You Did the Fund Audit (Whew!) — Now What?

You’ve just completed a fund audit; congratulations! That’s no small feat. If you’re like most people, it took months (if not a year) to pull records, review reports, check them against donor intent, and finally document your findings. You might be feeling a mix of relief, exhaustion, and a nagging question: Now what do we do with this audit?

A fund audit is not just about accuracy or compliance. It’s about restoring and reinforcing trust—both internally and with your donors. It ensures every dollar given in good faith is honored, put to work, and aligned with your mission. Completing the audit gives you clarity. What you do next determines whether that clarity leads to deeper donor confidence or missed opportunities.

Inform Your Leadership Early and Often

Before you dive into the donor-facing or operational follow-ups, it’s essential you keep your leadership team informed. The fund audit may reveal powerful success stories, but it could also highlight risks, such as compliance gaps or donor neglect. Your leaders need to be looped in early.

Use this as an opportunity to elevate donor relations as a strategic function within your organization. Don’t just share the data—share the meaning behind it. Present themes, examples, and recommendations tied directly to your mission and current strategy. The more leadership understands the value of this audit, the more likely you are to secure support for fixing what’s broken, resourcing what’s working, and stewarding donors more effectively moving forward.

Even better, a leadership-informed audit helps your organization stay ahead of media scrutiny, IRS guidelines, and donor concerns, all while reinforcing a culture of transparency and trust.

Set Priorities Based on What You Found

The first step after completing your audit is to extract the key issues identified. Did you find underspent or stagnant funds? Was donor intent unclear or impossible to fulfill? Did you uncover missing documentation or inconsistent spending practices? These themes are not just administrative footnotes; they are signs of opportunities (and vulnerabilities) in your donor experience.

Don’t wait to act. Rank the issues by urgency and impact, then work with your partners to assign internal ownership. Turning audit findings into clearly defined action areas will help you avoid that all-too-familiar trap: letting insights sit idle because no one knows what to do next.

Address Unspent and Underspent Funds

The most urgent red flag an audit raises is the presence of unspent or underutilized funds. These silent, growing balances aren’t just bad optics—they undermine donor trust. Donors don’t give in order to have their money sit in a rainy-day fund. They give to make a difference in our organization. If they learn their gift hasn’t been used in years, they may not give again.

Now is the time to triage. Identify funds that haven’t been touched in 24 months or more. Partner with finance and fund managers to develop spending plans aligned with donor intent. If outdated or overly narrow restrictions are the barrier, work with the donor or your legal team to explore options for modification. Use tools like cy pres, meaning as near as possible, or amendments. Transparency matters more than perfection.

Clarify and Document Donor Intent

Another common issue is incomplete or unclear donor intent. If your audit revealed vague or conflicting fund criteria, don’t leave that ambiguity unresolved. Without clear documentation, one cannot confidently use a fund, which means we can’t confidently steward a donor. If we can’t clearly articulate what a fund supports, consider how it sounds to a donor.

Gather all existing documentation, from gift agreements to donor correspondence. If needed, reach out to gift officers or donors to confirm expectations. The goal is not only to ensure compliance but also position your organization to discuss the fund with confidence and clarity—internally and externally.

Revisit Spending and Compliance Policies

Your fund audit likely exposed friction points or inconsistencies in your organization’s policies. Maybe your spending rules are unclear. Maybe your investment draw schedule doesn’t align with program needs. Or maybe there’s confusion about who actually owns fund oversight.

Now is the time to update your policies. Clarify who’s responsible for what. Codify processes for fund review, documentation, spending, and stewardship. If you don’t have formal guidelines on how to manage endowed or restricted funds, create them. And if you do, make sure they reflect your actual practices, not just your aspirational ones. Do you need some inspiration around policies? Check out our sample library! 

No policy is effective without proper education. Policies gather dust if we don’t actively inform people about them. Once policies are finalized, it’s crucial to spread awareness widely. Our partners might be tired of hearing about these policies, but their fatigue indicates we've communicated effectively.

Additionally, make education an annual requirement once policies are approved. Staff turnover is constant, and ongoing education is essential since learning is never a one-time event.

