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Does your board have a quick and easy way to assess your not-for-profit\u2019s financial performance? It does if it has a dashboard with carefully chosen and up-to-date key performance indicators (KPIs). Dashboards can also be set up to provide critical information to multiple audiences regarding specific goals and fundraising campaigns. Here\u2019s how you can get\u00a0started.<\/p>\n
Your nonprofit\u2019s \u201cbusiness\u201d drivers<\/strong><\/p>\n To facilitate informed, timely decisions, you must first select the right KPIs. For a financial dashboard, these will depend largely on factors such as your organization\u2019s revenue streams, key expense factors, budget and strategic goals. To include the most useful metrics, identify your nonprofit\u2019s \u201cbusiness\u201d drivers.<\/p>\n Additionally, determine which factors affect the reliability of your revenue streams \u2014 and which influence expense levels. Then create KPIs that monitor those factors. Think, too, about the level at which you want to track your KPIs. You could monitor them by individual program or function, or at the organizational\u00a0level.<\/p>\n Staging financial stability<\/strong><\/p>\n Say that a nonprofit theater company\u2019s board is concerned about financial stability and liquidity. The theater\u2019s primary business drivers are proper pricing and maximum attendance. Its dashboard might include such KPIs\u00a0as:<\/p>\n Over time, this nonprofit likely would need to adjust its KPIs as its strategies, priorities or programs change. What was \u201ckey\u201d last year isn\u2019t necessarily key in today\u2019s challenging environment.<\/p>\n Other important metrics<\/strong><\/p>\n Certain KPIs are popular among a variety of nonprofits, including:<\/p>\n Current ratio.<\/strong> This reflects your organization\u2019s ability to satisfy debts coming due within the year. Divide current assets by current liabilities. A ratio of \u201c1\u201d or more generally means you can meet those obligations.<\/p>\n Projected year-end cash.<\/strong> Based on the current cash position plus budgeted cash flows through the end of the fiscal year, this projects liquidity and ability to satisfy upcoming commitments.<\/p>\n Year-to-date revenue and expense.<\/strong> This measures actual results against a budget and reveals whether revenues and expenses are in line with expectations or within a reasonable\u00a0range.<\/p>\n Program efficiency ratio.<\/strong> The ratio assesses mission efficiency by showing how much funding goes to programs vs. administrative or other expenses. Calculate it by dividing program expenses by overall expenses.<\/p>\n Multiple uses<\/strong><\/p>\n Once you successfully establish a financial dashboard, you may want to use the tool for other purposes. Some nonprofits create dashboards to monitor hiring stats, board \u201caccountability,\u201d risk management and social media use. Contact us for more information.<\/p>\n \u00a9 2022<\/em><\/p>\n <\/body> Does your board have a quick and easy way to assess your not-for-profit\u2019s financial performance? It does if it has a dashboard with carefully chosen and up-to-date key performance indicators (KPIs). Dashboards can also be set up to provide critical information to multiple audiences regarding specific goals and fundraising campaigns. Here\u2019s how you can get\u00a0started. […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,10,15],"tags":[8,11,12],"class_list":["post-16305","post","type-post","status-publish","format-standard","hentry","category-articles","category-news","category-not-for-profit","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=16305"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16305\/revisions"}],"predecessor-version":[{"id":16306,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/16305\/revisions\/16306"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=16305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=16305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=16305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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