1 October 14, 2015 YWCA USA Financial Leadership & Management Program The Sustainability Mindset for every woman 1 Join us on

2 WELCOME

3 Why this matters  Lead Proactively: No Money, No Mission  Board/CEO responsibilities for financial vitality ―Duty of Care, ―Duty of Loyalty ―Duty of Compliance ―Stewardship and Legacy  YWCA Assets: Our legacy, our future

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6 Financial Leadership The financial leader of your organization is

7 Financial Leadership Model

8 a)Staffing b)Internal Controls

9 Staffing Role Strategic Planning & Analysis Operational Accumulation & Reporting Transactional Inputting & Filing Skills Needed –Big picture thinking –Communication –Accounting rules and regulations –Attention to detail

10 Influences on Internal Controls Your Culture Your Environment Your Procedures Your Monitoring

11 Financial Leadership Model a)What am I looking at? b)How do I assess?

12 Reading Financial Statements

13 Assessing Financial Health Immediate Financial Health –Cash to pay bills –Cash flow projection –Budget Long-term Financial Health –Reserves –Profitability –Income diversity

14 Understanding Your

15 Nonprofit Program Expenses Specific Program Costs Shared Costs Admin Costs

16 What is allocation? Allocation is the systematic process of splitting certain expenses between activity centers (cost centers) based on several factors.

17 Resources Sample Financial Statements

18 What’s Driving Facilities Planning?

19 Understanding Options

20 Financial Leadership Model

21 6 Stages of Budgeting Setting Goals and Context Estimate Costs Forecast Income Bridging the Gap Approve the Budget Implement and Monitor

22 Performance IndicatorsTargets Current Indicator Trend Comments Ranges 6 mos ago1 yr ago 1.5 yrs agoCelebrateMonitorAct Now Fundraising New major donors5 or more32 Mesaured against how many we want for the year. Donors who give more than $1,000 5 or more32 Major donors introduced by a board member 5 or more55 Measured against how many we want for the year. Not necessairly an "ask" - may be an introduction. 5 or more32 Donors who gave over $100 last year, repeating this year 56% or more53%60% Dones as a % of total donors who gave $100 in time period last year. > 56%40-55%< 30% Fundraising event revenue - net> $20,000 $ 23,000 $ 20,250 Proportionately to time of year - desired event revenue for is $20,000 net > $20,000 $18, ,000 < = $15,000 Finance CelebrateMonitorAct Now Surplus / deficit compared to budgetwithin 3%5%8% Measured as % vs. % of year elapsed w/in 3%3-10%>10% Unrestricted liquidity> Ratio = Current assets (Cash & Investments + Accounts Receivable - Restricted cash) / current liabilities > 1.01< 1.0 Unrestricted contributions (funding diversity) 20% or more22%19% % of individual, corporate & other contributed support to total revenue (excludes foundations) >= 20%10-20%< 10% Human Resources CelebrateMonitorAct Now Staff retention80%100% % of staff with at least 1 year over total staff 80%70%60% Compensation study7-FebNot DoneN/A next steps by 2/07 Feb-07 Before Feb-07 After Feb-07 Board Governance CelebrateMonitorAct Now Attendance at board meetings90%100% % of board at last 4 meetings 90%80%70% New nominees meeting criteria80%75%N/A % of new nominees meeting at least 6 of 9 established criteria 80%70%60% Focus on strategy and generative issues75%80%60% % of meeting time during last 2 meetings spent on these issues 75%60%< 50% Programs CelebrateMonitorAct Now # of outreach presentations35 37Count each session regardless of topic 35< 3020 Program Y Activity Based on previous years' numbers and the strong emphasis on increasing #s <= 375 Program X Activity Based on previous years' numbers with some anticipated growth built in. 50< 4535 Average client satifisfaction Out of 1-5 scale. Don't have mechanism in place for averaging all evals. Need to work on consistency between program areas < 4.0

