Giving Tuesday may provide gifts for your nonprofit, but
most of us need more than one Giving Tuesday! Financing your nonprofit programs
through charitable giving is a cliff hanger because gifts come and go quickly.
You probably have discovered that.
I just analyzed the 990’s of a large, wonderful nonprofit in
New York City.
BUT I WAS SHOCKED
Their gifts dropped from $120 million to $70 million in one
year. I couldn’t believe it. I have a friend that knows them and she said that
gifts from hedge funds really have been their major source of funding. In bad
years, the hedge fund gifts go away.
For Giving Tuesday, I’m giving two hours of coaching in December to five nonprofit leadership teams. APPLY HERE I’ll review your 990’s, answer questions, and share a couple of tools as appropriate. Good advice never disappears or loses value!
I’m getting more requests than I can honor but its free to
And I truly hope your finances get a major boost on Giving Tuesday
Ronald Dale Tompkins
Certified NonProfit Teams Coach
Federal cash for social programs will drop massively by 20%
Federal cash for NonProfits is lowest in 40 Year Average of GDP.
In 2019, it drops to 11.1%.
Social Security and Medicare costs place incredible pressure
to shrink community development, education, arts, afterschool, LGBT civil
rights, etc. Some of that money flows to
states and cities and then to your agency –it’s drying up by 10% right now. I
see frantic responses to save great programs that are cash starved,
Contributions are declining. Tax Law changed in 2017 so there is no tax benefit for most people to make a gift.
Religion is quickly declining. Religion has been an important teacher about charity and volunteering. Belief has dropped 12% in a decade.
On Giving Tuesday, I’m offering five NonProfit leadership teams relief from the stress. Apply here. It’s not a miracle but you may get a new direction. I’ll give a two hour coaching session to each team over the holidays. There is no cost at all. Part of the discussion will be planning multiple cash streams to keep your agency stable. I use the proven Four Decisions system (People, Strategy, Execution, Cash).
Apply here. Like the lottery, the only way to win is to try! I hope the best for you.
Leaders get lost in a fog of numbers when they only need 7 Key Financials to make decisions.
I hope that you can join me at OpCon, June 13th, where I will be on a panel “What Nonprofits Need to Know About Nonprofit Accounting and Finance”. If you come with a CPA, bring aspirin as they recover from an encounter with a Management Accountant. If you’re a CEO, bring champagne to celebrate as you learn about 7 numbers that actually help you manage your agency.
In my book “Doing Bad at Doing Good”, I discover that the best nonprofits have an Operations Budget model that only requires 7 key financials. I’ll have copies of that available for attendees!
I stopped rolling pennies to take to the bank. I realized that I can only fill, tape, and address a roll of 50 cents every five minutes. My maximum profit is $6.00 per hour and it’s cheaper to use the machine at the grocery store!
Now the same process is happening at the school that I direct. 75% of the money that parents pay is with an app that we provide for their phone. The payment flows directly to the bank for the school and eliminates a physical deposit. The software automatically updates their account on student billing and also adds the revenue to the general ledger. Several tasks are reduced or eliminated.
Now the school is automating accounts payable for trusted vendors. And preparations are underway for triple entry bookkeeping with Blockchain to pay all vendors automatically. There will be no more audit sampling because every transaction will be proven with blockchain.
What does it mean for you as a leader? Accounting staff positions are changing steadily. Will anything be left? How should you arrange your projected Operations Budgets?
The Institute of Management Accountants just had the slide below in a presentation. It shows that nonprofits will still need an accountant who gives financial advice for management decisions. And your budget should include more money for the software that automates the transactions.
Are you leading a nonprofit and don’t feel prepared for the winds of change? Check with me because Cash and Execution Decisions are part of business coaching.
Is your nonprofit about to lose money while you take a few well deserved days off? Can you afford to be home at Christmas?
In 2013, 19,000 children were told to take care of themselves every day of the government shutdown. Headstart had to close until government restarted..
I coach nonprofits to build a secondary source of funding. We live in a time of divided government where one party wants to shrink taxes and government provided services. Many fine organizations do not have the cash reserves to lose $100,000 in a shutdown and never get it back.
If you are in trouble, write to me and I’ll give you some ideas to survive through the President’s funding cutoff.
Giving is a good thing. The United Nations Foundation and the 92nd Street Y started a giving campaign in 2014 that has gone viral. CauseVox states that 2017 raised $125 million more than 2016 – $300 million in total.
They also point out that its a great time for donor education. 22 billion hits on nonprofit web pages happened that day in 2017.
I have a formula to see if it’s right for you, Find your expected Total Revenue. Multiply it by .1 and save the number. Now multiply that new number by .5 and you have a range. Do the charitable gifts that you expect this year plus Giving Tuesday fall within that range? If so, then you are robust enough in your charitable funding to invest the energy and work hours.
Let’s illustrate. The Rochester, NY YMCA 990 report had a revenue of $45 million dollars in 2017. $38 million was from fee for service so that was the primary financing plan. Because management is committed to protecting the agency, they should have set a goal for a 10% surplus of $4.5 million ($45 million x .1). They actually had a deficit of $2 million for 2016 and for 2017 so they need cash. (I’m available to coach 🙂
Because they know that priorities can change quickly, they also want a secondary source of financing (government contracts, charitable gifts, etc.) They take the surplus number of $4.5 million and multiply by .5 which equals $2.3 million. Their required range for donations as their secondary source is $2.3 – $4.5 million. Their 2017 charitable gift total was $4.2 million.
They know that the average gift on Giving Tuesday is $100. Let’s assume that they check with the Board and decide that they will solve 10% of their deficit (2,000 gifts) on Giving Tuesday. The effort seems worth it because they will also call attention to all of their social media. They realize that some of the gifts would have come in without Giving Tuesday but charitable donations are a very good secondary financing plan for them.
What did they get? You’ll have to check after Giving Tuesday 🙂
What if your normal gift total is $40,000 for the year on a $45 million budget?
Determine what is the best secondary financing and also do you have it already in operation? Many nonprofits only have government contracts and they desperately need to choose one more financing source. Many nonprofits do not receive much charitable funding. Don’t jump for Giving Tuesday just because everyone is doing it. It may not be your secondary source solution.
Use Giving Tuesday if its part of a larger plan for secondary source financing for your mission!