Many, upon joining a nonprofit board, assume the organization is sound financial plan and even financially resilient for the next few years of board tenure (unless we have joined an organization knowing it was distressed). As a board member, you may not know how to assess whether an organization is financially resilient, yet you can see from the outside that the organization is well supported. You might even do more Read More
Is your nonprofit financially resilient? Take a Nonprofit Financial Plan X-ray.
Is your nonprofit financially resilient? Can it survive the onslaught of crises after crises and still fulfill its philanthropic mission? Are its funding needs matching its funding sources? Or does it fight for survival every time an unexpected, external event occurs? While assessing true resilience requires a deep dive into an organization’s financials, program operations and administrative policies and procedures, Read More
Three Questions to Optimize Nonprofit Cash Reserves
“We have cash sloshing all over the place.” That is how a nonprofit leader described the state of her organization’s cash reserves. While this might sound like a dream come true, nonprofits that rely on grants and major gifts that arrive with irregular timing often find themselves wrestling with the labyrinthine exercise of mapping numerous pots of cash to operations and programs as required. If a nonprofit is Read More
Predicting Nonprofit Financial Resilience
They were flying the Cessna outside of Fairbanks, Alaska, so the story goes. Richard was training for his Instrument Flying Rules (IFR) test, certifying him to fly in poor visibility such as clouds, fog, rain or dust. My father, an experienced recreational pilot and already instrument rated, flew as co-pilot to help his friend prepare. Richard was wearing the standard IFR hood that covered his eyes from the Read More
The Ideal Nonprofit Lifeline: An Unrestricted Restricted Gift
A Development Officer friend of mine called me with a strange request. Could I please help an nonprofit Executive Director decide what to do with a six-figure donation? It’s not often nonprofit leaders don’t know what to do with a large gift. But this gift had a unique restriction. The money must be allocated to an account reserved for emergencies or unplanned incidents, whatever they may be; an unrestricted, Read More
Help a Nonprofit Hit a Homerun: The Case for Unrestricted Donations
Heather used to display a baseball bat proudly in her office cubicle. She was hardly the sporting type, so I finally asked her about it. She explained she’d been awarded the bat, along with a monetary bonus, by participating in a company program called “Homerun” that challenged back-office staff to demonstrate how a weakness in their department could lead to poor client service. Those who effectively proved the case Read More
5-Point Emergency Reserve Check for Nonprofits
A question nonprofit leaders constantly ask us is: How much does our nonprofit need in emergency reserves? This question now has been brought into greater focus in light of the coronavirus pandemic. But the answer isn’t straightforward. How much a nonprofit needs on hand for emergencies is dependent on its risk profile. Risk profile is the organization’s ability and willingness to take chances that could lead to Read More
Afraid to Talk About Money?
Sharing our financial challenges and insecurities can bring relief and ideas on how to take control of our financial futures. Many of us were taught as children and young adults not to talk about money. “It’s vulgar,” our parents would say, or “That’s rude to ask someone what they make or how much their house costs.” Instead we ruminate in private about these things, slyly looking up our friends’ houses on Zillow Read More
Checklist for Surviving a Broken Economy
We asked Brit Summerill, Partner with NOW CFO what lessons CFOs learned from the last recession. Here are a few things organizations need to do to start protecting themselves. Cash Flow Forecasting 13-week projection of the company’s available cash. Operational cost forecasting by week for the quarter—inventory, fixed costs, variable costs, payroll, etc. Establish Break-Even Point What is the minimum revenue Read More
4 Budget Rules for the 21st Century
For organizations managing to a calendar year, January told you how effective you were as a financial forecaster. Did it bring good news or bad? Is it what you expected? Does one month even matter? How organizations develop and use budgets has changed over the past decade and it’s essential that leadership reflect the new thinking toward financial strength. Twelve Month Budgets Are Arbitrary An annual budget is a Read More
