Weaving Financial Data Into
Your Grantmaking Process:
Interpretation and communication with Financial SCAN
Scott Menzel
Pr...
AGENDA

Introduction to Financial SCAN
New Feature Overview
Brief Online Tour
Case Analysis
Q&A
When it Comes to Nonprofit Finance,
Funders Face Common Challenges
 Knowing which metrics to focus on for assessing

fina...
Financial SCAN: A New Analysis Filter
on 990 Data

Sound Financial Health
Strong Organizations
Quality Programs
Effective ...
Financial SCAN at a Glance

What: Data platform for assessing nonprofit financial
Data platform for assessing nonprofit fi...
What’s in a Financial SCAN?
Organizational Dashboard: Five
years of key financial trends and ratios
Graphs & Explanatory T...
How are Funders Using Financial
SCAN?
 Adds, strengthens and/or focuses

financial component of due diligence

 Helps id...
Financial SCAN 2.0: New Features!
 Excel Download
 Peer Group Comparison
 Customized Enterprise Access
 7 Day Nonprofi...
Brief Online Demonstration
Key Considerations: What 990 data can and
cannot do
990 data CAN help:


Understand an organization’s financial trajector...
Meet Today’s Case Organization:
REAL WORLD SKILLS


MISSION: To prepare underserved youth for lasting
careers and self-su...
REAL WORLD SKILLS
Dashboard: Income Statement
Dashboard: Balance Sheet
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
Topics Explored in
Financial SCAN Graphs:
 Expense detail & composition
 Revenue detail & composition
 Profitability
 ...
With the exception of 2008, surpluses
and deficits have been close to breakeven
But are surpluses
adequate to build
financ...
RWS’s liquidity has fluctuated somewhat over
the period, but has been consistently tight

Available liquidity represents a...
Observations & Recommendations for
REAL WORLD SKILLS
Observations from Financial SCAN:
 Modest growth over last several y...
Q&A
Thank you!
Peter Kramer
Manager, Advisory Services
Nonprofit Finance Fund
617-204-9772
peter.kramer@nffusa.org

To learn m...
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GuideStar Webinar (12/10/13) - Weaving Financial Data Into Your Grantmaking Practice

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Connecting money and mission can be difficult in the nonprofit sector. Ensuring that funding decisions advance mission and can be appropriately stewarded requires a solid grasp of nonprofit resource needs and financial health. Financial SCAN is a quick, clear, and comprehensive online analysis tool that illustrates a nonprofit’s financial picture through a dashboard of relevant indicators, thirteen detailed trend graphs, and a peer comparison function.

Join us for a one-hour webinar to see Financial SCAN and its new features in action. The session will take a case study approach, exploring how you can use Financial SCAN’s multi-year and peer financial data in your grantmaking practice.

Presenters: Peter Kramer, Manager, Nonprofit Finance Fund, and Scott Menzel, Product & User Experience Manager, GuideStar USA (moderator)

Published in: Economy & Finance, Business
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GuideStar Webinar (12/10/13) - Weaving Financial Data Into Your Grantmaking Practice

  1. 1. Weaving Financial Data Into Your Grantmaking Process: Interpretation and communication with Financial SCAN Scott Menzel Product & User Experience Manager GuideStar Peter Kramer Manager Nonprofit Finance Fund December 10, 2013
  2. 2. AGENDA Introduction to Financial SCAN New Feature Overview Brief Online Tour Case Analysis Q&A
  3. 3. When it Comes to Nonprofit Finance, Funders Face Common Challenges  Knowing which metrics to focus on for assessing financial health  Having the time and skills to collect, parse and apply financial data to inform grantmaking decisions  Fostering a candid dialogue with grantees about financial health and resource needs
  4. 4. Financial SCAN: A New Analysis Filter on 990 Data Sound Financial Health Strong Organizations Quality Programs Effective Solutions Financial SCAN demystifies nonprofit data and illuminates nonprofit financial health, providing the field with knowledge and tools for building and sustaining healthy, effective organizations.
  5. 5. Financial SCAN at a Glance What: Data platform for assessing nonprofit financial Data platform for assessing nonprofit financial WHAT health and fostering dialogue among all stakeholders health, making data driven decisions, and involved in making social impact strengthening grantmaker-grantee dialogue Who: Private and public grantmakers/donors, Nonprofit organizations, private and public WHO nonprofit organizations, philanthropic advisors, grantmakers, individual donors, philanthropic consultants and advisors, and consultants media Draws data directly and automatically from How: Private and public grantmakers/donors, IRS Forms 990,* presenting complex nonprofit organizations, philanthropic advisors, HOW consultants and information in an easy-to-analyze and media communicate format (313K orgs) *Note: Financial SCAN does not include data from Forms 990 EZ
  6. 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. 7. How are Funders Using Financial SCAN?  Adds, strengthens and/or focuses financial component of due diligence  Helps identify financial strengths and red flags  Informs conversations among grantmakers and their grantees about financial health and needs  Saves time and resources “This innovative new tool builds the financial management capacity of nonprofits and helps grantmakers engage with their grantees about financial health and funding needs.” Kathy Reich, David & Lucile Packard Foundation
  8. 8. Financial SCAN 2.0: New Features!  Excel Download  Peer Group Comparison  Customized Enterprise Access  7 Day Nonprofit Access
  9. 9. Brief Online Demonstration
  10. 10. Key Considerations: What 990 data can and cannot do 990 data CAN help:  Understand an organization’s financial trajectory and recent revenue, expense, and balance sheet dynamics  Show how an 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. 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. 12. REAL WORLD SKILLS
  13. 13. Dashboard: Income Statement
  14. 14. Dashboard: Balance Sheet
  15. 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. 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. 17. With the exception of 2008, surpluses and deficits have been close to breakeven But are surpluses adequate to build financial resilience? RWS has effectively managed this growth by consistently covering its operating costs to achieve marginal surpluses
  18. 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. 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, few fixed assets  Tight liquidity constrains ability to innovate Recommendations for Funders:  Acknowledge strengths (e.g., reliable revenue, surpluses in most years, etc.) and encourage business planning in strategy process  Discuss with RWS leadership the amounts and types of capital needed to help the organization build working capital and reserves and adapt to the changing job market
  20. 20. Q&A
  21. 21. Thank you! Peter Kramer Manager, Advisory Services Nonprofit Finance Fund 617-204-9772 peter.kramer@nffusa.org To learn more: www.guidestar.org/financialSCAN nonprofitfinancefund.org 20
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