University of Colorado Denver School of Public Affairs PUAD 5140/7140: Nonprofit Financial Management Syllabus Term: Summer 2012 Instructor: Doug Gilbert, DBA, JD Office Address: Lawrence Street Center (1380 Lawrence Street) Office Hours: By Appointment Phone: 720-641-0155 Email: Douglas.Gilbert@ucdenver.edu
Table of Contents 1. Course overview... 1 1.1. Purpose... 1 1.2. Course Learning Outcomes... 1 2. Course Materials... 1 2.1. Required Texts:... 1 2.2. Additional Materials:... 1 3. Course Schedule... 2 3.1. Course Schedule... 2 3.2. Course Topics by Week... 2 4. Grading... 3 4.1. Course Grade Plan... 3 4.2. Grade Percentage Ranges... 3 4.3. Grading Feedback... 3 4.4. Assignment Rubrics... 3 5. Course Policies... 4 5.1. Attendance and Online Participation... 4 5.2. Assignment Due Dates / Late Work... 4 5.3. Special Accommodation... 4 5.4. Course Communication... 4 5.5. Writing and Behavioral Standards... 4 5.6. Assignment Lengths... 5 5.7. Academic Honesty... 5 5.8. Students called for military duty... 5 6. Assignments by Week... 6 Week 1: Introduction to nonprofit entities... 6 Week 2: Nonprofits: The fit of structure, mission, and finances... 7 Week 3: Nonprofit accounting structures and statements... 8 Week 4: Accounting and finance standards for nonprofits including Form 990... 9 Week 5: Budgeting basics: Structures, practices, and statements... 10 Week 6: Developing a nonprofit budget... 11 Week 7: Managing nonprofit revenue and expenses and the audit... 12 Week 8: Integrating finance into strategic nonprofit management... 13
1. COURSE OVERVIEW 1.1. Purpose Financial management is one of the core competencies of effective nonprofit managers. Every nonprofit organization needs money to sustain or advance its mission. This course provides a grounding in financial management for the non-accountant by focusing on an array of knowledge and management skill areas necessary for allocating and controlling resources and for analyzing, reporting and protecting the fiscal health of the organization. Topics include key accounting principles, understanding and using financial statements, the budget development process, cash flow analysis, banking relationships, using the audit report, maximizing investment policy and strategy, and understanding the boundaries of tax exemption. 1.2. Course Learning Outcomes By the end of the course, it is expected that each student will be able to: Understand the relationship between the types of nonprofit organization missions and financial management challenges and approaches. Describe the key interrelationships of organizational structure, mission, and financial management approaches for different types of nonprofit entities. Understand the process of forming a nonprofit, obtaining tax-exemption, 990 reporting requirements, and reasons for establishing investment policies. Identify and describe types of accounting and finance standards for nonprofits. Understand the financial management and governance role of the Chief Financial Officer, the Chief Executive Officer/Executive Director, the organization s Treasurer, and the Auditor. Demonstrate an understanding of various management tools, such as budgets, financial statements, and cash flow statements. Discuss and analyze approaches for improving the financial performance of a nonprofit organization. 2. COURSE MATERIALS 2.1. Required Texts: Bowman, W. (2011). Finance fundamentals for nonprofits. Hoboken, NJ: John Wiley & Sons. ISBN-10: 1118004515 ISBN-13: 978-1118004517. Dropkin, M, Halpin, J. & La Touche, B. (2007). The budget-building book for nonprofits: A step-by-step guide for managers and boards (2 nd ed). San Francisco: Josey-Bass. ISBN-10: 0787996033 ISBN-13: 978-0787996031 2.2. Additional Materials: Business Model Canvas in 2 Minutes (available at http://youtu.be/qoaozmtlp5s). Business Models Beyond Profit (available at http://goo.gl/gpczl). Business Model Social Venture Basics (available at http://goo.gl/5zaej or on ecollege). Business Model Canvas for Social Ventures (available at http://goo.gl/ddvj4 or on ecollege). Guidestar.org database. How to access Guidestar.org (available on the ecollege course site). IRS Publication 557 Principles for Good Governance and Ethical Practice (available at http://goo.gl/klijx) Page 1/13
