Money & Mission:

Ensuring Effectiveness and Sustainability through Successful Financial Leadership (ML252)

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Welcome to Class! Course Completion Policy Reminder Participants must attend 100% of the course to receive a course attendance certificate. Arriving to class late or leaving early will result in incomplete course attendance. Class Schedule Highlights Course Schedule Mon. – Wed.: 8:30 a.m. to 4:00 p.m.

Lunch Times (On Your Own) 11:30 a.m. – 1:00 p.m.

Thurs.:

8:30 a.m. to 4:30 p.m.

11:45 a.m. – 1:00 p.m.

Fri.:

8:30 a.m. to 2:30 p.m.

11:45 a.m. – 1:00 p.m.

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Management & Leadership Track The mission of the Management & Leadership Track is to equip individuals to build community, lead change, and strategically advance their mission in partnership with community stakeholders. From the list of track competencies below, this course will address:

 Leadership, vision & change  Accountability & results (impact)  Communications  Critical thinking  Diversity & inclusion  Strategy  People & partnerships  Systems & structures

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Table Intros

Introduce yourself and discuss:  What led you to decide to come to this session  What are you hoping to walk away with, better understand, be able to do, etc.

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Welcome

Brief Around-the-Room for Networking    

Your Name Organization’s Name Your Role A ‘hope-for’

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Our Expectations Participants will have a plan to strengthen financial practices that:  Engage the organization's leadership in planning for community benefit/impact;  Articulate the assumptions and models about what it takes to achieve outcomes;  Assess the effectiveness & efficiency of organizational efforts; and  Evaluate organizational risk and sustainability Provided on behalf of

Workshop Focus Areas Purpose Leadership & Strategy Assets & Allocation Planning & Budgeting Performance Reporting & Communication Sustainability Integrity & Risk Provided on behalf of

Your Materials Slides

Models

Root to Canopy Case Study

Discussion & Planning Tool

Resource Guide (online) All resources are available at NTI.orgforward.net Provided on behalf of

What is the Potential for Leadership Imagine that your financial processes and systems are awesome, what would be different in how people do their work  What would people be spending more time thinking and talking about?  What would people be able to do more of?  How would the work of the organization be different?

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Fundamental Fiduciary Question

Are we effectively and efficiently investing the resources/assets the organization acquires to strategically advance community benefit and achieve our outcomes in a manner that is sustainable over time? Provided on behalf of

An Organization IS Interdependent Program Capacity Demand, design, effectiveness. mission outcomes

Leadership Capacity Organizational Capacity People, systems, and resources available to pursue program activities

Asset Capacity Business model, financial reserves, donor base, partnerships, etc.

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Example of Our Fiduciary Curiosity Program Advancement Foundation Root to Canopy Two Hundred Thousand and 00/100

NOW!

200,000.00

Have Fun Launching the Pilot

What questions would you want answered before accepting Provided on behalf of

Fiduciary-Focused Conversations What would conversations that link assets (money+) and outcomes look like?  What would people actually be talking about?  What questions would you want leadership asking of themselves? …of the organization? Which leaders are asking which questions? Financial Leadership is the ability to determine and put in place the conditions that support these types of Worksheet Page 2 conversations Provided on behalf of

Conversations: You Choose the Focus

* Orgforward: Modified From David Rock - Quiet Leadership Provided on behalf of

Conversation = Engagement

What

Effectively Functioning

Transactions

Engaged How

Disposition

Inspired Why © Orgforward

Desire Provided on behalf of

Financial Leadership – Connecting Dots People Are…  Engaged in Meaningful Dialog and Conversation  Explicitly Linking Finance to Benefit, Outcomes, & Strategy  Connecting Systems - Finance and Programs  More Financially Knowledgeable  Acting with Integrity and Accountability  Focused on Sustainability – beyond just viability Source: http://leadershipgarage.com/

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A Giant Fiduciary Opportunity – The Budget

When we ask leadership to approve a budget, what are they REALLY approving?

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A Budget Tactility Approves… (Non Fiduciary) Vision / Mission

  Vision of Community  Community Benefit/Impact    Strategy  Program Mix    Infrastructure / Systems  Activities 

Business Model Asset Strategy

  Generate Assets ($/)   Utilize Assets ($/) Provided on behalf of

Making Financial Leadership Possible Financial Leadership relies on… • Focus on Ends first AND then the Means that get there • Articulated common goal(s) = community benefit • Clear approach/strategy • Strong models of how assets are acquired and utilized • Accounting infrastructure that aligns with models • Communication tools that provide feedback on the above • Leadership & Time to discuss implications Provided on behalf of

Finances - A MEANS to…  Planning that advances community benefit  Shedding light on our impact in the community  Evaluating the effectiveness and efficiency of execution  Clarifying and assessing the efficacy of assumptions and models  Facilitating the right conversations It’s a Strategy, Planning, and Evaluation Tool Provided on behalf of

Finance Requires Context Reports Budget Financial Systems

© Orgforward

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Your Model – Foundation for Finance

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Your Model – Foundation for Finance

Missionary

Desired Community Visionary Necessary Community Capacity & Values Areas of Organizational Impact/Benefit Community Served (Beneficiaries & Backers) Outcomes / Direct Benefits Approach (Hypothesis, Beliefs, & Assumptions) Strategy (Program Mix & Infrastructure) Operations & Asset Model Pragmatist Activities © Orgforward

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Foundational Context – Community Outcomes 1. How do you describe the desired community the organization works to create?(Vision) 2. What capacity is required within the community to achieve the above vision? (Community Capacity) 3. What specific benefits or capacity does the organization work to advance and what approach does it use to accomplish that work? (Outcomes)

Worksheet Page 4 Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A1. People serving the organization clearly understand and agree on the community outcomes the organization strives to create and use that knowledge when making decisions and evaluating work In the Worksheet record things you will do to strengthen this in the organization (p.5) Provided on behalf of

Sustainability Screens – The Big Bridge What consistent criteria does your organization apply in deciding whether to invest in, reduce, or eliminate a program/effort?

