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Financial Management for Nonprofit Organizations, 3rd Edition

Name: Financial Management for Nonprofit Organizations, 3rd Edition
ISBN: 9781119382560

by John Zietlow, Jo Ann Hankin, Alan Seidner, Tim O'Brien

April 2018

Beginner

768 pages

28h 7m

English

Wiley

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COVER
TITLE PAGE
ABOUT THE AUTHORS
PREFACE
ACKNOWLEDGMENTS
CHAPTER 1: UNDERSTANDING NONPROFIT ORGANIZATION FINANCES
1.1 THE IMPACT OF THE GREAT RECESSION1.2 DEFINITION OF NONPROFIT ORGANIZATIONS1.3 CHARACTERISTICS OF NONPROFIT ORGANIZATIONS1.4 UNDERSTANDING THE LANGUAGE OF THE NONPROFIT ORGANIZATION1.5 FINANCIAL POLICIES1.6 FINANCIAL PRACTICES1.7 PRIMARY FINANCIAL OBJECTIVE1.8 CONCLUSIONNOTES
APPENDIX 1A: THE LILLY STUDY FINDINGS
THE LILLY STUDYMANAGEMENT AND FINANCIAL OBJECTIVESON-SITE INTERVIEWS, QUESTIONNAIRES, AND ARCHIVAL STUDIESTHE APPROPRIATE LIQUIDITY TARGET MODELNOTE
CHAPTER 2: LIQUIDITY MANAGEMENT
2.1 INTRODUCTION2.2 NONCOMMERCIAL NONPROFIT ORGANIZATIONS2.3 EVIDENCE ON LIQUIDITY MANAGEMENT IN THE NONPROFIT SECTOR2.4 FACETS OF LIQUIDITY MANAGEMENT2.5 IMPORTANCE OF LIQUIDITY MANAGEMENT2.6 WHAT IS THE APPROPRIATE LEVEL OF LIQUIDITY?2.7 CONCLUSIONNOTES
CHAPTER 3: MANAGING MISSION, STRATEGY, AND FINANCIAL LEADERSHIP
3.1 VALUE OF STRATEGIC PLANNING3.2 WHAT IS STRATEGIC PLANNING?3.3 WHAT ARE THE ORGANIZATION'S MISSION, VISION, AND GOALS/OBJECTIVES?3.4 STRATEGIC MANAGEMENT PROCESS3.5 IMPLEMENTING THE STRATEGIC PLAN3.6 PERFORMANCE MANAGEMENT SYSTEMS3.7 STRATEGIC PLANNING PRACTICES: WHAT DOES THE EVIDENCE SHOW?3.8 CONCLUSIONNOTES
CHAPTER 4: MANAGING STRUCTURE, ACCOUNTABILITY, AND ETHICS
4.1 FINANCIAL TOOLS AND SUPPORT STRUCTURE4.2 ORGANIZATIONAL STRUCTURE AND GOVERNANCE4.3 ACCOUNTABILITY STRUCTURE4.4 ETHICS4.5 STRUCTURE, ACCOUNTABILITY, AND ETHICS IN PRACTICE4.6 NEW FORMS4.7 CONCLUSIONNOTES