July July June June 3. COURSE SCHEDULE 3.1. Course Schedule This course is eight (8) weeks in duration. Each week starts on Monday and concludes on Sunday. Assignments in the syllabus are provided by week. The dates for the weeks of the course are as follows: Week Mon Tues Wed Thu Fri Sat Sun 1 4 5 6 7 8 9 10 2 11 12 13 14 15 16 17 3 18 19 20 21 22 23 24 4 25 26 27 28 29 30 1 5 2 3 4 5 6 7 8 6 9 10 11 12 13 14 15 7 16 17 18 19 20 21 22 8 23 24 25 26 27 28 3.2. Course Topics by Week The following topics will be covered by week. Wk. Topic 1 Introduction to nonprofit entities 2 Nonprofits: The fit of structure, mission, and finances 3 Nonprofit accounting structures and statements 4 Accounting and finance standards for nonprofits including Form 990 5 Budgeting basics: Structures, practices, and statements 6 Developing a nonprofit budget 7 Managing nonprofit revenue and expenses and the audit 8 Integrating finance into strategic nonprofit management Additional information is available under each week s detailed assignment description later in this Syllabus. Page 2/13
4. GRADING 4.1. Course Grade Plan The course will rely on four types of assignments: weekly participation / reflection, analysis and review papers, financial budgets, and a board report. Rubrics for the assignments will be posted separately in the ecollege site. Weeks ASSIGNMENTS % Points (out of 1000) ALL Discussion / participation (2% per week) 16% 160 1 Nonprofit overview paper 7% 70 2 Structure, mission, and finances overview 7% 70 3 Financial statement review 10% 100 4 Nonprofit standards analysis 10% 100 5 Annual Budget Preparation Package 10% 100 6 Pro Forma Operating Budget 15% 150 7 Memo to the Board on Zero-Based Budgeting 15% 150 8 New Board Member On-Boarding Memo 10% 100 Total 100% 1000 4.2. Grade Percentage Ranges To earn an A in this course, you must complete superior work in all aspects of course material. To earn a B, your work must be deemed above average. Students who receive a C will be those whose work is considered average. Assignments and expectations for this course will be rigorous and you will be expected to complete work based on these expectations. Below is the grading scale that will be used in this course. 95-100% 90-94% 87-89% 83-86% 80-82% 77-79% 73-76% 70-72% 67-69% 63-66% 60-62% A A- B+ B B- C+ C C- D+ D D- F Partial points will be rounded up from 0.5 and downwards from less than 0.5. 4.3. Grading Feedback Below 60% Given the accelerated nature of this course, feedback will be provided on a weekly basis typically with a five to six day lag from the time the assignment is due. Grades on discussion and participation will be available typically three to four days after the due date of the assignment. All graded work and comments will be returned in the ecollege course system. 4.4. Assignment Rubrics Rubrics, depicting the nature of expectations for assignments, will be posted on the ecollege site for all written assignments. The rubric will be posted prior to the commencement of the week in which the assignment is due. Graded work will be returned with a copy of the rubric included. Page 3/13
5. COURSE POLICIES 5.1. Attendance and Online Participation Online class discussions and exercises are an important part of learning. Class attendance, measured by at least one post per week in the ecollege online classroom, is required for all weeks. Attendance by itself does not ensure participation credit. Participation each week is a credit-bearing activity. Maximum points will be earned by fully answering all discussion questions each week and participating in the discussions of others answers. 5.2. Assignment Due Dates / Late Work Assignments are due in the week assigned by 11:59 p.m. on Sunday, Denver time. Late work will be penalized 10% of total possible points for each day late. Assignments submitted more than four (4) days after due dates will not be accepted. Excuses for late work will be accepted at the discretion of the instructor and only prior to the assignment deadline. 5.3. Special Accommodation Contact the instructor for specific guidance concerning any issues that arise concerning class attendance, tardiness, late work, missed work, extensions on assignments, government duty, or academic accommodations for students with academic disabilities; the general course policy is for the instructor to resolve these and other issues case by case in a manner that is consistent with University policies. 5.4. Course Communication This syllabus is subject to change. Changes to the syllabus and details regarding assignments will be communicated in the announcements section of the ecollege classroom for this course. Communications regarding graded student work will be communicated in the ecollege gradebook for this course. It is the student s responsibility to check the ecollege classroom regularly for course updates. 5.5. Writing and Behavioral Standards Student assignments and examination should evidence familiarity and critical appreciation of required readings and class discussion. Written work must reflect independent thought and be well-written and logically persuasive, in addition to being well-informed. All papers must meet academic and professional standards for form and substance. Because this course is at a graduate level, students are expected to demonstrate the use of reliable sources of information to frame and support assignment submissions. Please check with the Auraria library guides (http://guides.auraria.edu/index.php) for information and help on types of suitable research sources. Unless otherwise noted in the assignment, work is to be submitted in APA 6 th format as to style, content, citations, and references. Page 4/13