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Are We Advancing What Matters While Missions are important… Outcomes are what really matter

For each effort we engage in … 1. To what degree do we EXPECT it to advance each outcome 2. To what degree DOES it advance each outcome 3. What investment do we make in this effort Provided on behalf of

Vetting Efforts Against Outcomes

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Fulfillment Profitability Mission

Effectiveness

The Matrix Map: Mission-Money Alignment

Efficiency Book: The Sustainability Mindset – Zimmerman & Bell Provided on behalf of

Effectiveness

A Matrix Map

Profitability Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure …

A2. The organization has consistent ways of vetting efforts against community outcomes and organizational strategy? Worksheet (p.5) Provided on behalf of

Making Financial Leadership Possible Financial Leadership relies on…  Focus on Ends first AND then the Means that get there  Articulated common goal(s) = community benefit  Clear approach/strategy • Strong models that connect efforts to assets • Accounting infrastructure that aligns with models • Communication tools that provide feedback on the above • Leadership & Time to discuss implications Provided on behalf of

Communicating Models

Connecting         • 

Community Benefit Approach Strategy Programming Assets (Financial Model)

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Asset Model - Understanding Basic Resource Flow Who in the organization knows, where the financial assets… come from go  % earned income – from what  % foundation support – avg size grant  % donated – avg size gift  % in-kind  % investment / endowment

     

% on staff – doing what % on materials % on services % on facilities % on general operations % on reserves / debt

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Linking Financial Knowledge to Outcomes & Strategy The Organizational Profile: Links Assets, Allocations, & Aspiration Business Profile: Root to Canopy is a $1.2 million agency with 2/3 of our income from earned income strategies, primarily through fees for service and county contracts, and 1/3 from philanthropic support (50% grants, 25% Ind. Giving, 25% Corp Sponsorships). Our primary expenditures are the staffing (61%) and consulting (25%) required to fulfill our mission through our four major program areas – Thrive, Prosper, Fanfare, and Flourish – of which Flourish is the largest program at roughly 50% of expenditures. Our success and sustainability are highly dependent on the skills of both our paid staff and volunteer arborists as well as the public interest in establishing and maintaining a “green” overhead canopy. Provided on behalf of

Linking Financial Knowledge to Outcomes & Strategy The Organizational Profile Assets, Allocations, & Aspiration Building a Profile Statement 1. XYZ’s is an organization with a revenue stream that

comes from x% …. (if in-kind or volunteers are significant, include them) 2. Those resources are used to deliver x, y and z … (include specific program and admin) 3. To be effective, we must invest in the following resources/strategies… Worksheet (p.6)

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Understanding Assets – What it takes to do it Do we know what it takes?  What assets do we rely on  How are assets dependent on each other  Where do the assets come from and what do we need to get them  What are the assumptions how assets are used Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure …

A3. Staff and Board understand the organization’s financial and business model (how assets are acquired and where they are allocated) Worksheet (p.7) Provided on behalf of

Mid-Day Reflection

• • • •

Your Biggest Take Away What jumps out What Aha did you have Any big questions

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Workshop Focus Areas Purpose Leadership & Strategy Assets & Allocation Planning & Budgeting Performance Reporting & Communication Sustainability Integrity & Risk Provided on behalf of

What is the Potential for Leadership Imagine that your financial processes and systems are awesome, what would be different in how people do their work  What would people be spending more time thinking and talking about?  What would people be able to do more of?  How would the work of the organization be different? Provided on behalf of

Benefits of a Solid Financial Structure

Mission Relevance

Resource Allocation

Business Model

Assumptions

Logic Model

Results

Clear Expectations

Controls

Accountability

Clearly Identified Resource Needs For Growth or Contraction

Stuff, Infrastructure, Staff Provided on behalf of

The Nonprofit Conundrum – Which Do You Want

Revenue Allocations

UNRESTRICTED

UNRESTRICTED Provided on behalf of

Reserves

Administration

Development RESTRICTED

RESTRICTED

© Claudia P. Schechter

Program

Development Administration Reserves

Program

Expense Allocations

Know what you want to look like!

Revenue Allocations

Reserves

Administration

Development Restricted $

Restricted $

© Claudia P. Schechter

Program

Development Administration Reserves

Program

Expense Allocations

What Do We Want to Be

Unrestricted $

Unrestricted $ FLEX

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Re-Align Thinking About Organization Model

Each of our programs is built around, supported by, and shares responsibility for Core Mission Support functions Source: A Graphic Re-visioning of Nonprofit Overhead, Nonprofit Quarterly, By Curtis Klotz of Nonprofits Assistance Fund, August 16, 2016 Provided on behalf of

Highlighting Underfunded Program Challenges Some programs are only partially funded by contributions or by earned revenue. The expenses not covered include a proportionate share of the Core Mission Support. This creates a Gap in funding for the finance, human resources, governance, and fundraising infrastructure that support the entire organization.

Source: A Graphic Re-visioning of Nonprofit Overhead, Nonprofit Quarterly, By Curtis Klotz of Nonprofits Assistance Fund, August 16, 2016 Provided on behalf of

Deepen Thinking – A 3-Dimensional Budget

OPERATING BUDGET

Program

Program

Program

The flat plane budget Operating Budget

Reserves

Operating Budget

Reserves

Reserves

IN-KIND, PASS THRU FACTORS

CAPITAL BUDGET

The 3-dimensional budget Provided on behalf of

Two-Part Organizational Budget Operating Budget

 Associated with Statement of Activities (Income Statement / P&L)  Planning income and expenses for a single fiscal year to perform immediate mission agenda

Capital Budget

 Associated with Statement of Financial Position (Balance Sheet)  Sets annual capital targets with explicit funding sources/strategies  Done on multi-year basis  Looks at overall assets (reserves) Provided on behalf of

Holding Strategic Budget Discussions “For many nonprofits, the annual ‘approval of the budget’ is frequently an empty ritual...”

(Blue Avocado, The Best of the Board Cafe, Second Edition, by Jan Masaoka, former ED of Compass Point)

Think of the power if we  Harness the strategic thinking of your program leaders  Restructure the board’s budget discussions

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Getting Started - Clarify What to Invest In Strategic Questions for Our Resource Allocation

    

What strategies and programs are we committed to that advance our outcomes? (Strategy Screen) Are we clear about our assumptions about what it takes to do our work? (Operational Models) What do we want to invest in from our business/strategic plan? (Strategic Plan) Have we reflected our values and vision as translated into our policies? What changes/risks/opportunities can we predict?

Follow-up Question: Which are Capital & which are Operating Investments Provided on behalf of

Revisit Context and Foundational Thinking Reports Budget Financial Systems

© Orgforward

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Getting Started - Clarify What to Invest In Use sustainability screens to decide whether to invest in, reduce, or eliminate a program/effort? • Who is Involved?