APPENDIX 4A: BY-LAWS OF THE ABC EDUCATIONAL FOUNDATION – A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION
ARTICLE I. NAMEARTICLE II. OFFICESARTICLE III. PURPOSES AND POWERSARTICLE IV. MEMBERSHIP CORPORATIONARTICLE V. TRUSTEESARTICLE VI. STANDING BOARDS OF THE FOUNDATIONARTICLE VII. OFFICERSARTICLE VIII. PROCEDURESARTICLE IX: MISCELLANEOUSARTICLE X. AMENDMENTS TO BY-LAWSNOTES
APPENDIX 4B: SUMMARY OF TRUSTEE RESPONSIBILITIES AND QUALIFICATIONS
BOARD OF TRUSTEESBOARD CHAIREXECUTIVE DIRECTOR/CHIEF EXECUTIVE OFFICERTREASURER/CHIEF FINANCIAL OFFICERSECRETARYNOMINATING COMMITTEEFINANCE COMMITTEEVOLUNTEERS
APPENDIX 4C: RECOMMENDED GOVERNANCE AND ETHICS RESOURCES
CHAPTER 5: DEVELOPING FINANCIAL POLICIES
5.1 INTRODUCTION5.2 FINANCIAL POLICIES5.3 PUTTING POLICIES INTO PLACE5.4 ESTABLISHING PROCEDURES5.5 FINANCIAL POLICIES AND PROCEDURES IN PRACTICE5.6 ADDITIONAL RESOURCESNOTES
APPENDIX 5A: NONPROFIT FINANCIAL POLICY EXAMPLES ON THE INTERNET
APPENDIX 5B: GOOD, BETTER, AND BEST MEASURES OF TARGET LIQUIDITY
CHAPTER 6: UNDERSTANDING FINANCIAL ACCOUNTING BASICS AND FINANCIAL STATEMENTS
6.1 INTRODUCTION6.2 FINANCIAL STATEMENT USERS AND USES6.3 ACCOUNTING BASICS6.4 THREE FINANCIAL STATEMENTS6.5 THE AUDIT AND THE AUDIT COMMITTEE6.6 FINANCIAL STATEMENT USERS AND USES IN PRACTICE6.7 SOCIAL ACCOUNTING6.8 ADDITIONAL RESOURCESNOTES
APPENDIX 6A: REVISED FINANCIAL STATEMENT FORMAT – ACCOUNTING STANDARDS UPDATE 2016-14
REASON FOR AND SUMMARY OF STATEMENT PRESENTATION CHANGESCOMPARING THE NEW FORMAT TO THE OLD FORMATILLUSTRATING THE NEW FORMAT FOR STATEMENT OF ACTIVITIES, STATEMENT OF CASH FLOWS, LIQUIDITY AND AVAILABILITY DISCLOSUREINTERPRETATIONS AND IMPLICATIONSNOTES
CHAPTER 7: DEVELOPING FINANCIAL REPORTS AND RATIOS: MAKING SENSE OF THE NUMBERS
7.1 INTRODUCTION7.2 MAJOR DIFFERENCES FROM FOR-PROFIT BUSINESS REPORTS7.3 OBJECTIVES OF FINANCIAL REPORTS7.4 REPORTING SYSTEM DESIGN7.5 MAJOR REPORTS7.6 INTERNAL REPORTS7.7 EXTERNAL REPORTS7.8 CONCLUSIONNOTES
APPENDIX 7A: EXAMPLE FINANCIAL RATIO CALCULATIONS
APPENDIX 7B: ADDITIONAL FINANCIAL RATIOS
7B.1 BUSINESS LIQUIDITY, FUNDING, AND OPERATING RATIOS7B.2 OTHER RATIOS USED BY CHARITY RATING SERVICES7B.3 STATEMENT OF CASH FLOWS RATIOS7B.4 RATIOS WITH COMPARATIVE BENCHMARK DATA AVAILABLE (BASED ON FORM 990)7B.5 COMPARATIVE BENCHMARK DATA FOR FAITH-BASED ORGANIZATIONS (BASED ON SA AND SFP)
APPENDIX 7C: CREDIT RATING AGENCIES AND DOE RATIOS
WEBSITES FOR CREDIT RATING AGENCIES
CHAPTER 8: DEVELOPING OPERATING AND CASH BUDGETS
8.1 INTRODUCTION8.2 OVERVIEW OF THE BUDGETING PROCESS8.3 ARE NONPROFIT ORGANIZATIONS DOING THEIR BUDGETING PROPERLY?8.4 DEVELOPING AND IMPROVING YOUR BUDGETING PROCESS8.5 SETTING THE BUDGETARY AMOUNTS8.6 BUDGET TECHNIQUE REFINEMENTS8.7 CASH BUDGET8.8 MANAGING OFF THE BUDGET8.9 CONCLUSIONNOTES
APPENDIX 8A: CASE STUDY: THE CASH CRISIS AT THE CHILDREN'S TREATMENT CENTER