5.6. Assignment Lengths The requirements of several assignments are expressed in terms of a suggested word count. The approach is based on a norm of a standard-formatted APA paper containing approximately 350 words of text per page. Thus, for example, a paper of 1,050 words would be around three pages double-spaced and in APA format. The word count represents in all cases a minimum to address fully the topics of the assignment. Additional word count will not be penalized provided the additional content is well written, is not repetitive, and contributes useful information to the assignment. 5.7. Academic Honesty As members of the University of Colorado Denver academic community, faculty and students accept the responsibility to maintain the highest standards of intellectual honesty and ethical conduct in completing all forms of academic work at the university. Plagiarism is the use of another person s distinctive ideas or words without acknowledgement. The incorporation of another person s work into one s own requires appropriate identification and acknowledgment, regardless of the means of appropriation. SPA students are responsible for being attentive to or observant of campus policies about academic honesty as stated in the University s Student Conduct Code. See the University of Colorado Denver Academic Honesty Code for more detailed information (http://www.ucdenver.edu/academics/colleges/spa/academics/documents/honor_code.pdf). Students in this course are responsible for knowing and following the Student Code of Conduct for this University. Any assignment submitted for this course that shows evidence of plagiarism or cheating will result in a failing grade on that assignment, and any such case will be referred to SPA administration for further action. 5.8. Students called for military duty If you are a student in the military with the potential of being called to military service and /or training during the course of the semester, you are encouraged to contact your school/college Associate Dean or Advising Office immediately. Page 5/13
6. ASSIGNMENTS BY WEEK WEEK 1: INTRODUCTION TO NONPROFIT ENTITIES Identify a suitable nonprofit entity for analysis in the remainder of the course. Examine approaches to discovering data for nonprofit entities. Describe the key elements of a nonprofit s history, vision, mission, primary goals and objectives, and main work programs. Bowman, chapters 1 & 5 (read ahead for Week 2: chapters 6, 7, 8, and 9) Written Assignment: Resources: Guidestar.org database (see separate directions for accessing) Choose a nonprofit entity with which you are familiar or for which you have an interest. Over the remainder of the course you will use data and information about this organization for a variety of assignments. Therefore, be sure that that your chosen organization has complete information in Guidestar.org including information about the vision, mission, primary goals and objectives, finances, and main work programs. If there are questions about whether a particular organization is suitable for the assignment, please pose those to the lecturer in the Q&A second of ecollege. Write a paper of 1,050 to 1,200 words describing the chosen nonprofit s history, vision, mission, primary goals and objectives, and main work programs. The paper should be presented in APA style and contain references to available materials on the chosen organization either in Guidestar.org or directly from the organization. Page 6/13
WEEK 2: NONPROFITS: THE FIT OF STRUCTURE, MISSION, AND FINANCES Identify and discuss the key elements of a nonprofit business model. Examine potential approaches to developing successful non profit business models. Describe how the served segments and value propositions translate into costs and revenues in a nonprofit business model. Bowman, chapters 6, 7, 8, and 9 Business Model Social Venture Basics Business Models Beyond Profit Written Assignment: Resources: Business Model Social Venture Basics (white paper available on the ecollge course site). Video: The Business Model Canvas in 2 Minutes (available at http://youtu.be/qoaozmtlp5s). Business Models Beyond Profit (available at http://goo.gl/gpczl). Business Model Social Venture Canvas. Written assignment: Complete the Business Model Social Venture Canvas based on the organization selected in Week 1. Prepare, based on the completed Business Model Canvas Social Venture, prepare a paper of 1,050 to 1,750 words describing how the served segments and value propositions translate into costs and revenues for the nonprofit. The paper should be presented in APA style and contain at references to available sources on the chosen organization and references to validate the model of costs and revenues. The completed Business Model Canvas may be included as an exhibit in the paper. Page 7/13
