The Walls Project Completes Its First Independent Audit

It might sound strange to some, but we were genuinely excited to complete our first-ever independent audit for Fiscal Year 2025. This milestone was triggered when we surpassed the federal threshold of $750,000 in government funding, requiring us to undergo a formal financial review. In the nonprofit world, this places us in a category of organizations that are delivering large-scale impact while being held to the highest standards of accountability.

We have been preparing for this moment for years. Our CEO completed formal coursework in nonprofit financial management. Our CFO brought deep audit and nonprofit experience to help implement rigorous systems, with continued oversight and support from our board. The result was a completely clean audit with no findings, no internal control issues, and no compliance concerns. As someone who spent five years conducting audits, I can say with confidence that this is a major achievement and a true reflection of the team's hard work.

Why This Matters

This audit is not just about compliance. It represents our values of integrity, transparency, and a commitment to investing every dollar where it has the greatest impact: in the communities we serve.

Fiscal Year 2025 Audit Highlights

1. Net reserves increased by approximately $39,685

2. Revenue grew by 96 percent compared to the previous year

3. First audit found no instances of noncompliance or control deficiencies

4. Private donations decreased by 32 percent from individual donors

   
   

Our Growth Since 2020

The Walls Project has grown by an incredible 616 percent since Fiscal Year 2020.

1. In FY2021, we doubled our revenue within 12 months

2. In FY2022, we launched full-time programming in Dallas

3. In FY2023, we expanded into Colorado while focusing on internal stabilization

4. In FY2024, we received a major USDA grant that required us to prepare for this audit

5. In FY2025, we experienced our largest growth yet with a 96 percent increase in revenue

   
   

However, this graph tells two different stories about revenue. On one hand, you can see our overall revenue growing significantly year after year. On the other, our private donations have remained relatively flat and even declined in Fiscal Year 2025 compared to previous years. The Walls Project has historically struggled to raise contributions from individuals, board members, and donor-advised fund holders. We believe this is largely due to our longstanding practice of not actively asking for donations. Because our work is rooted in communities that need investment, we have avoided making funding appeals to the very residents we aim to support.

To become a truly sustainable organization, we must shift this approach and begin building a strong base of private philanthropy, monthly recurring donors, and annual giving campaigns. The future of our long-term impact depends on it. Below is a chart of our annual donations over the same period. These contributions include major donors giving over $2,500 in a year, one-time donations, recurring monthly gifts, and board member contributions. In 2022, The Walls Project marked its 10th anniversary with a fundraising event and the launch of a recurring donor campaign. As a result, donations more than tripled from the prior year. But since then, donor engagement has declined. Strengthening this part of our organization may be one of the most critical challenges we face.

You’re probably asking, “Why are donations so important if the organization is growing so much?”

The answer is simple. In order for The Walls Project to meet its ongoing cash needs—whether for vendor payments, payroll, or day-to-day operations—we need unrestricted support from donors and investors. Unrestricted dollars are the lifeblood of any nonprofit, especially one as ambitious and active as ours.

The truth is, it’s expensive to be cash poor. While we excel at launching high-impact programs, securing partnerships, and finding creative ways to serve our communities, most of the funding we receive from foundations and service contracts is restricted to specific uses. Donations help fill the critical gaps. In Fiscal Year 2025, only 1 percent of our budget came from private donations. Sponsorships for volunteer events made up another 3 percent. Contracts for services brought in 19 percent, and 8 percent came through in-kind support from government and professional partners. The remaining revenue came from foundation and government grants.

To build a sustainable future, we must increase the share of support that is flexible, responsive, and rooted in community investment.

What it Will Take to Become a Sustainable Organization and Our Internal Benchmarks for FY2026 and Beyond

After nearly two decades in the nonprofit sector, I’ve learned that financial sustainability begins with clarity. Every organization must decide what its ideal revenue mix should be. The 80/20 rule is a useful guide: an organization should aim for either 80 percent of its revenue from government and foundation grants and 20 percent from unrestricted donations, or the reverse.

Historically, The Walls Project has operated with 96 to 99 percent of its revenue coming from grants and contracts. The remaining 1 to 4 percent has come from unrestricted sources. While we do generate some earned income through service contracts such as mural installations and garden maintenance, the margins on those projects are narrow. They often barely cover the staffing and coordination costs associated with delivering the work. As a nonprofit, this is expected—but it also highlights the need to grow our unrestricted funding.

To meet the moment and support our growth, we must increase private donor support across the communities we serve. That means cultivating monthly recurring donors, securing gifts from major donors and donor advised fund (DAF) holders, working more closely with wealth advisors, and integrating fundraising asks into our volunteer events.

If we have another year with revenue exceeding $3 million, we will need to grow our private fundraising from $47,000 to nearly $600,000. That sounds daunting until we break it into manageable parts. Based on our growth rate of 616 percent from 2020 to 2025, our new targets for FY2026 are:

1. Donor Advised Funds: $337,175

2. Major Donors (gifts over $2,500): $151,386

3. One-Time Donors: $78,835

4. Recurring Monthly Donors: $39,412

5. Board of Director Donations: $19,247

6. Total Donations Goal: $626,058

   
   

If you’ve made it this far, congratulations. Your reward is an inside joke: next time you see Casey Phillips, ask him why he hates musicals. Or better yet, surprise Dr. Ashlyn Harrison with a Diet Coke and a bag of Cheetos—her favorite breakfast.

All the best!

Tom Donley

Executive Director of Colorado and Chief Financial Officer

The Walls Project

225.241.8009

Thomas@thewallsproject.org

About Tom Donley

Tom Donley is a seasoned nonprofit finance executive with over 18 years of experience serving as a Chief Financial Officer and strategic advisor to local nonprofits and international NGOs. His expertise includes multi-year budgeting, federal grant compliance, nonprofit audit readiness, and financial system design. Throughout his career, he has stewarded organizations through periods of rapid growth and financial restructuring, including securing and managing complex funding streams from entities such as the USDA, Gates Foundation, and the European Commission. Known for implementing robust internal controls, aligning financial strategy with mission-driven goals, and fostering sustainable operations across diverse teams and geographies, Tom brings a deeply practical and globally informed approach to nonprofit fiscal leadership within The Walls Project.