We all know that local conditions vary. There are many factors that impact your nonprofit, such as your funding sources, field of service, and the needs of your constituents. The Minnesota Council of Nonprofits and Minnesota Council on Foundations have updated information on how the economy is affecting funders and Minnesota nonprofits in general. The most useful information is what is happening on the ground at your nonprofit - the "hyperlocal" conditions. As Kate Barr says in the Winter 2010 issue of Nonprofit Quarterly:
"In all forecasts, 'local conditions vary,' and the most relevant information is the situation at an individual nonprofit organization. Only by clearly understanding its own financial position, strengths, and risks can a nonprofit develop strategies to respond to the economy and plan for the future."
Assess Your Nonprofit's "Hyperlocal" Conditions
How can you get a handle on these conditions? Our Assessment of Recession Risk and Preparedness for Nonprofit Organizations is a tool designed to help you quickly assess your organization. By answering these 20 questions, you will identify potential risk factors, immediate priorities, and proactive steps to take right away.
This tool is designed to lay the groundwork to help your organization take action when necessary. It is first step, not an in-depth organizational assessment. Whatever your starting point, the Recession Preparedness Assessment provides useful information to help you develop strategies and approaches to respond to the economy and plan for a sustainable future.
Operating Reserves
One way that nonprofits have been coping with uncertainty in their income streams while continuing to deliver services is taking advantage of operating reserves. An operating reserve is an unrestricted fund balance set aside to stabilize a nonprofit's finances by providing a cushion against unexpected events, losses of income, and large unbudgeted expenses. They can help you weather serious bumps in the road by buying time to implement new strategies.
To help organizations think through how to prudently manage their reserve funds, we have created an Operating Reserves Overview and Policy Example. This resource will help you assess when using reserves make sense, consider how to replenish reserves, understand different types of reserves, and begin crafting a policy that makes sense for your organization.
Training Update
A New Training Partnership
Nonprofits Assistance Fund is pleased to announce a partnership with the Minnesota Council of Nonprofits to deliver financial management trainings in 2010. It is a great opportunity for us to fulfill our mission of building financially healthy nonprofits by allowing us to provide training to more organizations in the Twin Cities metro and in Greater Minnesota. This collaboration also ensures that MCN's member organizations have access to expert, affordable training on nonprofit finance. By building on the strengths of both organizations, we will be able to deliver the highest quality financial management trainings to nonprofits all over Minnesota. It will also give us additional capacity to develop new workshops, webinars, and resources to meet changing needs and address emerging issues.
We look forward to this expanded partnership and are excited about how it enhances our training program.
For more information about upcoming trainings, visit our workshop calendar or MCN's events. To register for a training please contact MCN.
Upcoming Workshops and Training Events
This webinar will help you develop sound financial policies and effective internal controls. Learn more.
Monday, February 22nd
2:00 - 3:00 pm
Register
Nonprofit finance has unique rules, conditions, and terminology. This session will provide an introduction to financial reports, the accounting rules governing restricted funds, and nonprofit reporting requirements. Learn more.
Tuesday, February 23rd
9:00 am - 12:30 pm
MCN
Register
This year, the Financial Management Network lunch series will be held at MCN. Nonprofits Assistance Fund staff will continue to facilitate these free sessions where financial leaders can explore different topics. We hope you can join us at MCN on Wednesday February 24th to discuss how to Balance Financial Leadership by working with board, staff, and contractors. The network runs from noon until 1:00pm. No RSVP is required, just bring your lunch, your business cards, and your ideas.
Visions Realized: Realizing New Ways to Serve
Established in 1975, African American Family Services (AAFS) is committed to serving individuals, families, and the wider community with excellence. AAFS provides accessible, community-based and culturally specific chemical health, mental health, and family preservation services.
Changes in the costs of providing mental health services over the past few years required some organizational adjustments. AAFS owned and operated facilities across the metro, spending a large portion of the budget on operating and maintaining these facilities, rather than client services. Lissa Jones, Executive Director, assessed the operations. She and the board decided to consolidate, allowing them to address changes in their service area and improve financial management. Streamlining operations also allowed AAFS to trim their budget and leverage some of the properties to create a reserve fund.
Nonprofits Assistance Fund approved a loan to help finance the project. Board members joined Lissa at each loan closing, enhancing their financial understanding. "Nonprofits Assistance Fund appreciated where we were coming from and built a relationship with us. It would have been much more difficult to navigate our finances and make this transition without that support."
Through hard work and consolidation, AAFS has a reserve fund that will allow the organization to continue to provide excellent, accessible, and culturally sensitive service to the African American community. With increased financial and operational flexibility and stronger management systems, Lissa and the board are focused on a strategic plan for the future.
If your organization is in transition, Nonprofits Assistance Fund can help. Contact Nonprofits Assistance Fund at 612-278-7180 or info@nonprofitsassistancefund.org to begin a conversation about your organizational needs.
To learn more about AAFS, read Saving an agency by shrinking it in the Star Tribune.
From the Blogs
About Us
New Loan Fund Capital Enhances Lending Ability
Nonprofits Assistance Fund is pleased to announce that it has received new loan fund capital from TCF Bank and Calvert Foundation. These funds expand our ability to lend to Minnesota's nonprofit organizations.
Nonprofits use loans and lines of credit to manage their cash flow and be proactive with their financial plans. Credit is also a tool organizations can use to cope with changes in the timing of reimbursement payments. TCF's $400,000 in loan fund capital will help Minnesota's charter schools navigate changes in the state payment structure. Calvert's $250,000 Program-Related Investment (PRI) bolsters our overall loan fund.
As the economy slowly rebounds, our ability to provide timely access to credit with flexible terms and conditions is particularly important. Nonprofits Assistance Fund is an important resource for Minnesota's nonprofit organizations, especially since traditional sources of credit remain constrained. With the support of community partners, such as TCF and Calvert, we will continue to meet the specific financing needs of nonprofits.
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