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Engaging Program Leadership Program leaders are your best budget resource take advantage of their commitment, self-interest, and accountability:  Are there specific program objectives that we want for the next 1-2-3 years?  Are we staffed for success?  Are our systems/infrastructure up to it?  Can we share resources and create synergies internally?  Is our dollar allocation generally in line with our priorities? Provided on behalf of

Engaging Board Leadership Take advantage of the board's diverse knowledge and community base with strategic questions:  Are there specific program outcomes or financial objectives that we want for the next 1-2-3 years?  Are there desirable new projects, program expansions, or changes in compensation?  Are there large expenses for which we should be saving?  Is our dollar allocation generally in line with our priorities?  How are we using unrestricted income to support mission priorities? Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A4. We harness the strategic thinking of BOTH our programs managers and the board of directors in developing and adopting the plan for what to budget for

Worksheet (p.7) Provided on behalf of

Building Budgets – General Approaches Income-Based  Identify reliable income first, determine actual expenses, reconcile expenses against income  Determine what-if scenarios  if +income, then +expense

Estimation Strategy (Amounts)  Incremental  % increases/decreases to prior year totals  Zero-based  Starts from scratch every year; forces reevaluation of assumptions.

Accrual not Cash  Accrual  Matches income and related expenses in the appropriate fiscal period, regardless of cash flow. Provided on behalf of

Building the Budget: Phase 1 - Revenue A sustainable business model begins with accurate income projections, not with program expense outlays

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Asset Engagement Model Sources  Financial  In-Kind  Partners

Scale Timing (Cash Flow) Trends (historical and projected)  Internal – changes in sources and scale  External – changes in environment (regulation, economy, …) Provided on behalf of

Revenue Integrity - Determining Commitment & Capacity

Strategy: build a reliable portfolio of revenue sources…  Do we have revenue planning tools that articulate and validate our program income assumptions?  Do we set expectations for revenue generation by program?  Do we know what it will take to achieve goal?

 Can we estimate demand and/or discount contribution expectations?  Do we understand the timing of revenue?

(reimbursable contract, funder cycles, event schedule)

Pitfall: plugged income numbers… Provided on behalf of

Revenue Tools – Your Behind the Scenes Work

© Fiscal Management Associates, LLC, 2012

Fee for Service Projection Tool

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure …

A5. We have revenue planning tools that articulate and validate our program and organizational income assumptions? Worksheet (p.7) Provided on behalf of

Building the Budget: Phase 2 – Expenses/Investments A Budget should represent the investments of assets required to support the successful execution of a program This includes an appropriate share of core operational support expenses Source: A Graphic Re-visioning of Nonprofit Overhead, Nonprofit Quarterly, By Curtis Klotz of Nonprofits Assistance Fund, August 16, 2016 Provided on behalf of

What Goes Into the Full/True Cost of Programs Direct Expense: Unique to Program Direct Expenses: Shared by Programs (aka Common Costs)

Share of Core Support Functions (aka Overhead)

• Direct staffing • Program specific admin staffing • Program specific materials, fees, licensing, facilities, etc • Rent, utilities, phone • Office supplies, business machines (copier/printer…) • Insurance, licensing, fixed assets (furniture, vehicles…) • Business administration staffing (finance, HR, IT, Marketing) • External relations (partnerships, PR, community outreach) • Board support • Fundraising Provided on behalf of

Direct Expenses – What it takes to determine Determining What We Pay For Do we know:  Which assets are financial vs nonfinancial  Asset dependencies  Assumptions behind asset development  Assumptions behind asset utilization Provided on behalf of

People - Our Single Most Important Asset People = 65% to 85% of nonprofit resources Strategy: build a committed, balanced staffing plan  Identify where people are deployed and what they are doing  Can we accurately account for staff time by-activity? Does this inform the budget process?  Are skills, tasks, pay levels aligned appropriately?

 Develop staffing strategies & policies Pitfalls: (1) Allocating salary versus actual time; (2) not adjusting staff deployment in alignment with revenue and program changes Provided on behalf of

In-Kind: Key “non-monetary” Assets Strategy: budget Volunteer and other In-Kind value (in $$$!) Goods Financial Asset & Liability “Professional Services”*  Financial Asset & Liability  Included in GAAP statements, audit, and noted in 990 “Non-Professional Services”  Non-financial – but valuable  Significant of volunteers to your ability to implement mission activities? Pitfall: not understanding the impact of a loss of volunteer resources and not investing in volunteer infrastructure *IRS defines this

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Budgeting Non-Cash Items Depreciation

 Provides more accurate bottom line in budget  Capitalization Threshold Policy  Fixed Assets/Depreciation Schedule  Capital Budgeting Tool  Helps build Net Assets

In-kind Contributions

 Net-Zero (income = expense)  Reflects more realistically the magnitude of resources needed to accomplish your organization’s mission  Keep “below the line” so real cash is not confused with in-kind values Provided on behalf of

Budgeting Shared Costs Across Activities Strategy: develop and apply a rational allocation policy First Define Clearly: Common Costs – costs of resources that directly support more than one activity across the organization Overhead Core Operations Costs – costs of goods, services, and staffing that support the organization entity (often called General & Administrative and Fundraising)

Pitfall: all common costs included in G&A Provided on behalf of

Competing Viewpoints Management Viewpoint Coverage is your goal! Common Costs  Support more than one program Overhead / Infrastructure  Fundraising Expense  General & Administrative Expense

Funder Viewpoint What they are able/willing to pay for is their goal! Indirect Cost Rate  A protocol that most public funders accept May not allow some common costs and considers some direct costs May use indirect costs and overhead as the same term Provided on behalf of

Budgeting Shared Costs Across Activities Strategy: develop and apply a rational allocation policy  What costs should we identify as indirect costs?  How is a program’s share of common costs allocated?  What’s the impact if we lose a program?  How do we address programs that do not cover their allocated share of costs? Pitfall: people do not understand the rationale behind the allocation – they complain Provided on behalf of

The Power of Tracking Time Tracking

Allocation of Effort (Hours) Program 1 Program 2

G&A

Total

Staff Member

1000

2300

100

3400

Other Staff Member

1000

1500

580

3080

TOTAL HRS

2000

3800

680

6480

.96

1.8

.3

3.1

Total FTE

Common Cost Allocation Program 1

Program 2

G&A

990 Allocation %

31%

59%

10%

Fully Costed Prog

34%

66% Provided on behalf of

Grant & Contract Budgeting Strategy: apply the concept of Net Grant Receipts (grant amount > direct costs) Preparing grant budgets  Start with internal management budget that identifies full/true cost of program (build if grant is for a new program)  Identify what expenses are allowable by the grant and can be used to cover actual expenses (promises of grant)  Incorporate these promises in our projected year end and determine any shortfalls in coverage of core operating or common costs resulting from grant/contract

Pitfall: thinking we have funds for our core budget when we don’t Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A6. Budgets clearly identify incoming resources and their allocation based upon the strategic and annual work plan objectives of the organization, and identify the true cost of programs including allocation of staff and common costs Worksheet (p.8) Provided on behalf of

Phase 3: System Structure – Aligning to Efforts VISION  Our vision is for a healthy urban living environment which integrates the natural and manufactured ecosystems, within which all people can experience, contribute to, and benefit from their physical community.