THE HONOLULU CHILDREN'S TREATMENT CENTERSOURCES OF REVENUESEXPENSESTHE BANK LOANQUESTIONS
APPENDIX 8B: CASE STUDY: TRI-CITY ACADEMY
CASH BUDGETCASH BUDGET
CHAPTER 9: LONG-RANGE FINANCIAL PLANNING AND CAPITAL BUDGETING
9.1 INTRODUCTION9.2 PLANNING FOR THE FUTURE9.3 FINANCIAL EVALUATION OF NEW AND EXISTING PROGRAMS9.4 CAPITAL BUDGETING: FINANCIAL EVALUATION OF PROJECTS THAT ARISE FROM EXISTING PROGRAMS9.5 FINANCIAL EVALUATION OF MERGERS, JOINT VENTURES, AND STRATEGIC ALLIANCES9.6 FINANCIAL PLANNING AND CAPITAL BUDGETING IN PRACTICE9.7 CONCLUSIONNOTES
APPENDIX 9A: CASE STUDY: KIAWAH ISLAND COMMUNITY ASSOCIATION
APPENDIX 9B: EVALUATING SOCIAL ENTERPRISES
FRAMEWORK INTERPRETATION AND IMPLEMENTATIONCAVEATSNOTES
CHAPTER 10: MANAGING YOUR ORGANIZATION'S LIABILITIES
10.1 MANAGING THE BALANCE SHEET10.2 BALANCE SHEET MANAGEMENT: BENEFITS AND STEPS10.3 PAYABLES10.4 SHORT-TERM BORROWING10.5 STRATEGIC FINANCING PLAN10.6 STEPS TO SUCCESSFUL BORROWING10.7 MATCHING FINANCIAL SOURCES TO STRATEGIC OBJECTIVES10.8 PREPARING THE FINANCING PROPOSAL10.9 MAKING THE PRESENTATION10.10 OTHER FACTORS IN BORROWING/LENDING DECISIONS10.11 MUNICIPAL AND TAXABLE BONDS10.12 LEASING AND NONTRADITIONAL FINANCING SOURCES10.13 DEVELOPING A DEBT AND HEDGING POLICY10.14 LIABILITY MANAGEMENT IN PRACTICE10.15 CONCLUSIONNOTES
CHAPTER 11: CASH MANAGEMENT AND BANKING RELATIONS
11.1 INTRODUCTION11.2 WHAT IS CASH MANAGEMENT?11.3 COLLECTION SYSTEMS: MANAGING AND ACCELERATING RECEIPT OF FUNDS11.4 DISBURSEMENTS11.5 STRUCTURING A FUNDS MANAGEMENT SYSTEM11.6 MONITORING BANK BALANCES AND TRANSACTIONS11.7 CASH FORECASTING11.8 SHORT-TERM BORROWING11.9 SHORT-TERM INVESTING11.10 BENCHMARKING TREASURY FUNCTIONS11.11 UPGRADING THE CALIBER OF TREASURY PROFESSIONALS11.12 SECURITY AND RISK MANAGEMENT ISSUES11.13 TRENDS IN TREASURY MANAGEMENTNOTES
APPENDIX 11A: DIRECT PAYMENT FOR NONPROFITS
SAVE TIME AND COSTS, AND ADVANCE ORGANIZATIONAL GOALSINCREASE EFFICIENCIES IN YOUR ORGANIZATIONINCREASE DONATION DOLLARS AND ENCOURAGE CONTINUED GIVINGKEEP YOUR BUSINESS PAYMENTS AND DONATIONS SECURECALCULATE SAVINGSGET STARTEDRESOURCES
APPENDIX 11B: DIRECT PAYMENT CASE STUDY
CHAPTER 12: INVESTMENT POLICY AND GUIDELINES
12.1 INVESTMENT POLICY12.2 INVESTMENT GUIDELINES12.3 CHECKLIST OF ELEMENTS FOR LONG-TERM/ENDOWMENT INVESTMENT POLICY AND GUIDELINES12.4 INVESTMENT COMMITTEE12.5 TRENDS IN INVESTMENT MANAGEMENT12.6 INVESTMENT POLICY SUMMARYNOTES
APPENDIX 12A: SAMPLE OF SHORT-TERM INVESTMENT POLICY AND GUIDELINES
INVESTMENT COMMITTEEINVESTMENT POLICYINVESTMENT RESPONSIBILITYREPORTINGINVESTMENTSMATURITY LIMITATIONSREVIEW AND/OR MODIFICATION
APPENDIX 12B: INVESTMENT POLICY
INTRODUCTIONINVESTMENT ASSETSPURPOSE OF THE INVESTMENT POLICYDELEGATION OF AUTHORITYRESPONSIBILITIES OF THE INVESTMENT AND FINANCE COMMITTEERESPONSIBILITIES OF THE INVESTMENT MANAGERRESPONSIBILITIES OF THE CUSTODIANCASH FLOW REQUIREMENTSGENERAL INVESTMENT PRINCIPLES/ASSUMPTIONSASSET DIVERSIFICATIONASSET QUALITYINVESTMENT OBJECTIVESASSET ALLOCATIONSSOCIAL RESPONSIBILITYPERFORMANCE EVALUATION AND REPORTING REQUIREMENTS
