How can nonprofit leaders advance their missions by using financial data in their planning and decision-making? What are the "right" financial indicators on which to focus? In this one-hour webinar, we will undertake a comprehensive analysis of one organization's financial health, using the Financial SCAN platform developed by Nonprofit Finance Fund (NFF) and GuideStar. Through this case example, we will address the ways in which nonprofit leaders can use financial trends and comparisons to inform future plans and engage with stakeholders. Presenters: Peter Kramer, Manager, Nonprofit Finance Fund, and Scott Menzel, Product & User Experience Manager, GuideStar (moderator)

1. Peter Kramer
Manager
Nonprofit Finance Fund
Scott Menzel
Product & User Experience Manager
GuideStar
May 30, 2013
Insight Beyond Compliance:
What 990 data can say about
your organization’s financial health

2. AGENDA
 Re-orienting to the Form 990
 Case analysis using Financial SCAN
 Brief online tour
 Q & A

3. From Form 990 Instructions:
Momentum is growing to make 990 data even more
readily available
A compliance document AND
a public profile for many nonprofits

4. How can nonprofit leaders put the Form
990 to better use?
 Understand your organization’s story as told
publicly by Forms 990
 Use the 990 data (which must be compiled
anyway!) to conduct analysis of past financial trends
 Communicate with stakeholders about how
these trends inform current plans and resource
needs

5. 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

6. Today, our analysis guide will be
Financial SCAN
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, decision making, 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 (313K orgs)
*Note: Financial SCAN v. 1.0 does not include data from Form 990 EZ

7. 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:
Comparison with up to five peer
nonprofits you select

8. Meet today’s case organization:
Help for Homeless Youth
 MISSION: To provide homeless and at-risk youth with
the resources, relationships, and skills to become self-
sufficient.
 PROGRAMS:
 Health Services
 Case Management
 Drop-in Center
 Basic Employment Skills
 RECENT DYNAMICS:
 Increased demand for services
 Uncertain revenue sources
 Maintaining an aging facility

9. Help for Homeless Youth

10. Dashboard: Income Statement

11. Dashboard: Balance Sheet

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Peer Comparison Dashboard
 Standardized 990
fields allow for side
by side comparison
 Contrasts operating
and balance sheet
characteristics
 Offers broader
environmental
context for
consideration

13. 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

14. Estimated full costs have not been
consistently covered, limiting HHY’s ability to
satisfy longer-term organizational needs
Full costs include: operating expenses, covering
depreciation, purchases of fixed assets, debt principal
payments, and savings

15. Asset composition has shifted over time,
reflecting a decline in liquid assets and
growth in fixed assets
Facility ownership is its own line of business, and can
sometimes be at odds with other organizational needs.

16. While HHY’s assets have grown over the
period, its liquidity has contracted
Available liquidity represents a nonprofit’s ability to
handle risks and seize new opportunities.

17. Next steps and considerations for
Help for Homeless Youth
 Reflect: What activities have been contributing to
recent deficits? Evaluate mission/financial trade-offs
within each program area.
 Work to build budgets that account for full costs and
better anticipate revenue volatility
 Engage board of directors regarding need for facility
reserve to care for aging fixed assets
 Discuss with funders how growth has impacted
liquidity and need for rebuilding working capital

18. Brief demonstration of online interface

19. Q&A

20. nonprofitfinancefund.org 19
Thank you!
Peter Kramer
Manager, Consulting Services
Nonprofit Finance Fund
617-204-9772
peter.kramer@nffusa.org
To learn more:
www.guidestar.org/financialSCAN