Strengthen Internal Collaboration

A successful fund audit requires collaboration, and so does the follow-through. If your audit highlighted breakdowns between departments, this is your cue to rebuild those bridges. Donor relations, finance, advancement services, gift officers, and program staff all have a role in fund compliance. Make sure everyone understands how the funds work and their own individual role in managing them effectively.

Once your audit is complete, don’t keep the findings siloed within donor relations or finance. Host a cross-functional post-audit debrief that includes finance, advancement services, development officers, scholarship coordinators, program leads, and anyone else who touches or manages donor-funded programs. Use this time to walk through key themes: what’s working, where the gaps are, and what needs immediate attention. Don’t just share the problems, share the opportunities, too. Are there funds that could be featured in future appeals? Are there programs that have finally spent down a large balance and now have a great impact story to tell?

From there, assign specific follow-up items with deadlines and responsible parties. Be clear about who owns what, whether it’s updating documentation, drafting donor outreach, or developing new spending strategies. Fund management isn’t a once-a-year task; it should be a standing part of your team’s operational rhythm. Build it into your monthly or quarterly check-ins. The more you normalize these conversations, the more proactive—and less painful—your future audits will be. Making fund health a shared responsibility builds both internal accountability and external trust.

Build a Stewardship Plan for Each Fund

Here’s where the magic happens: turning the audit into a donor experience upgrade. For every active fund, ask: when was the last time we shared an update with the donors? What have we reported, celebrated, or thanked them for? What story can we tell today?

Create or refine stewardship plans that match the nature of the fund. Many of us have our scholarship impact in a good routine. However, larger funds, such as Professorships or research-supporting program funds, typically receive little to no impact updates. Consider personalized updates or impact stories. For pooled or anonymous funds, share program-level outcomes that illustrate the donor’s collective impact. Don’t just focus on the financials—focus on the transformation made possible by the gift.

Communicate Transparently

Contrary to popular belief, donors don’t expect perfection. They do expect honesty. If your audit uncovered problems, share how you’re fixing them! Use your newsletter, website, or donor reports to highlight your commitment to honoring donor intent and activating every gift. You can share stories about how underspent funds are now making an impact, or how clarifying fund criteria has finally enabled a gift to be put to use.

Transparency builds trust. And trust builds long-term generosity.

Plan for Ongoing Monitoring

Audits should become a built-in part of your organization’s annual rhythm. But that doesn’t mean you need to audit every fund every year. Once you’ve completed an organization-wide audit, shift into a rotating review model for the next three to five years. Each year, select a specific subset of your funds—perhaps based on fund type, age, balance size, or donor engagement level—and audit just those.

This ensures no funds go too long without a check-in, and it keeps the work manageable for your team.

This approach allows for constant refinement. Your policies stay up to date because they’re reviewed regularly. Trends and red flags can be spotted earlier. And you’re building a culture of proactive stewardship rather than reactive fire drills.

To support this ongoing process, integrate fund reviews into your calendar by scheduling time for the annual review. Track key metrics like spending rates, balance growth or stagnation, and donor touchpoints. Establish “trigger points” that alert you when a fund needs attention. For example, if it hasn’t been spent in 12 months, this fund is on next year’s short list to monitor and, if needed, work with the fund manager to develop a spending plan. These proactive guardrails will help you stay ahead of potential issues and ensure every fund stays aligned with donor intent and organizational priorities.

Use Your Findings to Fuel Fundraising

Finally, use what you learned to inform your fundraising strategy. The audit likely identified high-value donors who haven’t heard from you in years, or areas with limited donor support. It may have revealed funds that could serve as great case studies in future solicitations. And it has definitely given you credibility with donors, as you can now demonstrate that you take their gifts seriously.

Demonstrate to your donors that stewardship goes beyond simple gratitude; it’s a foundation built on trust, transparency, and results. Turn your fund audit into a narrative of donor respect and organizational responsibility. While it might not be the most glamorous story for attracting donations, it is the kind that fosters ongoing giving.

The Bottom Line

Completing a fund audit is an achievement. But it’s not the end of the road—it’s the beginning of something better. The audit gives you the data, but the real impact comes from what you do next. Fix what’s broken. Celebrate what’s working. And above all, keep your donors at the center of the story.

Because at the end of the day, your audit isn’t just about funds. It’s about people. It’s about trust. And it’s about making generosity count.

Written by Liz Menne