Financial Management for Nonprofit Organizations, 3rd Edition

CHAPTER 9LONG-RANGE FINANCIAL PLANNING AND CAPITAL BUDGETING

1. 9.1 INTRODUCTION
2. 9.2 PLANNING FOR THE FUTURE
   1. (a) Importance of Long-Range Financial Planning
   2. (b) CFO’s Role in Financial Planning and Capital Budgeting
   3. (c) Deferred Maintenance: A Cautionary Tale
   4. (d) Long-Range Financial Planning Process
   5. (e) Financial Planning Basics
   6. (f) Develop a Financial Model
   7. (g) Project and Reevaluate Target Liquidity
   8. (h) Based on Our Financial Policies and Structure, How Fast Can We Grow?
3. 9.3 FINANCIAL EVALUATION OF NEW AND EXISTING PROGRAMS
   1. (a) Simple Portfolio Analysis
   2. (b) Advanced Portfolio Analysis
   3. (c) Annual Necessary Investment
4. 9.4 CAPITAL BUDGETING: FINANCIAL EVALUATION OF PROJECTS THAT ARISE FROM EXISTING PROGRAMS
   1. (a) Example 1: Net Present Value and Benefit-Cost Ratio Illustrated
   2. (b) Example 2: Equivalent Annual Cost Illustrated
   3. (c) How to Manage the Total Capital Budget
   4. (d) Capital Budget and Capital Rationing
   5. (e) Rationing the Capital
5. 9.5 FINANCIAL EVALUATION OF MERGERS, JOINT VENTURES, AND STRATEGIC ALLIANCES
   1. (a) Mergers and Acquisitions
   2. (b) Motives for Mergers and Acquisitions
   3. (c) Partnerships, Joint Ventures, and Strategic Alliances
   4. (d) Strategic Alliances
6. 9.6 FINANCIAL PLANNING AND CAPITAL BUDGETING IN PRACTICE
7. 9.7 CONCLUSION
8. APPENDIX 9A: CASE STUDY: KIAWAH ISLAND COMMUNITY ASSOCIATION
9. APPENDIX 9B: EVALUATING SOCIAL ENTERPRISES

9.1 INTRODUCTION

If we consider that nonprofit boards carry a primary responsibility for the fiscal life of the organizations that they govern, ...