moved on. It's not a bad starting point — but it's not a strategy either. It's a guess dressed up as a decision. And it's one of the most common reasons profitable-looking businesses quietly struggle to make real money.

A CFO doesn't ask what the market will bear. They ask what the business needs to charge to be sustainably profitable — and then figure out how to position that price in the market.

𝐂𝐨𝐬𝐭-𝐁𝐚𝐬𝐞𝐝 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐈𝐬 𝐭𝐡𝐞 𝐅𝐥𝐨𝐨𝐫, 𝐍𝐨𝐭 𝐭𝐡𝐞 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲

Most owners have some sense of their costs, but few actually build pricing from the ground up. A CFO starts here: what does it truly cost to deliver this product or service, including labor, materials, overhead allocation, and the time spent that never gets billed directly? That number is the floor. Price below it, and every sale loses money regardless of how busy you are. Too many businesses discover this only after a "successful" year that somehow left no profit behind.

Knowing your true cost isn't the ceiling on your pricing — it's the non-negotiable minimum everything else has to clear.

𝐂𝐨𝐦𝐩𝐞𝐭𝐢𝐭𝐨𝐫 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐓𝐞𝐥𝐥𝐬 𝐘𝐨𝐮 𝐭𝐡𝐞 𝐋𝐚𝐧𝐝𝐬𝐜𝐚𝐩𝐞, 𝐍𝐨𝐭 𝐘𝐨𝐮𝐫 𝐍𝐮𝐦𝐛𝐞𝐫

Looking at what competitors charge is useful for context — it tells you what the market is used to paying and where you sit relative to alternatives. But copying a competitor's price assumes your cost structure, overhead, and margin needs are identical to theirs. They rarely are. A competitor with lower overhead, different labor costs, or a different business model can profitably charge a price that would quietly bankrupt you. Matching their number without knowing your own is pricing blind.

𝐕𝐚𝐥𝐮𝐞-𝐁𝐚𝐬𝐞𝐝 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐈𝐬 𝐖𝐡𝐞𝐫𝐞 𝐭𝐡𝐞 𝐑𝐞𝐚𝐥 𝐌𝐚𝐫𝐠𝐢𝐧 𝐋𝐢𝐯𝐞𝐬

The businesses with the healthiest margins usually aren't the cheapest option in the market — they're the ones that have identified what makes them different and priced accordingly. This means understanding what a customer actually gets from working with you: speed, quality, expertise, reliability, outcomes. When pricing reflects value delivered rather than just cost plus a markup, businesses create room for healthier margins without needing to constantly chase volume to stay profitable.

This is also where a CFO looks at pricing by segment or offering — not every product or service needs to carry the same margin, and not every customer needs to be priced the same way.

𝐑𝐞𝐯𝐢𝐬𝐢𝐭 𝐏𝐫𝐢𝐜𝐢𝐧𝐠 𝐨𝐧 𝐚 𝐒𝐜𝐡𝐞𝐝𝐮𝐥𝐞, 𝐍𝐨𝐭 𝐚 𝐂𝐫𝐢𝐬𝐢𝐬

One of the most common pricing mistakes is only revisiting it when costs spike or cash gets tight. By then, you're raising prices defensively, which is a harder conversation than raising them proactively from a position of strength. A CFO builds a regular pricing review into the calendar — checking cost inputs, margin trends, and market positioning at least annually — so pricing evolves with the business instead of playing catch-up to it.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

Pricing isn't something you set once and forget. It's a financial decision that deserves the same rigor as any other line on your P&L. Know your costs, understand the market, price for the value you deliver — and revisit it before you're forced to. The businesses that price with intention are the ones that grow profit, not just revenue.

Setting your prices isn't just a market guess—it's the difference between knowing your business is actually profitable and mistaking top-line revenue for healthy margins. L.V. Browne, CPA, helps business owners and leadership teams evaluate their pricing with the same clarity a CFO brings, so every price reflects your true costs, value delivered, and long-term profit goals, not just competitor rates. Ready to build a sustainable pricing strategy for your business? Contact our team at [email protected] or send us a message to schedule a consultation today.

09/19/2026

Every big decision in a nonprofit comes with a quiet question underneath: can we actually spend this money? A new program, a critical hire, or an unexpected operational cost—the cash in the bank account might be easy to see. What’s harder to see, without looking at your net assets, is whether those dollars are actually available or tied up by donor restrictions. 📊

Most leaders and board members make financial calls based on overall cash on hand or total net assets. Experienced CFOs, auditors, and effective boards look closer at the split between restricted and unrestricted net assets first to understand the true financial flexibility of the organization.

We share why understanding your net asset categories before executing major decisions is a critical strategic imperative—and how knowing your unrestricted balance protects your mission, prevents compliance missteps, and gives you complete confidence in your growth.

Read below for the full breakdown.

