Do your financial reports make peoples’ eyes glaze over? If you want to make your financial reports come alive, a dashboard might do the trick. You’ll find with the visual tool that the people who previously ignored the stacks of numbers you gave them will start to engage and understand your organization’s financial situation.
What’s a Dashboard?
Typically, a one-page document that uses graphics to illustrate an organization’s most important data.
What Should You Include?
The things that speak the loudest and clearest to your organization’s financial health. While that will vary from one organization to the next, it’s hard to go wrong with these:
Taking your end-of-month cash balance and putting it into a line graph can illustrate when things are on track (or not).
In this example, it’s typical for this organization’s cash to rise as it receives prepayments and sponsorships for their big spring event. Then cash drops in April when they have the event and have to pay associated expenses. This visual, with year-over-year data, can give more comfort to the board member or new executive director who are concerned about the cash drop in April than simply hearing, “trust me, this happens every year.”
This is a similar concept, but based on your operating reserve (unrestricted cash divided by monthly expenses). If the same nonprofit from above went from spending an average of $100,000 per month in 2016 to $150,000 per month in 2017, suddenly cash doesn’t look as good as last year. Even though it’s more cash, it won’t last them nearly as long.
Executive directors and program staff have responsibility for their budgets. With this graph, how long does it take you to figure out which income area is struggling, and by how much?
You can create similar graphs with program expenses, net income, or whatever else is most relevant to your organization.
Your nonprofit may have other key financial data it should keep a close eye on. This might include:
Each nonprofit has a unique set of program data it uses to track impact. Whether meals served or kittens placed with loving homes, these are what you use to measure your performance and success. Frequently, financial dashboards will include one of two of these, especially if they have a clear and direct impact on the bottom line.
In this example, if this nonprofit’s goal was to train 100 veterans per month for a year and its May, that tells a good story. If its November, it’s a different one. Either way, it paints a quick picture.
What measures the health of your organization or your key efforts or programs? If these don’t get their own, stand-alone report, your financial dashboard might include these sorts of things a few times each year because they can speak to things that sooner or later will impact your financial bottom line.
Some might include, marketing and social media, philanthropy, staff turnover and satisfaction, board performance, project backlog, revenue by type, or net promoter score.
Now, we want to hear from you! Have any additions to this list? What indicators do you measure to track your organization’s success? Join the discussion!
Member resources and discussions require a login to the online member community, an exclusive networking tool for Mission Capital Members. If you have any questions regarding access or are part of a member organization, but don’t yet have an account, please contact Chelsea Hartness at 512-477-5955 ext. 232.
This checklist can help nonprofit staff and boards evaluate the strength of an organization's finances.
Blog post by Sean Hale. How smart Operations can lead to organizational success as one of the six elements of the Nonprofit Effectiveness Framework.
When we talk about “measuring” what matters, the devil is in the details. Precision and accuracy are needed to lend credibility to measuring the success of our efforts.
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