WEEK 3: NONPROFIT ACCOUNTING STRUCTURES AND STATEMENTS Identify and differentiate the financial statements commonly used by nonprofits. Describe the use and application of financial statements commonly used by nonprofits. Analyze financial data for a nonprofit over a three year period. Bowman, chapter 2 Dropkin et al., chapters 1, 2, and 3 Written Assignment: Financial statement review Resources: Guidestar.org database Assignment: Prepare an analysis of 1,050 to 1,400 words describing the financial statements of the chosen nonprofit organization and a development of financial trends over a three year period. Trends should be shown using comparative financial data for multiple years or periods. When describing the financial statements include an overview of the purpose of the particular statement, the common uses, and gaps in use. Comparative financial information should be presented using tables and/or graphs to show key figures and ratios. The paper should be presented in APA style and contain at references to available sources on the chosen organization and references to validate the model of costs and revenues. Page 8/13
WEEK 4: ACCOUNTING AND FINANCE STANDARDS FOR NONPROFITS INCLUDING FORM 990 Understand nonprofit classifications and filing requirements with the U.S. Internal Revenue Service. Describe the types of standards applicable to nonprofit entities. Analyze applicability of IRS, other governmental, and non-governmental to a nonprofit entity. Dropkin, et al. chapter 8 Written Assignment: Resources Guidestar.org database IRS Publication 557 (available at http://www.irs.gov/pub/irs-pdf/p557.pdf). Principles for Good Governance and Ethical Practice A Guide for Charities and Foundations (available at http://goo.gl/klijx or https://www.independentsector.org/uploads/accountability_documents/principles_refer ence.pdf) Assignment: Nonprofit standards analysis Prepare an analysis of 1,050 to 1,400 words describing appropriate standards and principles for financial oversight and fundraising for the organization chosen in Week 1. The analysis should address a) the standards used or that should be used (if none are evident) to by the organization, b) the level of compliance evidenced by organization disclosure, c) whether the appropriate standards are in use, and d) suggestions for improvement. Be sure to include IRS requirements, other governmental rules, and nongovernmental standards. The paper should be presented in APA style and contain at references to available sources on the chosen organization and references to validate the model of costs and revenues. Page 9/13
WEEK 5: BUDGETING BASICS: STRUCTURES, PRACTICES, AND STATEMENTS Identify the elements of an annual budget preparation package for a nonprofit. Understand the key structures, practices, and statements used in nonprofit budget preparation. Assemble an annual budget preparation package for a nonprofit. Bowman, chapters 4 & 10 Dropkin, et al., chapters 6, 7, & 9 to 16 Written Assignment: Resources Guidestar.org database Dropkin, et al., Budget-Building Book for Nonprofits CD Assignment: Annual Budget Preparation Package Prepare an annual budget preparation package for distribution to budget-responsible managers and executives within the chosen nonprofit entity. The package should include the following elements: Completed program and unit budgeting instructions and guideline forms. A budget calendar. A blank program or unit workplan to serve as a data collection template. Other budget forms as appropriate (see Appendix B of Budget Building Book for Nonprofits). A form to allow summarization of proposed budget changes. Budget assumptions and highlights. Draft letter of transmittal. The package should be prepared in as few files as possible (preferably one file) and should have the appearance of a professional document suitable for use in a nonprofit. APA style is not necessary for the format in this assignment. To the extent needed, however, include in-text reference citations and a reference page for external resources. Page 10/13
