Financial reporting for small nonprofits

Transcription

1

2 / /

3 / Financial reporting for small nonprofits /

4 [ Origin story ]

5 The Case for Numbers

6 Numbers help us make decisions

7 Unbiased

8 Unbiased Unemotional

9 Unbiased Unemotional Completely rational

10 Unbiased Unemotional Completely rational Totally transferable

11 Numbers tell a story

12 Well if numbers are so great then why does all of this have to be so complicated?

13 [ soap box ]

14 Nonprofits don t make any sense

15 Intentionally biased

16 Intentionally biased Super emotional

17 Intentionally biased Super emotional Not rational

18 Intentionally biased Super emotional Not rational Nontransferable

19 The Basics:

20 The Basics: What we already know

21 Cash

22 Cash Assets

23 Cash Assets Liabilities

24 Cash Assets Liabilities Income / Revenue

25 Cash Assets Liabilities Income / Revenue Expenses

26 Cash Assets Liabilities Income / Revenue Expenses Net assets

27 Cash Assets Liabilities Income / Revenue Expenses Retained earnings

28 Cash Assets Liabilities Income / Revenue Expenses Net assets

29 The Basics: Part II

30 The Basics: Part II The Statements

31 Balance Sheet

32 ( also called Statement of Financial Position )

33 Balance Sheet

34 Balance Sheet Statement showing current picture of financial situation

35 Balance Sheet Statement showing current picture of financial situation Cumulative as of a specific date

36 Balance Sheet ( as of a specific date ) Assets Liabilities Net assets

37 Balance Sheet as of June 30, 2018 Cash $500 Furniture 200 Total Assets $700 Debt $200 Net Income 300 Net Assets 200 Total Liab and Net Assets $700

38 Income Statement

39 ( also called Statement of Financial Activities )

40 Income Statement

41 Income Statement Statement showing revenues and expenses over a defined period

42 Income Statement Statement showing revenues and expenses over a defined period Live feed of financial situation

43 Income Statement ( start date through end date ) Revenues - Expenses = Net Income

44 Income Statement ( start date through end date ) Revenues - Expenses = Change in Net Assets

45 Income Statement July 1, 2017 June 30, 2018 Grants $900 Membership Dues 300 Total Revenues $1,200 Consultant Fees $700 Rent 200 Total Expenses $900 Net Income $300

46 Balance Sheet as of June 30, 2018 Cash $500 Furniture 200 Total Assets $700 Debt $200 Net Income 300 Net Assets 200 Total Liab and Net Assets $700

47 Some Wrenches

48 Class Financials

49 Class Financials Program Fundraising Management

50 Cash vs Accrual

51 Cash vs Accrual Cash: It counts when it s cash

52 Cash vs Accrual Cash: It counts when it s cash Accrual: It counts when it s earned

53 Cash vs Accrual Accrual Examples: Receivables Payables Depreciation Deferred Revenue

54 Tiny Opera House Cash Basis Financials

55 Restricted vs Unrestricted

56 Restricted = Can only be spent for a pre-determined purpose

57 Unrestricted = Free money

58 There are a lot more wrenches

59 Some Pro Moves

60 Reading Financials

61 Reading Financials It s the space between numbers that matters

62 Reading Financials It s the space between numbers that matters Where are there big changes? How fast are changes happening? How do numbers compare to each other?

63 Reading Financials Look at it in small chunks

64 Reading Financials Take it slow and practice

65 Preparing and Presenting Financials

66 Preparing and Presenting Financials Aesthetics are important how do your numbers look in space

67 Preparing and Presenting Financials Aesthetics are important. Wages $1, Wages $1,023 Rent $ Rent 650 Office Expense $ Office Expense 213 Insurance $ Insurance 110 Utilities $ Utilities 76 Other Expense $.35 Total $2,072 Total $2,072.41

68 Preparing and Presenting Financials Aesthetics are important. Wages $1, Wages $1,023 Rent $ Rent 650 Office Expense $ Office Expense 213 Insurance $ Insurance 110 Utilities $ Utilities 76 Other Expense $.35 Total $2,072 Total $2, % fewer characters

69 Preparing and Presenting Financials Aesthetics are important. Wages $1, Wages $1,023 Rent $ Rent 650 Office Expense $ Office Expense 213 Insurance $ Insurance 110 Utilities $ Utilities 76 Other Expense $.35 Total $2,072 Total $2, actually 47.5% fewer characters

70 Preparing and Presenting Financials Math is important make sure things add up

71 Preparing and Presenting Financials Allocate expenses for a more accurate picture

72 Preparing and Presenting Financials Consider the audience.

73 Preparing and Presenting Financials Consider the audience. How much detail do the need to see?

74 Preparing and Presenting Financials Consider the audience. Probably not as much as you think.

75 Preparing and Presenting Financials Consider the audience. What do you want them to focus on?

76 Preparing and Presenting Financials Example: We didn t raise as much money as last year

77 Preparing and Presenting Financials Example: We didn t raise as much money as last year Show current year vs prior year

78 Preparing and Presenting Financials Example: Board giving is behind projections

79 Preparing and Presenting Financials Example: Board giving is behind projections Line item for board giving vs budget total

80 Preparing and Presenting Financials Example: We have more money to spend on a certain program

81 Preparing and Presenting Financials Example: We have more money to spend on a certain program Comparative program financials

82 Preparing and Presenting Financials Example: We re too dependent on government grants

83 Preparing and Presenting Financials Example: We re too dependent on government grants Revenue by source with % of total column

84 Preparing and Presenting Financials Example: We re too dependent on government grants Maybe even an industry standard column

85 Preparing and Presenting Financials The board doesn t need to see all the detail

86 Preparing and Presenting Financials And there is a decent chance that they don t know as much about this as you think they do.

87 How Can Help

88 Webinars and workshops like this!

89 Templates and blog resources

90 Office hours and consultations

91 Tiny Opera House Forum

92 Our platform.

93 Next Week:

94 Next Week: Financial Management Part 2

95 Next Week: The Future - Allocations, Budgets, Cash Flow

96 Questions?

97 Thank you!

98 T. Hampton Dohrman