Reading a Nonprofit's Financials Like a Grant Reviewer Does
Program staff frequently write the narrative half of a proposal and hand the numbers to finance as an afterthought. Reviewers read it in the opposite order — the budget is often the first place they look for whether an organization can be trusted to manage the grant at all.
Three ratios worth checking before you submit
Program expense ratio, months of operating reserve, and the trend (not just the value) of unrestricted net assets over three years. A single strong year means less than a stable or improving trend, because reviewers are underwriting continuity, not a snapshot.
“A budget narrative that explains the one number a reviewer will question is worth more than a budget with no weaknesses at all — because every real budget has one.”
The narrative question funders are really asking
Underneath every financial ratio is one question: if this grant ended tomorrow, would the organization still be standing? Proposals that answer that directly, even briefly, read as more credible than ones that avoid it entirely.
Watch: nonprofit financial ratios explained
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