MISSION  Root to Canopy advances this vision by working in communities with historic canopy deficiency disorder (HCDD) in developing the skills and support needed to build independent and sustainable canopy rich communities.

PROGRAMS  Our Fanfare, Prosper, Thrive, and Flourish programs …

Program Services Fanfare

Prosper

Thrive Flourish Sources of Funds Uses of Funds

Support Services FundGov./ Raising Admin.

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System Structure – Keeping Track of Asset Flow RESTRICTED/ UNRESTRICTED

ACCOUNT

PROGRAM

FUNDER

But don’t forget IN-KIND – What will allow you to understand and keep aware of the major non-financial assets that the organization relies on. Provided on behalf of

A Word on Presentation Presentation  Well formatted budgets are easy to read and understand.  What are characteristics of good formatting?

Image source http://buffalo7.co.uk

The Spreadsheet  The spreadsheet is your budgeting tool. Learn some basic skills to use it effectively. Provided on behalf of

Budget Example – Case Study (Page 3) • What works in this format? • What might you add? • Does it help us understand our business model? • Important control points? • Financial state? Provided on behalf of

Key Questions for Our Operations Budget  Are our accounting structure and our budget tool aligned with our program structure?  Have we assessed program contribution and program interdependence?  Can we afford this operating budget?  Do we know where we could make principled cuts, if necessary? Fund a program investment?  Have we moved to a rolling 2-3 year budget process? Provided on behalf of

Budgeting Sustainability Analyze revenue concentration risks:  Single source dependency?

Analyze expense allocations:  Support mission/program priorities?  Do they include infrastructure costs?

80

Provided on behalf of

Final Piece of Operating Budget Develop a month by month cash flow projection for your budget  Include it in your budget documents for the board  Make sure it serves as an early warning for tight months Budget by Activity

Budget by Cash Flow

Pre-Audit TOTAL

Programs Spec Cap Cash Flow >>>> Projected BUDGET Program 1 FY13 A B Prog 2 Admin FR FY12 Evt Camp Jan Feb Mar Apr… Income $$ What income supports… When cash arrives… $$ $$ Expenses $$ What expenses are spent for… When cash is disbursed… Income line items --> Sources of funds/income… Provided on behalf of

Phase 4: A Strategic Budgeting Process - Policies Vision / Mission

 Vision of Community  Community Benefit/Impact  Strategy  Program Mix  Infrastructure / Systems  Activities

Business Model Asset Strategy

 Generate Assets  Utilize Assets Provided on behalf of

Provided on behalf of

Policy Tools: Year-Round Budget Process Begin FY: Analyze past year End FY: Prepare budget and amend future budgets and cashflow Engage Board and Staff in strategic work planning

Examine Program Results and Sustainability

Re-examine current budget and program progress

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Policy Tools: Budget Process Timeline

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Outcomes / Strategic Goals Action Plan Final Draft Budget

Approved Budget

Financial Reporting

Draft Budget Treasurer Senior Staff Program Staff

Data & Financial Models

Finance Committee

Board Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A7. The budget process extends throughout the year as a planning-monitoringevaluation process and delivers a multiyear budget

Worksheet (p.9) Provided on behalf of

Phase 5 - Adding Capital and Time

OPERATING BUDGET IN-KIND, PASS THRU FACTORS CAPITAL BUDGET

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Capital Budget: Planning for Sustainability Strategy: ensure net assets and capital needs are resourced by building a Capital budget  Budget for operating reserves  Reduce a deficit, make debt payments, pay down a line of credit?  Purchase equipment, repair facilities, or make leasehold improvements  Funds to support new initiatives (innovation) Provided on behalf of

Operating Reserves “Nonprofit” does not mean “no surplus allowed”

YES! We Do Want/Need Reserves

Promotes Donor/Funder Confidence  Sound Investment in sustainable organization Improves Cash Management - Reduces Stress  Permits acceptance of reimbursable grants Provides Financial Flexibility  Meeting contingencies, handling emergencies  Changing course, unwinding Provided on behalf of

Net Assets – In Pictures BOARD

Operating Cash

Operating Reserves

Special Purpose Funds

Source https://marquetteeducator.files.wordpress.com Provided on behalf of

Reserves Terms & Concepts Unrestricted Net Assets

Available

Not Available

Unrestricted Net Assets available for designation by the board

Equity in Fixed Assets, Deposits, Long-term Receivables

Undesignated Operating Funds

Board-Designated Operating Reserves

Board-Designated Reserves

Undesignated portion of available net assets Working Capital

__ % of annual operating expenses

Special Purpose or Building Reserves

Provided on behalf of

Reserves Terms & Concepts Statement of Financial Position Assets < Liabilities > = Net Assets Current Liabilities Accounts Payable Accrued Expenses Payroll Liabilities Deferred Revenue Line of Credit Current Portion of Loan Long Term Bond Mortgage Loan (over 1 year)

Current Assets Cash Receivables (Short term) Inventories Prepaid Expenses Fixed Assets Furniture & Equipment Real Property Accumulated Depreciation

Assets =

Liabilities +

Other Assets Deposits Long-term Investments Long-term Receivables

Unrestricted

Net Assets Debit Balance

Credit Balance

* Operating Net Assets * Operating Reserves * Other Reserves Temporarily Restricted Permanently Restricted

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Determining the Appropriate Ratio Minimum 25% (about 3 mo) of the annual operating expense budget – Recommended by the Nonprofit Operating Reserves Initiative Workgroup

Common factors that indicate a higher ratio  Revenue volatility factors  Spending flexibility factors  Governance & Management factors  Level of programmatic risk  Organization life cycle stage