WEEK 6: DEVELOPING A NONPROFIT BUDGET Identify and understand the elements of an annual budget package for a nonprofit. Assemble an annual budget package for a nonprofit. Dropkin, et al., chapters 4, 5, 19, 20, & Resource B Written Assignment: Operating Budget Preparation Resources: Budget-Building Book for Nonprofits CD Assignment: Pro Forma Operating Budget Prepare an annual budget proposal for distribution to budget-responsible managers and executives within the chosen nonprofit entity. The package should include the following elements: Letter of transmittal. Total, organization-wide budget summary. Program, unit, or activity budget summaries. Organization-wide, line item expense budget. A capital budget. Appendices: Other information as needed including a glossary, summary of major financial and budget policies used in developing the budget, long-term strategic goal summary, organizational structure showing staffing levels by organizational unit, and graphics to demonstrate trends such as changes in expenses or income over years. The package should be prepared in as few files as possible (preferably one file) and should have the appearance of a professional document suitable for use in a nonprofit. APA style is not necessary for the format in this assignment. Students are free to use an authentic report style that is typical to task assigned. To the extent needed, however, include in-text reference citations and a reference page for external resources. Page 11/13
WEEK 7: MANAGING NONPROFIT REVENUE AND EXPENSES AND THE AUDIT Identify the key approaches to managing nonprofit revenues and expenses. Describe the key elements in a nonprofit audit. Describe zero-based budgeting and its use. Dropkin, et al., chapters 17, 18, 23, & 24 Written Assignment: Resources University Library Assignment: Memo to the Board on Zero-Based Budgeting The board of the nonprofit for which you have prepared a budget is considering implementing zero-based budgeting (ZBB) in the next budget cycle. The board has asked you to prepare an analysis of different approaches to ZBB and recommend when any particular approach would be beneficial for the organization to implement. The board has asked for a memorandum covering the following points: A definition of ZBB, including historical origins and the process used in the budgeting process. The data and organizational prerequisites for a successful ZBB process and a discussion of whether the nonprofit possesses the prerequisites. A discussion about the impact of ZBB on audits or the organization. Potential organizational resistance to the concept. The analysis should include at least three references from peer reviewed or scholarly sources. The paper should be of sufficient length to ensure that all topics are fully covered. Typically such a document would be at least 1,050 to 1,400 words in length. APA style is not necessary for the format in this assignment. Students are free to use an authentic report style that is typical to task assigned. To the extent needed, however, include in-text reference citations and a reference page for external resources. Page 12/13
WEEK 8: INTEGRATING FINANCE INTO STRATEGIC NONPROFIT MANAGEMENT Identify key strategic influences of a nonprofit on financial management. Describe elements of a sustainable nonprofit strategy. Develop an approach to implementing a financially sustainable nonprofit strategy. Bowman, chapter 11 Dropkin, et al., chapters 21 & 22 Written Assignment: Resources University Library Nonprofit Risk Management website (http://www.nonprofitrisk.org) Assignment: New Board Member On-Boarding Memo The board of the nonprofit for which you have prepared a budget has decided to prepare a new board member on-boarding package. The board is focused on ensuring that new board members and non-board members asked to serve on committees understand the key aspects of the nonprofit s financial management approach. The board has asked for a memorandum covering the following points: An overview of the governance process, including risk management elements. A description of the financial policies and procedures of the nonprofit. An overview of the annual budgeting process used by the nonprofit. A discussion of the financial analysis measures and processes used by the nonprofit. The analysis should include at least three references from peer reviewed or scholarly sources. The paper should be of sufficient length to ensure that all topics are fully covered. Typically such a document would be at least 1,050 to 1,400 words in length. APA style is not necessary for the format in this assignment. Students are free to use an authentic report style that is typical to task assigned. To the extent needed, however, include in-text reference citations and a reference page for external resources Page 13/13