Tagged nonprofit finances
What the heck should the board’s finance update include?
Here’s what I’d like a finance report to tell me:
Are our revenues and expenses tracking as we expected?
If not, how far off are they and why?
Is there any risk that we might hit a time we can’t pay the bills? What are we going to do about that?
Are we meeting our spending obligations for restricted dollars?
Is restricted income hiding shortfalls in operating income?
Is there any new, unanticipated expense that could throw our budget out of whack? What are we going to do about that?
Where do we expect to be at the end of the year?
What should/could we do today to correct our financial position if the year end isn’t looking so good?
Rethinking the finance committee
But what if instead of these solely fiduciary roles, the Finance Committee also facilitated strategic thinking within the Board about the short and long-term financial condition of the organization by: developing a deeper financial analysis of organizational health, developing financial literacy among the directors, analyzing trends, preparing long-term financial forecasts based on different strategic scenarios, bringing strategic financial issues to the attention of the board for discussion and planning
and leading the discussion on key performance indicators for the Board and then revising financial reports accordingly
Social Impact Bonds versus social impact
The fundamental problem with SIB-mania is this: truly transformative social innovation isn’t profitable.
From one moment to the next one
But in the midst of all this interesting analysis, tucked away under a box four pages into the study, was the sentence that left me speechless:
“Financial vibrancy is the capacity of an organization to make the transition from one sustainable moment to the next.” I experienced a moment of ultimate clarity, marveling at the purity, the honesty of that statement.
Ten questions to ask before the board approves the budget
Does your board know what questions to ask before it approves the annual budget? Here’s a list to get you started. 1. Does our spending align with our program and operational priorities? 8. Are we confident in the probability of projected revenues — enough to approve the requested level of expenditures?
Are most nonprofits in bad financial shape?
In my book, any nonprofit that has lasted for 20 to 150 years and continues to achieve important societal outcomes, while nimbly executing on a measly budget (by report standards) of a cool $1-5 million without accumulating debt, is doing pretty well and shouldn’t feel that it hasn’t worked out a viable financial model.