APPENDIX 12C: SHORT-TERM INVESTMENT POLICY FOR HIJ FOUNDATION
APPENDIX 12D: SAMPLE OF INVESTMENT POLICY STATEMENT FOR THE ABC FOUNDATION'S LONG-TERM ENDOWMENT POOL
STATEMENT OF INVESTMENT OBJECTIVESASSET ALLOCATIONGUIDELINES FOR THE SELECTION OF FIXED-INCOME SECURITIESGUIDELINES FOR SELECTION OF EQUITIES: DIVERSIFICATION FOR EACH MANAGERPERFORMANCEPERMISSIBLE AND NONPERMISSIBLE ASSETSSELECTION OF INVESTMENT MANAGERSRESPONSIBILITIES OF THE INVESTMENT MANAGER
APPENDIX 12E: DEFINITIONS OF FIXED-INCOME INSTRUMENTS
US TREASURY SECURITIESUS GOVERNMENT AGENCY OBLIGATIONSMUNICIPAL SECURITIESBANK OBLIGATIONSASSET-BACKED SECURITIESCOMMERCIAL PAPERLOAN PARTICIPATIONSCORPORATE NOTES AND BONDSREPURCHASE AGREEMENTSMONEY-MARKET MUTUAL FUNDSNOTE
APPENDIX 12F: DEFINITIONS OF EQUITY INSTRUMENTS
APPENDIX 12G: GLOSSARY
CHAPTER 13: INFORMATION TECHNOLOGY AND KNOWLEDGE MANAGEMENT
13.1 INTRODUCTION13.2 HOW MUCH TECHNOLOGY AND WHICH TO CHOOSE?13.3 KNOWLEDGE MANAGEMENT AND INFORMATION TECHNOLOGY13.4 INFORMATION TECHNOLOGY IN TODAY'S NONPROFITS13.5 WHAT SHOULD I KNOW/DO BEFORE INVESTING IN TECHNOLOGY TOOLS?13.6 SOFTWARE: DESIGN INTERNALLY OR PURCHASE?13.7 DISCLOSURE, THE LAW, AND SECURITY13.8 NEEDS ASSESSMENT AND ANALYSIS13.9 POLICIES AND PRACTICES IN KNOWLEDGE MANAGEMENT AND INFORMATION TECHNOLOGYNOTES
APPENDIX 13A: GLOSSARY OF BASIC TECHNICAL TERMS
APPENDIX 13B: FRAMEWORK FOR AN IMPLEMENTATION STRATEGY
APPENDIX 13C: CASE STUDY: USING TECHNOLOGY TO IMPROVE CASH AND TREASURY MANAGEMENT
THE SAN DIEGO ZOO'S CFO BROUGHT THE RIGORS OF CASH FLOW FORECASTINGTHE CULTURAL REVOLUTIONALMOST IN REACHNOTE
CHAPTER 14: MANAGING RISK, LEGAL ISSUES, AND HUMAN RESOURCES
14.1 WHAT IS RISK MANAGEMENT?14.2 IDENTIFYING RISK14.3 PRIMARY FINANCIAL RISK: ILLIQUIDITY14.4 LEGAL ENVIRONMENT14.5 SAFEGUARDING PEOPLE14.6 DIRECTORS' AND OFFICERS' LIABILITY14.7 SAFEGUARDING YOUR FINANCIAL AND PHYSICAL ASSETS14.8 RISK MANAGEMENT AND HUMAN RESOURCE MANAGEMENT PRACTICESNOTES
APPENDIX 14A: DERIVATIVES CHECKLIST
WHY DERIVATIVES?FORWARDS VERSUS FUTURESGUIDELINES FOR DERIVATIVES USE: A CHECKLISTNOTES
APPENDIX 14B: CASE STUDY OF ASSOCIATION'S FOREIGN EXCHANGE RISK MANAGEMENT
CHAPTER 15: EVALUATING YOUR POLICIES AND PROGRESS
15.1 INTRODUCTION15.2 EVALUATION15.3 EVALUATING YOUR DECISIONS AND ETHICS15.4 EVALUATING YOUR COMMUNICATIONS15.5 EVALUATING YOUR MENTORING AND SUPERVISORY SKILLS15.6 TESTING YOUR SUPERVISORY AND MANAGERIAL SKILLS15.7 EVALUATING THE STRATEGIC NATURE OF YOUR ROLE15.8 EVALUATING THE FINANCIAL HEALTH OF YOUR ORGANIZATION15.9 EVALUATING YOUR FINANCIAL POLICIES IN SIX KEY AREAS15.10 EVALUATING QUALITY AND OUTCOMES15.11 USING EXTERNAL CONSULTANTS AND DATA SOURCES15.12 CONCLUSIONNOTES
INDEX
END USER LICENSE AGREEMENT

