Over the last six months, Scott Leff and I have observed a greater proportion of nonprofit Boards seeking clarification of their agencies’ finances – distilling the important and necessary financial information into a condensed report – and financial health. With that in mind, the Bayer Center recently unveiled a set of diagnostic tools that we are calling our “Financial Wellness Package.” To borrow a little medical parlance, we liken it to a “financial check-up” with your friendly Bayer Center consultant.
One piece of our “Wellness Package” consists of looking at your agency’s financial performance relative to organizations of similar mission and (budget) size. As a part of this analysis, we analyzed close to 240,000 nonprofit organizations that filed 990 information and calculated numerous financial performance ratios as one approach towards answering the Board question: “How financially healthy is my organization?” We refer to these figures as our “Financial Benchmarks.”
Originally, we had just planned to use the benchmark results as one component in our Wellness Package, and thought nothing of the broader sector implications that could be gleamed from our analysis. However, after further review and discussion, we’d like to share with you some of the broader takeaways we discovered that may influence how you think about your agency’s finances and where you stand relative to peer organizations of mission and size.
We look forward to sharing some of these findings with you as we all continue to seek and share industry best practices. Stay tuned…