First Thoughts

Arts Finance. Building stronger nonprofits.

I’m sorry … who are you again?

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Patron and donor cultivation is always a critical topic, and this month’s thoughts take root in works recently produced by two of my associates, Bruce Thibodeau of Arts Consulting Group and Joseph Truskot. Bruce has a piece entitled “Strategic Fundraising through Objective Research: Understanding Donor Capacity”, and Joe has initiated a program entitled “Staccato”, a series aimed at building the …

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Gimme an “l-l-o-c-a-t-e”!

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Allocation methodologies. Follow this link to a spreadsheet demonstrating how this function can work for your organization. First, your org must decide upon an appropriate “use of resources” model. Tracking a set of patterns governing the use of material resources allows the application of those “use patterns” upon predefined sets of overhead expenses. The sample spreadsheet demonstrates the allocation of …

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Gimme an “A”!

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Allocating expenses is by no means a necessity, unless of course, your organization is on the receiving end of funding that requires allocation. Federal funding is known for this requirement, as are other public sources of support. But regardless of whether or not your organization is mandated to allocate expenses, as a procedure, it does have its benefits. But let’s …

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Budget! Actuals! Projections!

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Here are a few things to keep in mind as you’re sorting through these three sets of numbers. Budgets are certainly the critical framework for any org’s financial activity. They are, in essence, Board approved projections of anticipated revenues and expenses, established before the start of your fiscal cycle. All activity during the year is focused on meeting those goals …

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Time to tweak the COA?

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June 30 is a common enough date for organizations to have rolled over into the next fiscal year, and that’s always a good time to reevaluate the effectiveness of your Chart of Accounts. As a fiscal year draws to a close, department heads and program managers tend to become very interested in how their activities have done, relative to their …

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Now get out there and spend, spend, spend

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At root, a budget is a guideline, a set of goals, a financial framework within which an org commits to operate. But it’s easy for the guideline to become viewed as “permission”, and that’s not always a good idea. In an oversimplified example, lets say an organization has one revenue source, and plans to raise $10,000 this year. As a …

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Yes Virginia, another nonprofit budget template

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Here’s a link to a template for a generic nonprofit budget spreadsheet recently put together for a client. The accompanying PDF file contains a set of assumptions and notes to support the spreadsheet. Sample budget spreadsheet template Sample budget spreadsheet notes If your organization has struggled with the budgeting process, perhaps this nonprofit budget template will help provide some ideas …

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Spreadsheet diving

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It’s time for you to produce a report for one of your funding agencies, documenting how your org has used the funds provided through their generous grant. Can your accounting app easily produce this information? Or does this common reporting requirement force you to dive for a spreadsheet, in order to represent financial information segregated in the specific manner required, …

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Obfuscation, begone!

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For those of us with a June 30 FYE, April has always struck me as a great time to make sure your audit schedules are whipped into shape. First things first, resolve all those stale outstanding checks, or deposits long in transit, that may still be cluttering up your bank recs. With the deposits, if the G/L’s high, find the …

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We have how much in the bank?

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Deferred revenue is the cash you collect in one fiscal cycle that is related to, and in support of, a future fiscal cycle. As such, it can pose a significant (and dangerous) temptation. Let’s say you’ve met your revenue goals for the current year, and now you’re selling promises to provide services the following year. Cash is getting tight, so …

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