23 Strengthening Your Revenue Strategy

24 Steps to Sustainable Revenue 1.Shift from programs to impact 2.Know what it costs to deliver impact 3.Understand your place in the market 4.Know who benefits from your programs and target that stream 5.Embrace and invest in philanthropic AND earned revenue

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26 Impact Strategy Financial Strategy

27 What is Sustainability?

28 “Shift the framework for succession planning to deep sustainability.” “It is time to change how the sector thinks about and approaches succession planning…it is about ensuring organizational sustainability by identifying and addressing key vulnerabilities so that the organization is not dependent on any one leader, funder, strategy, or way of thinking.” “Recovery of the U.S. economy hasn’t addressed the systemic and perpetual funding challenges facing nonprofits.” Nonprofits said that top challenges were: 1.Achieving long-term sustainability (32%) 2.The ability to offer competitive pay and/or retain staff (25%) 3.Raising funding that covers full costs (19%) Ruth McCambridge, Editor-in-Chief, Nonprofit Quarterly Magazine State of the Nonprofit Sector 2015 survey

29 Defining Sustainability Sustainability encompasses both: Financial sustainability (the ability to generate resources to meet the needs of the present without compromising the future) and Programmatic sustainability (the ability to develop, mature, and cycle out programs to be responsive to constituencies over time.) - - Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

30 Sustainability... Is a destination Is an orientation

31 Sustainability involves ongoing decision making about your business model.

32 Defining Business Model Your hypothesis about which impacts will engage human and financial participation From here, a chosen set of mission specific and fund development activities that work together to achieve impact and mission. Every organization’s set of activities is unique and represents management’s best thinking.

33 The Matrix Map

34 The Matrix Map

35 A sample YWCA Association

36 What information do we see on a matrix map: What we do (bubbles) Mix of mission-specific (blue) and fund development programs (green) (color of bubbles) Where we are investing our resources (size of bubbles) The net financial results of each activity (horizontal axis) Relative mission impact of each activity (vertical axis) Matrix Map Overview

37 Matrix Map Process

38 Matrix Map Process

39 Impact Criteria 1. Contribution to Intended Impact Relative to other programs, how well does this program contribute to what the overall organization aims to accomplish? 39

40 Impact Criteria 2.Excellence in Execution Is this program something that the organization delivers in an exceptional manner? 40

41 Assessing Mission Impact Criteria to Consider 1.Contribution to intended impact 2.Excellence in execution 3.Scale 4.Depth 5.Significant unmet need 6.Community building 7.Leverage

42 Example

43 Matrix Map Process

44 True Program Costs Direct Costs Shared Costs Admin Costs

45 Allocating Revenue Allocated to Mission- Specific Programs Government contracts Restricted foundation grants Fee for service money Allocated to Fund Development Programs Unrestricted contributions by individuals or foundations Special events

46 Putting it all together

47 Strategic Inquiry

48 Programmatic Level Inquiry Instead of:  Taking it for granted...  Not involving the board...  Turning your attention to “problem areas”

49 Programmatic Level Inquiry Instead of:  Closing it because its not breaking even...  Making it the sacred cow that can’t be criticized...

50 Programmatic Level Inquiry Instead of:  Giving it second class status...  Keeping it separate from programs...

51 Programmatic Level Inquiry Instead of:  Trying once again to improve it...  Not thinking about it...

52 Programmatic Level Inquiry

53 Ongoing Decision Making

“It is not a one-time thing, not an episodic thing, not a senior management thing or a board of directors thing. It’s really a mindset and way of organizational being.” - - The Sustainability Mindset: Using the Matrix Map to Make Strategic Decisions

What is necessary today is a strategy that breaks free of static plans to be adaptive and directive, that emphasizes learning and control, and that reclaims the value of strategic thinking for the world that now surrounds us. Dana O’Donovan Noah Rimland Flower

Impact Strategy Financial Strategy

57 Leadership Impact Strategy Financial Strategy

58 Visualize your Business Model

59 Decision-Making Orientation that is right for YOU

60 Financial Leadership Model

61 Financial Leadership The financial leader of your organization is

62 The financial leader of your organization is YOU. for every woman 62