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Special Purpose Reserves/Funds Programmatic  Program Development  Program Venture Capital

Organizational & Infrastructure  Facility and Equipment Acquisition  Maintenance & Replacement fund(s) for Facility & Equipment  Human Resource Capacity Building Fund Executive transition, benefits and pension, …

 Other Special Purpose Funds Moving to new facilities, weather event or other emergencies Provided on behalf of

Funding the Operating Reserve  Budget for operating surpluses annually  Include a specific budget line item to build the reserve  Fund Depreciation  Include in multi-year Capital Budgets  Include in Capital Campaigns  Designate Board Contributions  Designate Vacancy Savings  Designate Windfalls  Tariff on unrestricted gifts Provided on behalf of

Steps to Creating an Operating Reserve 1. Determine your policy 2. Review the factors that argue for higher or lower reserves 3. Set your reserve goal 4. Determine your funding mechanisms 5. Explain it to your funders and donors Use the toolkit  Provided on behalf of

Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure …

A8. The organization effectively budgets for capital and operating reserves and have strategies to fund those budgets Worksheet (p.9) Provided on behalf of

A Solid Financial Plan – Where We Land  Good forecasting models for income and have we explored cost effective ways to diversify it  Fully budget for each program including an appropriate share of common costs and overhead  Understand how much each program requires from general operating support above direct support  Allocations reflect our assumptions about human capital  Budgeted reserves & capital needs Provided on behalf of

Day 1 Reflection • • • • • •

Your Biggest Take Away What jumps out What Aha did you have Any big questions What worked? What can we improve tomorrow?

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Welcome Back – Day 2 Any questions came up overnight?  Strategic Context  Financial Leadership  Leadership Roles  Budgeting / Cash Flow

I have one…(again)

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What is the Potential for Leadership Imagine that your financial processes and systems are awesome, what would be different in how people do their work  What would people be spending more time thinking and talking about?  What would people be able to do more of?  How would the work of the organization be different?

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Workshop Focus Areas Purpose Leadership & Strategy Assets & Allocation Planning & Budgeting Performance Reporting & Communication Sustainability Integrity & Risk Provided on behalf of

Discussions and Decision-Making that Matter

• Monitoring Progress

•Evaluating Assumptions

•Making Change

• Outcomes Strategy • Asset Allocation Investments Expenditures

• Asset Engagement • Operating Model • Infrastructure Provided on behalf of

Connecting Operations to Outcomes Community Outcomes

STRATEGY SCREEN

STRATEGY

Resource Engagement & Utilization

REPORTS Provided on behalf of

Getting the Right Info to the Right People  Understand what financial reports relate to what work and what audience  Review key reports and other analytic tools for strategic discussions about sustainability  Linking performance, outcomes, and resources  scoreboard/dashboard  return on mission statement

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Desired Reporting Outcomes What do want reports to lead to?...Conversations! What thinking, conversations, and behaviors do we want from the audience … and what reporting makes that possible  Staff  Program management  Executive leadership  Finance committee  Board  Funder Image source http://www.zarca.com  Public and IRS Provided on behalf of

Desired Reporting Outcomes – Exercise (p.11) Audiences

Type of Conversation (What do we want them talking about and focused on?)

Type of Data/Information (detail & format)

Staff Program Management Exec Leadership Finance Committee Board Funder Public & IRS

Image source http://www.perpetuumsoft.com

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Reporting – A Sense Making Tool

    

Effective outcomes achievement Investment of resources & the returns Financial and operational integrity Viability AND Sustainability Growth in results & benefit to community (proven & expected) Provided on behalf of

Reporting – A Business Model Assessment Tool Put good systems in place

Know what is going on

Policies and processes ensuring good Internal Controls and accuracy

Accounting

Planning Plan

Budget effectively based on analysis and incorporating strategic plan Think long-range

Record, present, interpret, and respond to financial data, incorporating it in a meaningful way into decision-making and planning.

Analysis

Get and use good reports Ask questions Provide financial leadership through understanding of financial reports

Reporting

Evaluate

Analyze data to determine necessary course corrections and to inform planning

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Reporting – A Decision Making Tool More than just a requirement…A Fundamental Feedback Tool Strong infrastructure supports strong programs accounting system’s structure is aligned to operational model of the organization and provides timely, accurate, and relevant data to decision makers (MEANS) Strong accountability and transparency attract strong support – you, staff, and board clearly know the organization’s financial status, how assets are being used, and what you have to work with moving forward (OUTCOMES) Provided on behalf of

Understanding Standard Financial Reports How does a given report contribute to… Sense Making  What can this report help us understand? Business / Operating Model Assessment  What does this tell us about how we function and our current state? Decision Making  What questions should we be asking and how should this be informing our actions moving forward? Provided on behalf of

Two Organizational Budgets Operating Budget

 Associated with Statement of Activities (Income Statement / P&L)  Planning income and expenses for a single fiscal year to perform immediate mission agenda

Capital Budget

 Associated with Statement of Financial Position (Balance Sheet)  Sets annual capital targets with explicit funding sources/strategies  Done on multi-year basis  Looks at overall assets (reserves) Provided on behalf of

Reporting – Know Your Inventory Standard Financial Reports  Statement of Position (Balance Sheet)  Statement of Activity (P&L, Income Statement)  Cash Flow Projections  Accountability (990, Audit, Annual Report) Analytic Reports  Ratios  Graphs Mission Outcomes  Cost per service unit  Return on Mission (ROM/ROI)

 Time Series  Industry Comps

 Cost per outcome  Number of clients

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Model Statement of Activities Sense Making • How is the organization progressing against the plan (operational budget)

• What outcomes are we achieving from this investment so far Business Model Assessment • What assumptions about revenue and expenses models are correct/incorrect Decision Making • Is our current path sustainable @Model created by Elizabeth Foley

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Statement of Activity  Programs or functional expense?  Both!  Compared to what?  Budget, projected YE, previous year if applicable, …  Begs the ? – is this variance good, bad, indifferent?

