Actionable Financial Analysis: Insights for Nonprofit Leaders In an increasingly data-filled world, it can be difficult to sort through proliferating information to find what matters most. Nonprofit finance is no different. And because healthy finances enable social impact, much is at stake in clearly articulating nonprofit financial condition and resource needs. How can nonprofit leaders make sense of financial data to create a clear picture of their organization's financial situation? Join Nonprofit Finance Fund and GuideStar to learn more about Financial SCAN and how this data platform can add value to planning and decision-making conversations. Presenters: Peter Kramer, Manager, Nonprofit Finance Fund; and Scott Menzel, Product & User Experience Manager, GuideStar USA (moderator)

1. Scott Menzel
Product & User Experience Manager
GuideStar
Peter Kramer
Manager
Nonprofit Finance Fund
June 5, 2014
Actionable Financial Analysis:
Insights for Nonprofit Leaders

2. AGENDA
Introduction to Financial SCAN
New Feature Overview
Brief Online Tour
Case Analysis
Q & A

3. Effective Solutions
Sound Financial Health
Strong Organizations
Quality Programs
We believe that financial health
supports impact

4. When it comes to finance, nonprofits face
common challenges
 Knowing which metrics to focus on for assessing
financial health
 Having the time and skills to collect, parse, and
report financial data
 Communicating about an organization’s financial
situation and resource needs

5. Financial SCAN at a Glance
What: Data platform for assessing nonprofit financial
health and fostering dialogue among all stakeholders
involved in making social impact
Who: Private and public grantmakers/donors,
nonprofit organizations, philanthropic advisors,
consultants and media
How: Private and public grantmakers/donors,
nonprofit organizations, philanthropic advisors,
consultants and media
WHAT
Data platform for assessing nonprofit financial
health, making data driven decisions and
informing grantmaker-grantee dialogue
WHO
Nonprofit organizations, private and public
grantmakers, individual donors, philanthropic
advisors, and consultants
HOW
Draws data directly and automatically from
IRS Forms 990,* presenting complex
information in an easy-to-analyze and
communicate format (350K+ orgs)
*Note: Financial SCAN does not include data from Forms 990 EZ

6. What’s in a Financial SCAN?
Organizational Dashboard: Five
years of key financial trends and ratios
Graphs & Explanatory Text: More
detailed overview of an organization’s:
 Expenses
 Revenue
 Profitability
 Balance Sheet
 Liquidity
Peer Comparison Dashboard: Select
peer organizations for financial
benchmarking

7. How are Nonprofit Leaders Using
Financial SCAN?
 Engaging staff, board members, and
funders in conversations about recent
dynamics and current needs
 Visually mapping the organization’s financial
story
 Providing historical context to inform
budgeting and planning
 Benchmarking with peer organizations,
assessing financial similarities and
differences within and across sectors, sizes
and markets
“My organization
never thought about
strategically and
proactively planning
its financial future
until I presented them
with Financial SCAN.
Executive Director,
Diversified Community Services,
Philadelphia, PA

8. Financial SCAN 2.0: New Features!
 Excel Download
 Peer Group Comparison
 7 Day Nonprofit Access

9. Brief Online Demonstration

10. Key Considerations: What 990 data can and
cannot do
990 data CAN help:
 Illustrate your organization’s financial trajectory and recent
revenue, expense, and balance sheet dynamics
 Show how your organization compares to its peers across
standardized fields
990 data CANNOT:
 Provide the authoritative and most up-to-date financial picture
of your organization
 Tie exactly to the information presented in an audit
 Show revenue restrictions
 Distinguish between operating dollars and capital dollars

11. Meet Today’s Case Organization:
REAL WORLD SKILLS
 MISSION: To prepare underserved youth for lasting
careers and self-sufficiency
 PROGRAMS:
 Personal & professional skill-building
 Summer internship placement
 Trade programs and certifications
 RECENT DYNAMICS:
 Steady yet modest growth
 New location and dated equipment
 Beginning strategic planning process

12. REAL WORLD SKILLS

13. Dashboard: Income Statement

14. Dashboard: Balance Sheet

15. Peer Comparison Dashboard:
1 2 3 4 5 6
1 2 3 4 5 6
1 2 3 4 5 6
1 2 3 4 5 6
1 2 3 4 5 6

16. Topics Explored in Financial SCAN
Graphs:
 Expense detail & composition
 Revenue detail & composition
 Profitability
 Full cost of doing business
 Asset composition
 Depreciation of fixed assets
 Liability composition
 Liabilities as a % of assets
 Liquidity

17. With the exception of 2008, surpluses
and deficits have been close to breakeven
RWS has effectively managed this growth by
consistently covering its operating costs to achieve
marginal surpluses
But are surpluses
adequate to build
financial
resilience?

18. RWS’s liquidity has fluctuated somewhat over
the period, but has been consistently tight
Available liquidity represents a nonprofit’s ability to
handle risks and seize new opportunities.

19. Observations & Recommendations for
REAL WORLD SKILLS
Observations from Financial SCAN:
 Modest growth over last several years
 Reliable mix of revenue sources
 Relative to peers, little fixed assets
 Tight liquidity constrains ability to innovate
Recommendations for Leadership:
 Make business planning a part of strategy development;
build on historical strengths (e.g., reliable revenue,
surpluses in most years, etc.)
 Consider amount and types of capital needed to build
liquidity and adapt to the changing job market
 To meet resource needs, discuss areas of fiscal strength
and vulnerability with funders

20. Q&A

21. nonprofitfinancefund.org 20
Thank you!
Peter Kramer
Manager, Advisory Services
Nonprofit Finance Fund
617-204-9772
peter.kramer@nffusa.org
To learn more:
www.guidestar.org/financialSCAN