Financial Resiliency
“Now, with traditional sources of funding shrinking and competition for those limited funds growing, it is more important than ever before for nonprofit organizations to gain expertise in financial literacy and to diversify their revenue sources”, said Coleen West, Executive Director of the Howard County Arts Council.
The Nonprofit Resource Development Council’s Financial Resiliency initiative is grounded in a March 2009 Conference on Leading in the Lean Years, convened by the Horizon Foundation and the Association of Community Services. Attended by over 300 nonprofit leaders, conference participants requested specific tools in order to grapple with the financial challenges faced.
When the NRDC was formed, the conference theme of efficiency and effectiveness of nonprofit operations arose as a major issue. A multi-pronged approach to increased financial resiliency was developed. Over 2010 and 2011, a series of convenings, trainings and consulting will frame these NRDC efforts.
First, a broad cross-section of county nonprofits will gather at a Nonprofit Financial Resiliency Conference, scheduled on July 20, 2010. In addition to nonprofit executive directors, board chairs, board treasurers and nonprofit finance staff are invited. In addition to other usable information, a financial resiliency self-assessment tool and a tool to help nonprofits identify and evaluate new revenue sources will be presented. Second, on-the-ground consultants will be available to assist selected nonprofits needing additional assistance.
The self-assessment tool helps nonprofit leaders assess their organization’s financial resiliency, as measured by their financial leadership roles and financial data accuracy, and their financial health, planning and monitoring capabilities. The Council is offering this self-assessment tool to all Howard County nonprofits along with a copy of the publication Financial Leadership for Nonprofit Executives: Guiding Your Organization to Long-term Success. The publication describes the assessment tool and how nonprofits can use their assessment results to identify their areas of financial strength and the areas that need attention.
The second component, the revenue matrix, is focused on those nonprofits interested in identifying and evaluating options for new and diversified revenue streams. Nonprofits that complete the revenue matrix process end up with a customized new revenue model that is more sustainable over the long term. The revenue matrix process begins with a group training session at the July event for management and board leadership with nonprofits working in cohorts of similar organizations. During that session each nonprofit develops a ranked ordering of its own “universe” of potential funding sources. After the session, each nonprofit will review its scored matrix and decide on next steps in finalizing its new revenue model and timetable for implementation.
“Now, with traditional sources of funding shrinking and competition for those limited funds growing, it is more important than ever before for nonprofit organizations to gain expertise in financial literacy and to diversify their revenue sources”, said Coleen West, Executive Director of the Howard County Arts Council. “The NRDC’s Financial Resiliency initiative is a great step in that direction.”