 Roll-ups vs detail depending on audience Board (Org Level Detail, Expense Roll-Ups) Staff (Org Detail + Program Breakout & Expense Detail)

   

Clearly states restricted and unrestricted Tells your in-kind business model Supplemented with narrative! Prepared on an accrual basis Provided on behalf of

Sample Statement of Position (Balance Sheet) CASH ACCT RECV

$100,000 $25,000

GRANTS RECV

$200,000

FIXED ASSETS

$900,000

S-T LIABS

$220,000

L-T LIABS

$275,000

NET ASSETS $730,000

Sense Making  What is this helping you understand?  What requires more clarity? Operating Model  What elements of how we are structured or how we operate can you learn from looking at this?  What potential “structural/systemic” issues might there be red flags about? Decision Making  What types of decisions can this info help us make? Provided on behalf of

Statement of Position Concepts Coverage/Risk • Quick ratio • Current ratio

Aging • Receivables • Payables

Fixed Asset Investment Inventory Deferred Income

Equity / Net Assets • Unrestricted •Available •Fixed •Reserves

• Temporarily restricted •Time •Purpose

• Permanently restricted

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Statement of Position What does it tell you about your organization?  Cumulative results of all the years of operations (surpluses, deficits, investments)  Key to financial reconciliation & control    

Coverage and cashflow Aging and cashflow Fixed assets and building burdens Whose money we are using…unrestricted and restricted funds

Supplement with Narrative Context

 Annotation, treasurer’s memo  Good opportunity for sustainability ratios and percentages (coming later) Provided on behalf of

Understanding Asset Restriction - Utilization

Source: Nonprofit Finance Fund Provided on behalf of

Model Statement of Position (Balance Sheet)  Fits onto one page  Uses columns for context  Creates mini-balance sheets showing what is available for operations, board-designated  Separates restricted balances  Compares to prior year  Notes provide explanations of significant balances Notes A B C D E

Two gov't grants; payments expected within next 3 months. Deposits for rent and utilities Deferred Revenue; Pass through (funds temporarily held for others) Non-liquid fixed assets net of any related debt; purchase authorized by board Grant for next fiscal year

Current Year TOTAL to 3/31/16 ASSETS Current Assets Checking/Savings Accounts Receivable Other Current Assets Total Current Assets Fixed Assets Building & Improvements Furniture & Equipment Accum. Depreciation & Amort. Total Fixed Assets Other Assets

TOTAL ASSETS

60,516 192,834 2,010 255,360

3,500 3,500 -

Unrestricted Key Board Temp to Operations Designated Restricted Notes

25,516 192,834 2,010 220,360

-

258,860

220,360

2,440 10,233 15,189 27,862

2,440 10,233

27,862

27,862

192,498 25,000 3,500 220,998 10,000 230,998

192,498

25,000

10,000 A B

25,000

10,000

12/31/15

50,516 192,834 2,010 245,360

3,500 3,500

-

28,500

10,000

248,860

-

-

2,440 10,233 15,189 27,862

-

-

27,862

3,500 3,500 -

LIABILITIES & EQUITY Liabilities Current Liabilities Accounts Payable Payroll Liabilities / Accrued Wages Due to / Due from Operating Reserve Other Current Liabilities Total Current Liabilities Long Term Liabilities/Mortgage Total Liabilities Net Assets Unrestricted UR-Undesignated UR-Board Designated Reserve UR-Property, Plant & Equipment Total Unrestricted Temporarily Restricted Total Net Assets

TOTAL LIABILITIES & NET ASSETS

258,860

15,189 27,862

C

25,000 3,500

D

192,498

28,500

-

192,498

28,500

10,000 10,000

220,360

28,500

10,000

E

121

@Model created by Elizabeth Foley

Prior Year

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194,998 15,000 3,500 213,498 7,500 220,998 248,860

Accounting Changes Ahead (2018) FASB – Liquidity and Coverage (Quantitative & Qualitative) Quantitative: Availability of financial assets to meet cash needs for general expenditures within one year of balance sheet date Qualitative: How a nonprofit manages its available liquid resources

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Accounting Changes Ahead (2018) FASB – Liquidity and Coverage (Quantitative & Qualitative) Quantitative: Availability of financial assets to meet cash needs for general expenditures within one year of balance sheet date Qualitative: How a nonprofit manages its available liquid resources

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Cash Flow ALIGNED with budget structure TIMELY within 5 days of end of month PAST actuals  accuracy of budget assumptions  What do we need to change…  Annual trends in operating fund availability

FUTURE projections  basis for year-end positions  Any bad news on the horizon…  Plan future expenditures and payments

Projections are People Powered!!! Provided on behalf of

Strategies and Statements • Financial Sustainability

• Use of resources Use of unrestricted funds

Cash Flow

• Revenue generation

Statement

of Position

Statement of Activity

• Mission fulfillment

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Financial Reports and Audiences With your table… • How do you encourage financial statement literacy for your staff and use that knowledge day-to-day? • What works for your organization in tailoring board financial statements to encourage strategic discussions and appropriate monitoring? (What’s the role of the finance committee?)

A9. Staff and board clearly understand the organization’s overall financial performance by reading its financial statements and reports Worksheet (p.11) Provided on behalf of

Standard External Financial Reports Reports

• Audit (Review, Compilation) • A133 Audit • 990 – IRS Nonprofit Organization Information Return • Annual Report

Recipients

• Government

Nonprofit organizations have a legal obligation to make financial statements public. Taxpayer Bill of Rights 2 requires all 501(c)(3) organizations to send the 3 most recent 990s upon request. 990s are posted on-line at www.GuideStar.org. Senate Finance Committee – SOX has resulted in some additional reporting requirements for accountability.

• Federal • State • Local

• General Public • Donors • GuideStar

Funding Sources and other Special Audiences Provided on behalf of

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Understanding Analytic Ratios Liquidity Measures  Months cash on hand  Net working capital  Current ratio

Profitability Measures  Surplus Margin / Profit Margin  Return on Assets

Sustainability Measures  Net Assets Comp  Leverage  Reserve Ratio

Efficiency Measures  Program, fundraising  % Program expense covered by program revenue

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Analytic Reports: Ratios Dec 31, 15

Dec 31, 15

Dec 31, 14

$ Change

% Change

Total Equity

954,922

92%

228,137

726,785

319%

TOTAL LIABILITIES & EQUITY

1,042,152

100%

280,906

761,246

271%

Coverage (Cash:Current Liabilities) $

4.79

$

3.56

$

1.23

35%

Coverage (Current Assets:Current Liabilities) $

10.78

$

5.67

$

5.11

90%

Accts Receivable Aging Current

Accts Payable Aging

Operating Reserves Coverage

1 - 30

31 - 60

61 - 90

> 90

TOTAL

15,855

465,000

0

0

0

480,855

12,485

0

0

0

0

12,485

0.18

~ Two Months

FY 14 Expense= 456,845

= Available Unrestricted Net Assets/ Annual Expense

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Analytic Reports: Graphs Individuals

$80,000 $60,000 $40,000 $20,000 $% of Target Board Non-Board Target

1 1 1 1 1 1 1 Aug109 4% 1 $1,000 1 $2,000 $3,500 1 1

Oct 09

Dec 09

Feb 10

Apr 10

13%

34%

49%

0%

$3,000

$9,000

$14,000

$-

$6,000

$15,000 $20,000

$-

$10,500 $21,000 $42,000 $56,000

1 1 1 1 1 1 1 Jun 1 10 10% $1$$70,000 1 1

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Analytic Reports: Graphs Net Assets

100%

A conversation about successful debt reduction

50%

Accts Payable Aging FYE 08-11

0% FY8

FY9

Unrestricted Undesignated Property and Plant

FY10

FY11 Operating Reserve Restricted

FY12

250,000 200,000 > 90

150,000

Tackling the net assets composition discussion.

