Funding Growth. Janet Ogden-Brackett, Nonprofits Assistance Fund Ann Fahy-Gust, Rochester Area Foundation. Rochester, MN May 1, 2014

Transcription

1 Funding Growth Janet Ogden-Brackett, Nonprofits Assistance Fund Ann Fahy-Gust, Rochester Area Foundation Rochester, MN May 1, 2014

2 Goals for Today s Session Planning and management tools for growing organizations: Cash flow projections Reserves Revenue mix Forecasting and scenario planning How do nonprofits use debt?

3 CC BY-NC nicholasjon: Understanding Cash Flow

4 Cash Flow Projection vs. Budget Cash flow planning begins with a realistic budget Cash flow does not relate to fiscal or calendar years Do NOT include non-cash income and expenses (in-kind contributions, depreciation, amortization loan payments) DO include all cash receipts and disbursements

5 Cash Flow Based on Accurate Assumptions

6 Cash Flow Based on Accurate Assumptions

7 Cash Management Strategies Use reserves as an internal line of credit CC BY-NC-ND caribbeanfreephoto:

8 Keep in Mind Frequency Level of detail Assumptions Responsibility to maintain Management use Board use CC BY-SA Nomadic Lass:

9 Download Resources Cash flow template The Yin & Yang of Operating Reserves: What You Need to Know Reserve policy template

10 CC BY-SA Thirteen Of Clubs: Revenue Mix

11 Revenue Mix Income Earned income Individual contributions Grants

12 Revenue Archetypes Earned income Individual supporters Grant funding Government funding

13 Revenue Driver: Earned Income Common challenges Knowledge of market Changing demand and interests Visibility with target market Competitive advantage Pricing and costs Focus areas Excellence in delivery Reputation Marketing Knowledge of target market Responsiveness to changes

14 Revenue Driver: Individual Support Common challenges Reputation Visibility Capacity to develop and maintain relationships Knowledge of donors Maintaining data Focus areas Communications Storytelling Constant marketing Relationship development capacity Volunteers and advocates Information systems

15 Revenue Driver: Grant Funding Common challenges Relationships Visibility and reputation Balancing multiple goals Cyclical opportunities Focus areas Relationship development capacity Innovation and adaptability Cash reserves

16 Revenue Driver: Government Funding Common challenges Maintaining political relationships Community visibility and reputation Slow decision making Reporting and compliance Focus areas Maintaining multiple relationships Close attention to authorizing environment Careful compliance Cash reserves

17 Forecasting and Scenario Planning CC BY-ND IanP.:

18 Forecasts and Assumptions Start with program and organizational goals Assess history and capacity What will stay the same? What will be different? How will we implement? What needs to happen next? CC BY eddie.welker:

19 Forecasting Expenses What expenses are needed to accomplish program and organizational goals? Example: Community choir goals Pay all artists Increase audience for local concerts Tour every third year Maintain current size of education program Shift contracted fundraising to part-time staff

20 Forecasting Expenses

21 Forecasting Income What income can be expected based on program plans, opportunity, and capacity? Example: Community choir goals Increase audience for local concerts Education program is at or near capacity Touring supported by fees and project grants Additional fundraising capacity on staff will be productive

22 Forecasting Income

23 Download: Scenario Planning Resource Scenario Planning Example Scenario Planning Template 32

24 Questions to Ask Do we understand our cash flow? Do we have a reserve policy in place? What is our dominant revenue type? What are our challenges and required focus to generate our dominant revenue type? What is our financial forecast? Can we identify different income and expense scenarios?

25 Using Debt CC BY-NC-SA zsrlibrary: To purchase a productive asset.

26 Using Debt CC BY Dusso Janladde: To smooth out predictable cash cycles.

27 Using Debt To grow an established product or service.

28 Using Debt To incubate or launch a new enterprise.

29 Using Debt CC BY-NC-SA MTSOfan: To recover from a problem and buy time to implement a viable plan.

30 Sources of Debt Capital Commercial banks Government programs Industry-specific lenders Social lenders (CDFIs) Foundations (PRIs) Partners and supporters

31 Thank You! Nonprofits Assistance Fund