Non-Profit Financial Sustainability, K Williams, CSCNS Workshop

Protecting the missions and mandates of non-profit

organizations in Canada

Kristin S. Williams(902) 430-7195 (cell)

[email protected]@pathcommunications.ca

The non-profit sector operates

in every community and every person is touched directly or indirectly by the work of the

sector.

What conditions or

factors contribute to

financial sustainability in non-profit

organizations?

Financial sustainability is

the mix of revenue and

expense management

strategies that enable an

organization to pursue its mission and mandate over

the long term.

Accountability

Efficacy

Credibility

Opportunity

Financial Practices: The routine manner in which the day-to-day financial activities of a non-profit organization are

gathered and recorded.

#1 Financial Practices 0-3Clear short and long term financial goals, which outline minimum income and costs required to deliver the stated mandate and mission Clear and transparent financial reporting, which is robust and instructive and can be used strategically to aid in decisions Funds are used efficiently and transparently, thus aiding in promoting organizational legitimacy

Grading0 – not applicable/not present/no organizational awareness or not a focus of the organization1 – applicable/in development/insufficient or limited data to support or evaluate2 – fair and reasonable or standard/some data to support or evaluate3 – superior organizational awareness/excellent metrics/extensive results

Fund Development: Refers to all revenue generating strategies that may be employed.

# 2 Fund Development 0-3Fund development is an active priority for the organization supported by appropriate resources There is a diverse range of income sources (specifically a minimum of 5 income sources representing at least 60% of earnings) The organization has its own income generation mechanisms to produce unrestricted assets that can be used at the organization’s discretion Grading0 – not applicable/not present/no organizational awareness or not a focus of the organization1 – applicable/in development/insufficient or limited data to support or evaluate2 – fair and reasonable or standard/some data to support or evaluate3 – superior organizational awareness/excellent metrics/extensive results

Strategic Planning & Thinking: Strategic thinking refers to a mental process and the application of insights, whereas strategic planning outlines possible futures and defines the strategies to

reach desired goals.

#3 Strategic Thinking & Planning 0-3Sustainability is a deliberate and strategic approach by board and staff and mission attainment is considered alongside revenue assurance The organization has strong, effective leadership and a proper, functioning governance model There are well articulated strategic and operational plans with ongoing performance monitoring and analysis

Grading0 – not applicable/not present/no organizational awareness or not a focus of the organization1 – applicable/in development/insufficient or limited data to support or evaluate2 – fair and reasonable or standard/some data to support or evaluate3 – superior organizational awareness/excellent metrics/extensive results

Capacity to Innovate: Innovation is the application of new solutions to meet existing or new requirements. The capacity to innovate, speaks to an organization’s readiness to be innovative.

#4 The Capacity to Innovate 0-3The organization has adopted entrepreneurial approaches, for-profit strategies and exhibits sector blurring or bending There is evidence of interdisciplinary community collaboration to address limitations within services The organization has effective knowledge management, exhibits systems thinking and can effectively utilize, collect and deploy social capital

Grading0 – not applicable/not present/no organizational awareness or not a focus of the organization1 – applicable/in development/insufficient or limited data to support or evaluate2 – fair and reasonable or standard/some data to support or evaluate3 – superior organizational awareness/excellent metrics/extensive results

#1 Financial Practices 0-3 # 2 Fund Development 0-3Clear short and long term financial goals, which outline minimum income and costs required to deliver the stated mandate and mission

Fund development is an active priority for the organization supported by appropriate resources

Clear and transparent financial reporting, which is robust and instructive and can be used strategically to aid in decisions

There is a diverse range of income sources (specifically a minimum of 5 income sources representing at least 60% of earnings)

Funds are used efficiently and transparently, thus aiding in promoting organizational legitimacy

The organization has its own income generation mechanisms to produce unrestricted assets that can be used at the organization’s discretion

#3 Strategic Thinking & Planning 0-3 #4 The Capacity to Innovate 0-3Sustainability is a deliberate and strategic approach by board and staff and mission attainment is considered alongside revenue assurance

The organization has adopted entrepreneurial approaches, for-profit strategies and exhibits sector blurring or bending

The organization has strong, effective leadership and a proper, functioning governance model

There is evidence of interdisciplinary community collaboration to address limitations within services

There are well articulated strategic and operational plans with ongoing performance monitoring and analysis

The organization has effective knowledge management, exhibits systems thinking and can effectively utilize, collect and deploy social capital

Sound Financial Practices → Accountability

Active Fund Development → Efficacy Strategic Thinking and Planning →

Credibility The Capacity to Innovate → Opportunity

Non-profit financial sustainability is complex and there is no one blueprint for success. It is an ongoing process.

Accountability + Efficacy + Credibility + Opportunity = Financial Sustainability