Nonprofits Count June

 


 






     

June 2007

We're half way through 2007 and now is a good time to make sure you're on track for the year. Continue reading to learn about the upcoming summer workshops and to learn more about
cash flow.
This issue of Nonprofits Count:
  • How Does Your Cash Flow?
  • Helping Nonprofits Thrive - Family Focus
  • Upcoming Workshops
  • NAF News

Mid-year Check-in: How Does Your Cash Flow?

2007 is half way over and now is a good time to take a close look at your cash flow to make sure you are on track for the year. While standard nonprofit financial reports – the budget, income statement and balance sheet – provide important management information, these statements alone do not tell whether there is enough cash on hand to pay the bills and payroll.


Why is it important to manage cash flow? When should it be managed and how? One strategy for managing cash flow is to manage the timing – this can be done by speeding up receipt of income and slowing down payments. The answers to these questions and more strategies can be found on the NAF Web site.

The earlier you anticipate cash flow issues, the easier it is to address them. The most effective way to manage cash flow is to develop and maintain cash flow projections that look forward 12 months. NAF has developed a Cash Flow Projections Template to provide nonprofits a general framework with built-in calculations.

 

Helping Nonprofits Thrive - Family Focus

Managing the finances of a nonprofit agency is often a skilled juggling act. Timing can be everything. If one source of revenue doesn’t come in at the right time, it can put the rest of the nonprofit’s operations at risk, especially for a start-up.

In 2000, a small group of professionals and mothers wanted to make a difference in family and foster care services for at-risk youth in Minnesota and started Family Focus. Initially, Family Focus was able to obtain lines of credit from the bank, but as the organization grew so did the need for additional credit. The bank suggested Family Focus work with Nonprofits Assistance Fund (NAF) and apply for a small loan to hold the organization over until it receive payments from other counties.

Four years later, in the spring of 2005, Family Focus was unable to obtain credit from the bank that it had always depended on and turned to its friends at NAF. Working with loan officer Janet Ogden-Brackett, NAF served as an advocate for the organization and granted a loan to consolidate some of its debt.

“I have no idea what we would have done without Janet’s help,” said Dave Kise, chief financial officer, Family Focus. “It was a really stressful time – the kind of stuff that keeps you awake at night – but Janet advocated for us and we ended up with a better banking arrangement.”

This inspiring story can be found, along with many others, on the NAF Web site.



Upcoming Workshops

Once a month, Nonprofits Assistance Fund (NAF) offers a financial management brown bag discussion over the lunch hour at no cost. Topics range from Using Loans and Credit Lines to Special Events Financial Management and take place on the fourth Wednesday of every month from noon – 1 p.m.

If you are currently working in a nonprofit doing finance-related work, you are invited to join this informal discussion and information-sharing group. Participants are encouraged to bring questions, samples and insights related to the topic of the day. Upcoming brown bags for the summer include:
• June 27 – Managing and Reporting In-kind Gifts
• July 25 – Special Events Financial Management
• August 22 – Investment Policies

All brown bags are provided at no cost and no RSVP is necessary – just bring your lunch and be ready to participate.
NAF is offering two half-day workshops this summer as well:

Nonprofit Budgeting: Beyond the Basics - July 10, 2007 - Minneapolis
This workshop examines the roll and function of budgets and explores a variety of budget approaches and strategies. Take your practical budgeting knowledge to the next level.

Financial Leadership for Executive Directors – August 7, 2007 – Minneapolis
Participants will discuss how to establish a culture of financial responsibility and accountability and how to define and manage appropriate roles and responsibilities for financial functions. Executive directors only.

Click here for more information on upcoming workshops.

Nonprofits Assistance Fund News

Over the past 10 years, Minnesota has worked to expand efforts to provide health care to vulnerable populations, at the same time, funding cuts and reimbursement delays have had a serious impact on primary care providers. With a program-related investment (PRI) funds from The Robert Wood Johnson Foundation, Nonprofits Assistance Fund (NAF) has been able to step in and help these organizations with the day-to-day and long-term financial sustainability of community-based providers.

NAF’s Minnesota Primary Care Loan Fund (MPC) has been an effective tool for leveraging funds from The Robert Wood Johnson Foundation with local lending from institutions and technical expertise to strengthen the health care safety net in Minnesota. Initially a new and innovative approach to funding clinics in underserved rural and inner city communities, the PRI funds are now an established and valuable lending tool to meet the short-term cash flow, long-term working capital and the facility/equipment needs of community health centers.

NAF initially received a 10-year, 2 percent interest loan of $1 million from the foundation. In the 10 years from April 1997 to March 2007, MPC made 30 loans to 14 agencies. Totaling $3,442,000 using PRI capital from the RWJ Foundation, these loans have been matched by $11,808,000 from local banks, foundations and public agencies for a total project financing of $15,250,000.

Due to the enormous success of the loan fund, the RWJ Foundation has agreed to extend the loan program for another five years - through 2012 – with a $1million PRI.

This program has benefited many local health communities including Apple Tree Dental, Cedar Riverside People’s Center, ELEAH Medical Center, The Storefront Group, West Side Community Health Services and the Women’s Health Center of Duluth.

Nonprofits Assistance Fund is a nonprofit community development organization that fosters community development and vitality by building financially healthy nonprofits. Nonprofits Assistance Fund provides financing for working capital, cash flow, equipment and facilities projects with a focus on strengthening the operation and mission of nonprofits. We also offer financial management workshops and advice that improve nonprofits' capacity to carry out their mission.