61 - 90 31 - 60

100,000

1 - 30 Current

50,000 2008

2009

2010

2011

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Analytic Reports: Trends Income Sources 2008 - 2012

Expenses 2008-2012

1000000

600,000

900000

500,000

800000 700000

400,000

600000

300,000

500000 400000

200,000

All other expenses held basically steady

300000 200000

100,000

100000 0 Dec 31, 08

Dec 31, 09

Dec 31, 10

Dec 31, 11

Dec 31, 12

FY 2008

FY 2009

FY 2010

FY 2011

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FY 2012

Analytic Reports: Industry Analysis

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A10. The board uses financial reports to assess the organization’s strategies for mission fulfillment and financial sustainability. A11. Staff use financial data about organizational performance to evaluate and improve programs and operations. Worksheet (p.11) Provided on behalf of

Why a Dashboard? “Not everything that can be counted, counts. And not everything that counts can be counted. What gets measured gets done!” Jeanne Bell ~ LISC webinar

A Dashboard is a picture of what matters and should be getting fiduciary attention Provided on behalf of

Key Questions a Dashboard Helps Answer

What are we doing? (execution)

How well are we doing it? (effectiveness& efficiency)

What difference is it making in our community and for whom? (benefit)

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Dashboard Elements/Attributes What?  Agreed upon success indicators  Agreed upon measurable targets  Trend analysis

Why?    

Goes beyond financial measurement Ties to strategic plan/ budget Attends to what matters most to the organization now Broad staff / board audience Provided on behalf of

Dashboard “Dials” – Things to Watch Program Metrics Human Resources/Volunteers Financial Metrics Fundraising & Revenue Targets  Service Level & Quality Targets  Compliance/Risk Management  Governance    

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Dashboard Strategy – It’s about the Thinking Start with…your goal not your data What types of decisions and actions do you want your leaderhip engaged in? What do they need to feel, be able to do, have, and/or understand in order to do those things

What knowledge-base, information, and opportunities will support them in this Provided on behalf of

Dashboard Design Design to a single screen/page

• Make it a single page if possible • If it’s too big to fit, change the level of detail or create sub-Dashboards.

Ensure adequate context

• Choose your comparison carefully – Projections? Standards? Time? Quality?

Use an appropriate level of detail

• Get to the heart – skip the detail. • Don’t clutter with unnecessary information • Limit to key indicators relevant for that level of dashboard.

Keep design simple

• Use design & color judiciously. • Mix visuals and data tables. • Usability is key! Provided on behalf of

Example of a Simple Dashboard For Example: Finance Metrics After: Visualized Data

Before: Standard Statements Indicator

Target

6 months ago

3 months ago

Today

Days of cash on hand

90

25

57

120

Net surplus or YTD compared with YTD budget.

$0

$10,000 Better

<$5,000 $2,500 > Worse Better

Total expenses

On Budget

$ 5,000 Worse

$1,000 Better

On Budget

Days from end of month to financial statement completion

45 days

65

52

40

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Dashboard Example: Budget Comparison

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Dashboard Example: Transactions and Outputs

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Dashboard Example: Linking to Outcomes

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Neighborworks America Infographic

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Dashboard Example: Mixed Format

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Dashboard – For Your Organization? What gets measured gets attention… At your tables,  Do you currently provide a dashboard summary of key measures? How were the measures agreed upon?  How might you restructure the board’s financial statement discussions using a analytic tools?  How might a dashboard measure both mission and financial sustainability for your organization? Worksheet (p.12) Provided on behalf of

Measuring Efficiency & Effectiveness Cost-Effectiveness of Efforts A measure of the cost per unit change of a specific outcome in comparison to alternative options (value for one impact at a time) Benefit of Knowing  Compelling statement linking programs and financials  Assesses the comparative costs of achieving the same benefit in other ways  Contributes to good internal decision-making about how the organization invests its assets Provided on behalf of

Measuring & Comparing Cost Effectiveness Determine the cost/unit change in a specific outcome 1. Choose a key outcome (i.e. high school graduation, # of low income housing units built, family purchases first home, etc.) 2. Determine investment of assets ($ value) required to achieve that outcome 3. Identify an alternative/ comparative model and its cost 4. Compare using matrix Provided on behalf of

Determining Cost Effectiveness In comparison to other options (A) is …   costly and = or  effective (B1)   effective and  costly, but the additional benefit is considered worth the extra cost (B2)   effective and  costly, when the added benefit is not considered worth the extra cost (B3) B2 A B1 B3 Provided on behalf of

Cost-Effectiveness Storytelling THE IMPACT If 50% of elderly adults who receive in-home care from Jewish Social Services Agency (JSSA) in Maryland were instead placed in nursing homes, the total annual cost would be 15 times higher – or $96 million a year – than the $6 million it costs for JSSA to provide services and keep those 1,000 elders in their homes. THE IMPACT When the transitional housing program at Friends of Guest House helps a woman released from prison re-enter society successfully, it costs the community 65% less than if she went back to prison for one year. *Source: Nonprofit Montgomery Beyond Charity Report

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Measuring Community Benefit - Outcomes Return on Mission A measure of the net benefit to society, inclusive of all outcomes, often described as a mission rate of return or return on investment

Benefit of Knowing  The process “monetizes” outcomes  Creates clear linkages between your work and community health (social, economic, environmental) Provided on behalf of

Determining Return on Mission

Start with Logic Model

Research Costs, Benchmarks

Institute Measurements

Tell the Impact Story

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Mission Outcomes: ROM – A Richer Story THE IMPACT In 2006, the Coalition for the Homeless in DC helped 333 formerly homeless people get jobs, resulting in annual taxable incomes of more than $4.8 million. THE STORY BEHIND THE IMPACT The Coalition moves several hundred homeless people into permanent housing each year and it knows that stable, living wage employment is key to solving homelessness. When Abt Associates in Bethesda studied a similar program for homeless job seekers in 2003, it found that the benefits to government, through reduced transfer payment program costs and increased tax revenues, exceeded the costs of the services over a five-year period.