Content preview from Financial Management for Nonprofit Organizations, 3rd Edition

CHAPTER 2LIQUIDITY MANAGEMENT

2.1 INTRODUCTION
1. (a) Importance of Liquidity
2. (b) Are Nonprofits Overly Risk-Averse?
2.2 NONCOMMERCIAL NONPROFIT ORGANIZATIONS
2.3 EVIDENCE ON LIQUIDITY MANAGEMENT IN THE NONPROFIT SECTOR
2.4 FACETS OF LIQUIDITY MANAGEMENT
2.5 IMPORTANCE OF LIQUIDITY MANAGEMENT
2.6 WHAT IS THE APPROPRIATE LEVEL OF LIQUIDITY?
1. (a) Establishing the Liquidity Position Based on Financial Vulnerability
2. (b) Diagnostic Tools to Assist in Setting the Appropriate Liquidity Target
2.7 CONCLUSION

2.1 INTRODUCTION

We need to set the financial context for nonprofit financial management and for the special importance of liquidity management in the nonprofit sector. In this chapter we make the case for liquidity – ability to pay bills, meet emergency shortfalls, fund growth, and maintain flexibility – as critical to your organization's financial health and financial sustainability. We lay out the ...

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Financial Management for Nonprofit Organizations, 3rd Edition

by John Zietlow, Jo Ann Hankin, Alan Seidner, Tim O'Brien

CHAPTER 2LIQUIDITY MANAGEMENT

2.1 INTRODUCTION

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