Finance Fundamentals for Nonprofits, with Website Building Capacity and Sustainability

by Bowman, Woods

• ISBN13: 9781118004517
• ISBN10: 1118004515
• Edition: 1st
• Format: Hardcover
• Copyright: 2011-08-09
• Publisher: Wiley

Summary

A complete guide to the financial requirements a nonprofit organization must follow to indefinitely maintain the volume and quality of their services An organization may have plenty of capacity in the long run, but in the short run, donor restrictions and limited financing options are constraining. Here-and-now liquid assets are the only resources available. Finance Fundamentals for Nonprofits: Building Capacity and Sustainability shows how to measure a nonprofit organizations financial capacity in different time frames and how to measure its ability to sustain capacity in each case. Explains how nonprofits differ from businesses and how they promote values-centered management Reveals how to improve financial capacity and sustainability Written by a nonprofit scholar Filled with real-world case studies and actionable advice relating financial health to financial capacity and sustainability, this book is essential reading for every nonprofit professional.

Author Biography

WOODS BOWMAN, PhD, is a Professor of Public Service at DePaul University who brings to the classroom a range of experience in public finance and a passion for ethical governance. He is the former CFO of Cook County, a former member of the House of Representatives, Illinois General Assembly, from 1977–1990, and former chair of the Appropriations II Committee. He is a board member of the Association for Research on Nonprofit Organizations and Voluntary Action. He received the Chairman's Award from Goodwill Industries International for his service to a local affiliate. His articles have appeared in Nonprofit Management and Leadership and Nonprofit and Voluntary Sector Quarterly. In addition, Dr. Bowman writes a column on ethics for the Nonprofit Quarterly.

Table of Contents

Preface	p. ix
Acknowledgments	p. xi
Introduction: How Nonprofits Are (and Are Not) Like Businesses	p. 1
What Are Nonprofits?	p. 2
Why Are There Nonprofits?	p. 4
Nonprofits as Businesses	p. 5
Advantages and Disadvantages of Being Nonprofit	p. 8
This Book's Agenda	p. 11
Concluding Thoughts	p. 14
Accounting: Measuring Past Performance	p. 15
Basis of Accounting and Audits	p. 16
Statement of Financial Position	p. 17
Statement of Activities	p. 20
Other Statements and Notes	p. 26
What to Look For	p. 27
Irs Form 990	p. 30
Concluding Thoughts	p. 31
Investing: Looking to the Future	p. 33
Investing	p. 33
Endowment	p. 39
Values-Centered Investing	p. 42
Concluding Thoughts	p. 46
Appendix	p. 47
Budgeting: Taking Control of the Present	p. 49
Budgeting Practices	p. 49
Budget Structure	p. 53
Reconciling Budgets and Financial Statements	p. 55
Reconciling Budgets and IRS Form 990	p. 63
Concluding Thoughts	p. 64
Nonprofits in History and Tax Law: Why Nonprofits Do What They Do	p. 65
Classification	p. 66
Unrelated Business Income Tax	p. 75
Intermediate Sanctions	p. 76
Lobbying and Political Action	p. 78
State Law	p. 79
Concluding Thoughts	p. 80
Ordinary Service Providers: Serving the Public Today	p. 81
Long-Term Objective: Maintaining Services	p. 82
Short-Term Objective: Resilience	p. 85
Current Objective: Paying Bills	p. 89
Application	p. 90
Benchmarking	p. 91
Concluding Thoughts	p. 94
Appendix	p. 94
Membership Associations: Serving People with a Common Purpose	p. 97
Membership Associations	p. 98
Cooperatives	p. 101
Capacity and Sustainability	p. 103
Two Applications	p. 104
Concluding Thoughts	p. 105
Appendix: ASAE/CAL Metrics of Financial Capacity for Membership Associations	p. 106
Endowed Service Providers: Serving the Next Generation, Too	p. 107
Introduction	p. 108
Long-Term Objective: Maintaining Services	p. 111
Short-Term Objective: Resilience	p. 113
Current Objective: Paying Bills	p. 115
Application: Famous University	p. 116
Building an Endowment	p. 117
Concluding Thoughts	p. 119
Grantmaking Organizations; Serving Service Providers	p. 121
Foundation Types	p. 122
Financing Models	p. 123
Capacity and Sustainability	p. 126
Illustrations	p. 131
Concluding Thoughts	p. 131
Appendix: S&P Metrics of Financial Capacity for Grantmakers	p. 133
	p. Beyond Susta
Revenue Sources	p. 135
Theories of Revenue Compensation	p. 139
Application	p. 144
Unfair Competition	p. 145
Concluding Thoughts	p. 146
The Nonprofit Difference: Doing Good Well	p. 149
Control Environment	p. 150
Being Businesslike	p. 153
Concluding Thoughts	p. 158
Notes	p. 159
Glossary	p. 173
References	p. 187
About the Web Site	p. 201
About the Author	p. 203
Index	p. 205
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