webinar: financial management - dashboard overview
TRANSCRIPT
UNDERSTANDING A NON-PROFIT’S FINANCIAL TRENDS AND HEALTH EPIP Webinar - July 13, 2016 EPIP Host: Biz Ghormley Presenters: Polly Singh, John Summers, Hilda Polanco, Nicole Kyauk
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Emerging Practitioners in Philanthropy (EPIP) is a national network of foundation professionals, social entrepreneurs and other change makers who strive for excellence in the practice of philanthropy.
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We provide a platform for our community to:
Connect with others
Learn & practice
leadership skills
Inspire emerging ideas in the social sector
Get in touch! Please reach out with any questions or to learn more about membership!
Biz Ghormley [email protected]
Director of Operations & Member Services
What’s Next? • Next EPIP Webinar! • Race and Justice in the Climate Movement –
July 27 at 3pm ET
• All Events • epip.org/events
• EPIP Annual Conference • September 13-15, 2016 in Baltimore, MD • http://www.epip.org/2016_national_conference
Housekeeping • Use the question box for
• Technical difficulties
• Comments
• Content questions for Q&A
• Polls and questions are anonymous
• Use #EPIPwebinar to join the conversation on social media
• This webinar will be recorded
• Complete the post-webinar survey, please!
Speakers Polly Singh, Program Officer, Wallace Foundation Hilda Polanco, CEO & Founder, FMA John Summers, Director of Consulting, FMA Nicole Kyauk, Sr. Program Officer, East Bay Community Foundation
Nonprofit Financial Health: An Assessment Tool
Hilda Polanco, CPA, Founder and CEO John Summers, Director of Consulting
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Why This Tool?
• Provides an efficient, user-friendly method of assessing a nonprofit’s financial health
• Helps understand and address risks inherent in grantmaking
Provide an accessible way to understand a nonprofit’s financial health and facilitate more constructive conversations between funders and grantees
Goal of the Tool:
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Operating Results
1. What are the organization’s trends in operating results? – Surpluses or deficits
– Mix of revenue sources
2. How is the organization investing its resources?
Net Assets
3. How liquid are the organization’s reserves?
4. What is the composition of net assets?
Cash on Hand
5. What is the organization’s cash position?
2016 2015
Unrest Temp Unrest Temp
Income 315 100 35 30
Released from Restriction 70 (70) 70 (70)
Total Revenue 385 30 105 (40)
Expenses 245 215
Change in Net Assets 140 30 (110) (40)
Beginning Net Assets 15 5 125 45
Ending Net Assets 155 35 15 5
Statement of Functional Expenses
Statement of Activities Statement of Financial Position
Statement of Cash Flows
Audited Financial Statements: How the Numbers Flow
2016 2015
Cash Flows from:
Operations 230 205
Investing (30) 15
Financing (30) (200)
Change in Cash 170 20
Beginning Cash 30 10
Ending Cash 200 30
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2016 2015
Assets 200 30
Liabilities 10 10
Unrestricted Net Assets 155 15
Restricted Net Assets 35 5
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2016 Program M&G Fundraising Total Personnel 90 30 20 140 OTPS 70 20 15 105 Total 160 50 35 245
2015 Program M&G Fundraising Total Personnel 90 25 15 130 OTPS 40 30 15 85 Total 130 55 30 215
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Statement of Activities: Operating Results
Operating Results
Unrestricted Revenue – Total Expenses
Indicator Calculation
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Statement of Functional Expenses: Resource Allocations
Functional Expense Composition
Program Expense
Total Expenses
General & Administrative Expense
Total Expenses
Fundraising Expense
Total Expenses
Indicator Calculation
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Liquid Unrestricted Net Assets (LUNA)
LUNA = Unrestricted Net Assets – Net Fixed Assets + Mortgages
• The portion of unrestricted net assets that could be converted to cash relatively easily
• Funds available for purposes such as supplying working capital, guarding against downturns, and pursuing new opportunities
Benchmark: LUNA sufficient to cover 3-6 months of operating expenses is generally considered healthy, but this depends on an organization’s business model, plans, and goals.
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Months of Liquid Unrestricted Net
Assets
Liquid Unrestricted Net Assets
Average Monthly Expense
Balance Sheet: Liquid Unrestricted Net Assets (LUNA)
Indicator Calculation
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Net Asset Composition
Unrestricted / Temporarily Restricted /
Permanently Restricted Net Assets
Total Net Assets
Balance Sheet: Net Asset Composition
Indicator Calculation
LUNA / Working Capital
Temp. Restricted Net Assets *
Facility Reserve
Debt Repayment
Growth & Innovation
Endowment **
Longer-term Reserves (may be board designated)
Donor restricted capital
Short-term Liquid Capital
* To be accessed only if delivering on donor expectations ** Only earnings are accessible
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Months of Cash on Hand
Total Cash and Cash Equivalents
Average Monthly Expense
Balance Sheet: Months of Cash on Hand
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Indicator Calculation
NICOLE KYAUK, CHARTERED ADVISOR IN PHILANTHROPY® |
SENIOR PROGRAM OFFICER
E A S T B A Y C O M M U N I T Y F O U N D A T I O N
Financial Planning – Budget development – Revenue projections – Cash flow
Financial Monitoring
– Monthly reports – Year-end forecasts – Decision-making meetings
Financial Operations – Staff capacity – Accounting software – Processes and workflow
Governance over Finance
– Board awareness – Policies and procedures – Reserves and risk management – Audits and compliance
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Online Tutorials for StrongNonprofits.org
FMA offers complimentary orientation one-hour webinars that feature an overview of the website and drill down on several of its key resources
Upcoming webinar dates:
• September 22, 2016 at 1:30pm
• November 29, 2016 at 2:00pm
To register, or see upcoming webinar dates: http://fmaonline.net/strongnonprofits For a 15-minute, on-demand tour of the site: http://fmaonline.net/SNPonDemand
QUESTIONS ?
• Established in 1999 to serve not-for-profit organizations around the country
• Provides customized financial management, accounting, software, organizational development, human resources, and other consulting services
• Works directly with organizations or through funder-supported management and technical assistance programs
FMA's mission is to empower not-for-profit organizations with the knowledge and skills to successfully serve their constituents and fulfill their missions
Hilda Polanco, CPA, CCSA®, CGMA [email protected]
212-931-9240
440 Park Ave South, 3rd Floor New York, NY 10016
www.fmaonline.net
John Summers [email protected]
212-931-9133