A Conversation on Making Data Driven Decisions

Using Financial SCAN

December 9th, 2015

Today’s Webinar

Presented By:

Presenters

Christopher

Percopo,

Director of

Grants

Management

The Helmsley

Charitable Trust

Bunkie Righter,

Senior Director

GuideStar

Dennis Dolbee,

Director Financial

Services

Boys & Girls Clubs of

America

Peter Kramer,

Associate Director

Nonprofit Finance Fund

Illustration Credit: Julian Yu

Me(Preacher)

You(Choir)

Illustration Credit: Julian Yu

“Preaching to the choir actually arms the choir with

arguments and elevates the choir’s discourse.”

The best analysis of the financial health of an

organization will always include a dialogue with

leadership about their financial condition, story and

resource needs.

To engage staff, board members, and

funders in conversations about recent

dynamics and current needs.

To map visually the organization’s

financial story.

To benchmark against peer

organizations, assessing financial

similarities and differences within and

across sectors, sizes and markets.

To provide historical context to inform

budgeting and planning.

“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

Reasons To Use Financial SCAN

Visit: www.guidestar.org/financialscan to learn more

Due Dil igence

When assessing a nonprofit’s operating

performance, look for:

Positive Indicators…

Reliable, repeatable, replaceable

revenue

Consistent unrestricted operating

surpluses

Surpluses that are sufficient in size to

cover full costs

In assessing the health of a

nonprofit’s capital structure, look for:

Positive Indicators…

Evidence of reinvestment in fixed assets

Evidence of ability to manage debt

Cash of at least three month’s expenses

Unrestricted liquid net assets of the

same

Current assets exceed liabilities

Profitability & Savings: Are costs covered? Are surpluses sufficient to pay for

additional cash needs that live on the balance sheet? Is the nonprofit

generating adequate savings?

Revenue Dynamics: Where does the nonprofit’s money come from? Are

revenue streams reliable, repeatable, replaceable?

Expense Dynamics: Does management understand dynamics of direct and

indirect costs? Are costs adjusted in response to revenue shortfalls?

Health of Balance Sheet: Are the size, nature and distribution of assets, net

assets and liabilities appropriate to support the organization’s business and

programs over the long term?

Liquidity: Is there enough cash (or other sources of liquidity) available to cover

current obligations? How many months of liquidity are on hand? How liquid are

the nonprofit’s net assets?

Analysis for Assessing Nonprofit

Financial Health

T H A N K Y O U !

Questions?

Visit: www.guidestar.org/financialscan to learn more

W H AT D O A L L O F T H O S E E VA L U AT I O N M E T H O D S H AV E I N C O M M O N ?

DATA

The (1) text and (2) basic graphical representations in this presentation are under a Creative

Commons Attribution license. The photographs and other copied images are not, as I do not

have rights to them.

Bunkie Righter,

brighter@guidestar.org

www.guidestar.org