using nonprofit financials as a strategic decision making ......investment advisory services are...
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WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING
Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC, an SEC-registered investment advisor. | ©2017 CliftonLarsonAllen LLP
Using Nonprofit Financials as a Strategic Decision Making ToolPresented by Timothy Warren, CPAPrincipal, Nonprofit Group
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Goals for Today’s Session
Learning Objectives:
→ Understand the changing role of the lead financial individuals in a nonprofit organization
→ Understand the starting point for financial reporting and why it is important
→ Identify key users of nonprofit financial information and the delivery methods of such information
→ Start the conversations to convert your financial information into a strategic decision making tool
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Nonprofit Story Telling
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• strategist• leader• diplomat• story teller/translator?
The modern CFO is a:
Changing Role of the CFO
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Chief Story Teller
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Access to data
Analyticalskills
PresentationTechniques
Meaningfulstory of the:• Past• Present• Future
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Nonprofit Story Telling – Holistic View
CFO as a Story Teller
StrategyBoard Members/Finance
Committees
Business ModelExternal
Stakeholders/Others
Leadership/Management
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Organizational Mission
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Discussion Questions
• CFO or Director of Finance are moving towards the Chief Story Telling Officer or Director of Story Telling.
• Discussion– What does this mindset shift mean to the group?– What does it mean to story tell?– How are organizations doing today with story telling?– How does nonfinancial data play a roll in story telling?
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Key Elements of Story Telling
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Nonprofit Story Telling – A Different Perspective
Select the best presentation technique
Identify the data that is available
Determine what information is important to convey
Define the audience
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Defining the Audience
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Define the Audience
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Board members
LeadershipFinance Committees
Department managers
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Audience NeedsAudience Informational Needs
Board Members Strategic/high level while meeting their fiduciary responsibilities
Leadership Balance of strategic and operational
Department Managers Performance focused, more detailed
Finance Committees Enhanced financial insight
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Determining Information that is Important to Relay
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Strategic Plan• The strategic plan is the start of the reporting
process• Generally an outcome of strategic planning will be
strategic initiatives/imperatives or the goals developed in the plan
• Linking reporting to the activities that lead to success of the strategic imperative is a critical reporting element of any nonprofit organization
Discussion Question: Has anyone linked financial results directly to a strategic plan
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Business Model
• A rationale of how an organization creates, delivers and captures value
• Nonprofit is not a type of business model• Can serve as a “funnel” for how to report results of strategic
initiatives
The Business Model Connects and Organization’s Commitment to
Purposeful Action and its Pursuit of a Responsible Level of Profitability
Source: CFO as Business Model Strategist; Jeff De Cagna, Executive Advisor, Foresight First LLC
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Business Model Grid
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Source: CFO as Business Model Strategist; Jeff De Cagna, Executive Advisor, Foresight First LLC
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Select the Best Presentation Technique
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Presentation Techniques
• Data Visualization– Charts– Graphs– Score cards– Heat maps
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Why Data Visualization
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• Why Data Visualization?– Draw attention to what is important– Easy to understand– Information at a glance
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Specific Example – Strategy to Reporting
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Strategy: Association wanted to (a) grow membership and (b) provide more services to its membership base.
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Group Exercise
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Source: Boys & Girls Club of America December 31, 2016 audited financial statement
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Discussion Questions
Discussion Question: How would BGCA present this data to the board vs. leadership?
Discussion Question: How would this type of reporting enhance BGCA ability to use their data for decision
making?
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WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING
Summary of Learning Objectives
CFO’s/DOF’s need to become the story tellers of the nonprofit
organization
When developing financial reporting start with the key
strategies of the organization
Understand the different types of users of your information
(financial and nonfinancial) and tailor the information accordingly
Use the output of the reporting to make decisions on
direction/strategy
Financial Reporting
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twitter.com/CLAconnectfacebook.com/cliftonlarsonallen
linkedin.com/company/cliftonlarsonallen
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CLAconnect.com
Timothy Warren, CPAPrincipal, Nonprofit Group
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Appendix
Sample Presentation Techniques
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Charts – Leverage Visual Indicators
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Graphs – Combination Graphs
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2017P 2016 2015 2014 2013Total Revenue 14,648,623 14,432,976 14,227,166 13,845,075 13,310,300Total Expense 14,148,623 13,809,162 13,545,085 13,409,909 12,834,957Operating Surplus 500,000 623,814 682,081 435,166 475,343
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100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
11,500,000
12,000,000
12,500,000
13,000,000
13,500,000
14,000,000
14,500,000
15,000,000
Dolla
rs
Revenue, Expense and Surplus - 5 Year Trend
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Graphs - Waterfall
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WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING
Graphs: Pie or Donut
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WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING
Graphs: Financial & Non Financial Data
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WEALTH ADVISORY | OUTSOURCING | AUDIT, TAX, AND CONSULTING
Score Cards
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Heat maps
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