For Nonprofits

The Impact Plan

The nonprofit agency’s management team knows how the Board expects the agency to look in three years.  How does it get there from here?  By producing and following an impact plan, analogous to a business plan in the for-profit world.  This is the bridge between the agency as it now performs and the agency as its leadership wants it to be performing in the future, as laid out in its strategic plan.  The impact plan is not itself a grant application or a strategic plan; it is a nuts-and-bolts management tool, laying out specific action plans — as well as projections of investments, gross receipts, expenses and cash flows — accompanied by measurable outcomes.  It can also serve as the support for a large ask of a major prospective individual or corporate donor, both of whom already speak the language of business plans.  This is how the agency can tell its story, to show such donors how their support will be deployed, and what results they can expect.

Can the agency’s management team do this itself?  Yes, if it has the know-how, time, inclination, patience, and financial-analysis savvy.  It may have most of those attributes, but probably not all of them.  But it needs them all in order to come up with a plan that adds up to something that makes sense, because the Board is counting on the team to take the agency to where the strategic plan says it needs to be.  So, the team could do this itself, if it also believes that producing its impact plan from start to finish is really the best use of its time.  Or, it could bring in some experienced eyes and brains — first, to collaborate closely with the team to flesh out the plan’s strategies, tactics and financial projections, and then second, to synthesize them all into a presentable, professionally-prepared document for the agency.  We are always looking a few steps ahead, to make sure the plan is moving toward a result that measures up. (We also offer heavily-discounted fees to social-services agencies.)

Financial Management Services

Any nonprofit needs a CFO.  Its bookkeeper looks backward, to tell the management team what happened, using debits and credits.  That’s important, of course, but it’s not enough; the team can’t drive a car forward while looking through the rear windshield.  A CFO looks to the future, to give the team a good idea of what’s coming next, using analyses, budgets and projections.  Without those tools, the team is driving blind.  Until the agency grows to the point of being able to hire a full-time CFO, bringing on Capital InterNational Advisors as a fractional one — working as a Form-1099 independent contractor, on a strictly-as-needed basis — is how the agency affords that forward look. (For social-services agencies, furthermore, our hourly rates are heavily discounted.) Here is what we can do:

• Every month, we’ll oversee budget-versus-actual reporting and rolling cash-flow projections.

  • We’ll also re-cast financial statements, primarily the balance sheet, modifying them from GAAP accounting standards for nonprofits to give proper consideration to items such as grants that are made in one lump sum but intended to cover several months or years of disbursements — either for general operations or for a specific purpose.  GAAP accounting generally requires these grants to be taken into income in the month in which they are received, which can lead to reported gross receipts and and/or cash balances that could be significantly misleading if not broken down to show the portions of these amounts — say, just 1/36 of the total of a three-year grant — that are actually available to the agency in a given month.  These re-cast interim statements are shared only between agency management and its Board, so compliance with GAAP rules isn’t necessary; and these statements show a much clearer picture of actual financial performance and position, fostering better-informed decision-making.  (The outside auditors will still produce GAAP-based statements for annual reporting and tax filings, based on the bookkeeper’s output.)

• Every year, we’ll oversee preparation of the annual budget, and oversee a review of the agency’s risk-management program to make sure it’s getting the best deal.

• If the agency has audited financial statements, we’ll oversee the preparation of the books and records so the auditors can do their work as inexpensively as possible.

• Upon the agency’s request, we’ll analyze each of its lines of activity to check that they are not losing money.

Selected Testimonials

• “John served on my Board and was a mentor for me.  He served as Audit Chair and on our Finance Committee.  He has a deep understanding of the challenges faced by nonprofits and helped the agency to create cash-flow projection tools as well as an accounting protocol for donations and pledges.  He also led us in selecting a new outside audit firm and spearheaded our audit process for 2 years.  We use the audit firm to this day. John is committed, dedicated and passionate about helping nonprofits succeed.  He was always there when I had questions and was a fully engaged member of the board.  He is a joy to work with and someone I could rely on 100%.  He left us a legacy of stability and enhanced our ability to grow.” — Ona Foster, CEO, Family Compass

• “I had the pleasure of working with John for several years, as we both served as members of the Board of Directors for Family Compass, a nonprofit dedicated to stopping child abuse.  John served on the Audit and Finance Committees during our tenure together.  John has a very clear and succinct way of translating financials to both the financial expert, as well as to the novice, which was a critical skill considering the composition of our Board.  John was quick to move from analysis to suggested strategy as we fulfilled our fiduciary role of financial management for the nonprofit agency.  John established many financial procedures for Family Compass which are currently in use today and trained both those on staff and Board in those procedures.  I find John to be extremely professional, prompt and thorough in his work.  There is no doubt Family Compass was left in a better position thanks to his leadership and it was truly my pleasure working with John!” — Candace Winslow, Executive Director, The Storehouse of Collin County

In short...working with Capital InterNational Advisors is how you Get Going!