𝐑𝐞𝐚𝐝𝐢𝐧𝐠 𝐚 𝐍𝐨𝐧𝐩𝐫𝐨𝐟𝐢𝐭 𝐁𝐚𝐥𝐚𝐧𝐜𝐞 𝐒𝐡𝐞𝐞𝐭: 𝐍𝐞𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 𝐖𝐢𝐭𝐡 𝐚𝐧𝐝 𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐃𝐨𝐧𝐨𝐫 𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐢𝐨𝐧𝐬

For-profit balance sheets have a simple bottom line: equity. What's left after liabilities are subtracted from assets belongs to the owners, period. Nonprofit balance sheets — technically called a Statement of Financial Position — work differently, because there are no owners. What's left over doesn't belong to anyone personally; it belongs to the mission. And that "what's left over" section, called net assets, is where a lot of nonprofit leaders and board members lose the thread.

Understanding net assets isn't just an accounting exercise. It's the difference between knowing what your organization can actually spend right now and mistakenly thinking money is available when it isn't.

𝐀𝐬𝐬𝐞𝐭𝐬 𝐚𝐧𝐝 𝐋𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬 𝐋𝐨𝐨𝐤 𝐅𝐚𝐦𝐢𝐥𝐢𝐚𝐫 — 𝐍𝐞𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 𝐃𝐨𝐧'𝐭

The top portion of a nonprofit balance sheet looks a lot like a for-profit one: cash, receivables, and other assets at the top; accounts payable, loans, and other obligations as liabilities. The difference shows up at the bottom. Instead of one equity number, nonprofit accounting standards require net assets to be split into two categories: without donor restrictions and with donor restrictions. That split exists for one reason — to protect donor intent and to make sure leadership and the board can't accidentally treat restricted money as general operating cash.

𝐍𝐞𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 𝐖𝐢𝐭𝐡𝐨𝐮𝐭 𝐃𝐨𝐧𝐨𝐫 𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐢𝐨𝐧𝐬 — 𝐘𝐨𝐮𝐫 𝐓𝐫𝐮𝐞 𝐅𝐥𝐞𝐱𝐢𝐛𝐢𝐥𝐢𝐭𝐲

This is the closest thing a nonprofit has to "money we can use for anything mission-related, right now." It includes general operating funds, unrestricted donations, and any board-designated reserves (which, importantly, the board itself can redesignate if needed — that's a key difference from donor restrictions). A CFO watches this number closely, because it's the real measure of financial flexibility. An organization can look financially healthy on total assets alone while having almost nothing in unrestricted net assets — which means very little actual breathing room if an unexpected expense or funding gap shows up.

𝐍𝐞𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 𝐖𝐢𝐭𝐡 𝐃𝐨𝐧𝐨𝐫 𝐑𝐞𝐬𝐭𝐫𝐢𝐜𝐭𝐢𝐨𝐧𝐬 — 𝐂𝐨𝐦𝐦𝐢𝐭𝐭𝐞𝐝, 𝐍𝐨𝐭 𝐀𝐯𝐚𝐢𝐥𝐚𝐛𝐥𝐞

This category holds funds a donor has specifically earmarked — for a program, a time period, or a purpose defined at the time of the gift. These dollars might sit in the same bank account as everything else, but they are not available for general use, no matter how tight cash flow gets elsewhere. This is where nonprofits get into serious trouble: treating restricted funds as a flexible cushion because the cash is technically sitting there. A CFO and a well-informed board never confuse "we have the cash" with "we're allowed to spend the cash."

Once the restriction is satisfied and the program is delivered, the time period passes, those funds are released and reclassified as without donor restrictions. That release shows up on the financial statements too, and it's worth understanding rather than skipping past.

𝐖𝐡𝐲 𝐓𝐡𝐢𝐬 𝐒𝐩𝐥𝐢𝐭 𝐌𝐚𝐭𝐭𝐞𝐫𝐬 𝐌𝐨𝐫𝐞 𝐓𝐡𝐚𝐧 𝐭𝐡𝐞 𝐓𝐨𝐭𝐚𝐥

Two organizations can show identical total net assets and be in completely different financial positions. One might have most of that total in flexible, unrestricted funds. The other might have almost all of it tied up in restricted grants for specific programs, with almost nothing available if a general expense comes up unexpectedly. The total tells you very little on its own. The split tells you the real story.

𝐓𝐡𝐞 𝐁𝐨𝐭𝐭𝐨𝐦 𝐋𝐢𝐧𝐞

Net assets aren't just a line item to skim past on the way to the bottom of the balance sheet — they're a direct reflection of how much true financial flexibility your organization actually has. Boards and leadership who understand the difference between restricted and unrestricted net assets make better decisions, avoid compliance missteps, and know accurately what they can and can't rely on when the unexpected happens.

Understanding your net assets isn't just a compliance detail — it's the difference between knowing what your organization can actually spend and mistaking restricted funds for flexible cash. L.V. Browne, CPA helps nonprofit leaders and boards read their financials with the same clarity a CFO brings, so every decision reflects what's truly available, not just what's on the balance sheet. Ready to get a clearer picture of your organization's financial position? Reach out to our team at [email protected] or message us to schedule a consultation today.

L. V. Browne, CPA

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