*Source: Nonprofit Montgomery Beyond Charity Report

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A12. The organization has the programmatic and financial systems to make clear statements about our costeffectiveness and return on the investment we make in our programs.

Worksheet (p.13) Provided on behalf of

Workshop Focus Areas Purpose Leadership & Strategy Assets & Allocation Planning & Budgeting Performance Reporting & Communication Sustainability Integrity & Risk Provided on behalf of

Making Financial Leadership Possible Financial Leadership relies on…  Focus on Ends first AND then the Means that get there  Articulated common goal(s) = community benefit  Clear approach/strategy  Strong models of how assets are acquired and utilized  Accounting infrastructure that aligns with models  Communication tools that provide feedback on the above  Leadership & Time to discuss implications Provided on behalf of

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Anatomy of Risk – Know the Commitment Every Decision Is a Commitment A commitment to something we will do in the future  Do we understand the commitment?  Do we understand what it will take to honor it?  What may compromise our ability to honor it? Provided on behalf of

Anatomy of Risk: Understand Source Structural Risk

Environmental Risk

Program expansion Staff growth Benefits obligations Capital liabilities Org Culture Systems

Economy Regulation Funders Shifts in demand Reputation Acts of God Provided on behalf of

Low Risk High Cost

On Org

Approaching Risk Management

High Risk High Cost

Low Risk Low Cost

Impact

Likeliness of Risk High Risk Low Cost

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Understanding and Mitigating Risks to Integrity In teams, explore a risk scenario  How might we end up in this predicament?  What is at risk when the following happens?  What would need to be in place and/or need to happen within the organization to ensure integrity in this area (i.e. it doesn’t come to this)? community outcomes are not clearly understood and are not used to shape financial actions and decisions

leadership doesn’t understand how assets are acquired and allocated to achieve goals

infrastructure investments / expenditures are not tracking with organizational growth

the financial systems and data are not robust, accessible, or meaningful

(outcomes)

(business model)

(infrastructure)

(systems)

Worksheet (p.13)

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A13. The organization has a strong understanding of potential risks to advancing and sustaining financial and mission goals A14. Leadership effectively manages existing / potential risk Worksheet (p.14) Provided on behalf of

An Organization’s Biggest Asset

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Primary Fiduciary Responsibility/Commitment

Are we effectively and efficiently using the resources/assets the organization acquires to advance community benefit and achieve our outcomes in a manner that is sustainable over time Provided on behalf of

Integrity Understanding the goals – values & outcomes (vision) Knowing how the organization achieves them (program & business models) Ensuring the efficacy of what happens (execution)

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Organizational Wellness & Sustainability Leadership

Infrastructure

Vision Advancement

Programs

Assets

© Orgforward

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Organization-Wide Sustainability Leadership Sustainability

The ability to identify, recruit, and cultivate the leadership necessary to plan, develop strategy, carry out our approach, and make decisions that advance our vision of community benefit**

Programmatic Sustainability

The ability to develop, mature, and eliminate programs to ensure efficacy, alignment with approach (mission), and advancement of vision*

Asset Sustainability

The ability of the organization’s business model to attract and allocate resources to meet current mission execution needs while establishing a foundation for the future*

Infrastructure Sustainability

The ability to establish infrastructure and enact policies and procedures that support effective decision making, mitigate risk, ensure efficient operations, and support succession**

*Modified from Bell, et.al. – Nonprofit Sustainability ** Orgforward Sustainability Model

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A15. Financial conversations regularly include discussion of organizational sustainability & wellness (ability to advance vision and mission), not just financial viability (how to keep the books balanced and doors open) Worksheet (p.14) Provided on behalf of

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Financial Leadership – Connecting Dots • Encourage Dialog / Conversation • Set Context – Explicitly Link Finance to Vision & Strategy (Means vs Ends) • Connect Systems - Finance and Programs • Broaden Financial Knowledge • Build Accountability • Focus on Sustainability

Don’t need to be financial scholars, just financially literate Provided on behalf of

Sustaining Financial Leadership -> Integrity To engage in financial leadership an organization requires: Focus on Ends first AND then the Means that get there Articulated common goal(s) = community benefit Clear approach/strategy Strong models of how assets are acquired and utilized Accounting infrastructure that aligns with models Communication tools that provide feedback on the above • Leadership & Time to discuss implications • • • • • •

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Necessary Partnerships

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The Financial Leaders Who are the financial leaders within your organization?    

Board Treasurer ED / CEO Finance Committee Members Senior Management / Directors

How do they contribute to financial leadership Provided on behalf of

Leadership Roles

Treasurer Finance Committee Audit Committee CEO

COO/CFO Finance Director Senior Management External Auditors

What do you need them to do?

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Key Questions - Culture of Financial Leadership As a leader, are you …  Encouraging & Ensuring Literacy  Empowering through responsibility and accountability  Creating space

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Action Planning Time – Our Next Steps

 Discuss strategies that you use (or would like to use) to ensure finance and non-finance people engage one another in effective and productive communication to collectively work towards achieving mission outcomes

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Action Planning Time – Our Next Steps  Discuss strategies that you use (or would like to use) to ensure … A16. Leadership (board and staff) clearly understand their fiduciary responsibilities to the organization A17. There is a high level of financial leadership throughout the organization (i.e. financial leadership is shared across multiple staff and board members) Worksheet (p.15) Provided on behalf of

Reflection

• • • •

Your Biggest Take Away What jumps out What Aha did you have What question(s) are coming up for you

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At the End – Let’s Revisit The Ends Imagine if you had stronger financial processes and systems (that they were all at 100%) … • What would be different in the organization? • What would you see more of going on and by whom? • What would that make possible for you and the organization? Provided on behalf of

Course Evaluations Instructor 1 Name: __Justin

Pollock _______

__152425______________  Only use BLACK/BLUE ink or pencil.  FILL IN THE BUBBLES - Do NOT circle the bubbles. - Do NOT X the bubbles out.

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